TAX ALLOCATION AND INDEMNITY AGREEMENT
THIS TAX ALLOCATION AND INDEMNITY AGREEMENT (this "AGREEMENT"), is
made and entered into as of December 31, 1998, by and between HILTON HOTELS
CORPORATION, a Delaware corporation ("HILTON"), and PARK PLACE ENTERTAINMENT
CORPORATION (f/n/a Gaming Co., Inc.), a Delaware corporation and wholly owned
subsidiary of Hilton ("PARK PLACE").
WHEREAS, Hilton, Park Place and Hilton's other subsidiaries have
joined in filing consolidated federal Income Tax Returns and certain
consolidated, combined, unitary or similar state, foreign and local Tax Returns;
WHEREAS, pursuant to a Distribution Agreement dated as of December 31,
1998 by and among Hilton and Park Place (the "Distribution Agreement"), Hilton
will distribute to the holders of its common stock all of the shares of common
stock of Park Place (the "Distribution");
WHEREAS, pursuant to the Distribution Agreement, Park Place will leave
the Hilton Group (as defined herein); and
WHEREAS, the parties hereto wish to provide for (i) the allocation of,
and indemnification against, certain liabilities for Taxes, (ii) the preparation
and filing of Tax Returns and the payment of Taxes with respect thereto and
(iii) certain related matters.
NOW THEREFORE, in consideration of the foregoing and the respective
covenants and agreements set forth below, the parties agree as follows:
ARTICLE I.
DEFINITIONS
When used herein the following terms shall have the following
meanings:
AFFILIATE: with respect to any corporation (the "given corporation"),
each entity that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, the given
corporation. For purposes of this definition, "control" means the possession,
directly or indirectly, of 50% or more of the voting power or value of
outstanding equity interests.
AFFILIATED GROUP: an affiliated group of corporations within the
meaning of Code Section 1504(a) (and without regard to the exclusions contained
in Code Section 1504(b)) for the
Taxable Period or, for purposes of any state, foreign or local Tax matters that
are filed on a consolidated, combined, unitary or similar basis, any
consolidated, combined, unitary or similar group of corporations within the
meaning of the corresponding provisions of tax law for the jurisdiction in
question.
AFTER-TAX BASIS: any indemnity payment made hereunder shall give
effect to, and be adjusted by the value of, any and all Tax Benefit(s) for
federal, state or other Income Tax purposes attributable to the payment of the
indemnified liability, which value shall be determined on an assumed basis by
(a) multiplying the amount of any applicable deductions, losses, offsets or
other Tax items (such amount determined as if such deductions, losses, offsets
or other Tax items will generate an immediate deduction for the full amount
ultimately available) by (i) 39% or (ii) if no state Tax Benefit shall result
therefrom (determined on a hypothetical basis by using the highest marginal
corporate Tax rate), 35% (such percentages to increase or decrease on a
percentage-for-percentage basis with any subsequent increases or decreases in
the current 35% maximum marginal federal Income Tax rate for corporations, and
100% minus the maximum marginal federal Income Tax rate for corporations (E.G.,
65%) of any increases or decreases in the maximum marginal state or local Income
Tax rate for corporations) and (b) valuing any credits or other direct
reductions of Tax on a dollar-for-dollar basis. For example, if a deductible
payment of $100 is indemnified hereunder, the indemnification payment with
respect thereto (applying the characterization set forth in Section 4.2) shall
be reduced by $39 to $61.
AUDIT: any audit, assessment of Taxes, other examination by any
Taxing Authority, proceeding or appeal of such a proceeding relating to Taxes,
whether judicial or administrative.
CARRYFORWARDS: as defined in Section 2.12 of this Agreement.
CLOSING DATE: the date on which the Distribution is effected by
Hilton.
CODE: the Internal Revenue Code of 1986, as amended, or any successor
thereto, as in effect for the Taxable Year in question.
COMBINED JURISDICTION: for any Taxable Period, any state, foreign or
local jurisdiction in which Hilton and a Hilton Affiliate (or two or more Hilton
Affiliates) for that period join in the filing of a consolidated, combined,
unitary or similar return for state, foreign or local Tax purposes.
CORPORATE SERVICES AGREEMENT: the Hilton Hotels Corporation Corporate
Services Agreement entered into by and between Hilton and Park Place dated as of
December 31, 1998 which provides, among other things, that Hilton shall, during
the transition period specified therein, prepare or cause to be prepared, on
Park Place's behalf, certain Tax and Information Returns of Park Place and Park
Place Members.
DISPUTE RESOLUTION PROCEDURE: a procedure whereby (i) Hilton shall
select a representative of a nationally recognized accounting firm; (ii) Park
Place shall select a representative of a second nationally recognized accounting
firm; (iii) the two representatives so
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selected shall together select a representative of a third nationally recognized
accounting firm, provided however, that the representative so selected shall not
be from any of the following firms: (a) Arthur Andersen, LLP, (b) Ernst & Young,
LLP, or (c) any other firm which shall have received more than $500,000 in fees
from Hilton, Park Place, or any successor or predecessor entity in any of the
preceding five years; and (iv) the three representatives together (or, if they
are unable to agree, a majority of them) shall, within a reasonable period of
time, decide the issue(s) submitted to them. Hilton and Park Place shall each
be responsible for the fees of their respective representative, and the fees of
the third representative shall be shared equally by Hilton and Park Place. Any
decision rendered pursuant to a Dispute Resolution Procedure shall be final and
binding on all Post-Distribution Members and Park Place Members.
DISTRIBUTION: as defined in the Preamble.
EFFECTIVE TIME: the time at which the Distribution becomes effective.
FINAL DETERMINATION: (i) a decision, judgment, decree, or other order
by a court of competent jurisdiction, which has become final and unappealable;
(ii) a closing agreement or accepted offer in compromise under Code Sections
7121 or 7122, or comparable agreements under the laws of other jurisdictions;
(iii) any other final settlement with the IRS or other Taxing Authority
(including the execution of IRS Form 870AD, or a comparable form under the laws
of other jurisdictions, but excluding any such form that reserves (whether by
its terms or by operation of law) the right of the taxpayer to file a claim for
refund and/or the right of the Taxing Authority to assert a further deficiency);
(iv) the expiration of an applicable statute of limitations; or (v) the
allowance of a refund or credit, but only after the expiration of all periods
during which such refund or credit may be recovered (including by way of
offset).
FINAL HILTON GROUP COMBINED TAX RETURN: as defined in Section 2.7(c)
of this Agreement.
HILTON: as defined in the preamble to this Agreement.
HILTON GROUP: Hilton and each corporation that is a member of an
Affiliated Group with respect to which Hilton is the common parent.
INCOME TAX(ES): with respect to any corporation or Affiliated Group,
any and all Taxes based upon or measured by net income (regardless of whether
denominated as an "income tax," a "franchise tax" or otherwise).
INCOME TAX RETURN: a Tax Return relating to the payment or receipt of
any refund of any Income Tax.
INFORMATION RETURN(S): with respect to any corporation or Affiliated
Group, any and all returns, reports, estimates, statements, declarations and
other filings (other than Tax Returns) required to be filed or supplied to any
Taxing Authority.
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IRS: the Internal Revenue Service or any successor thereto, including
but not limited to its Representatives.
IRS RULING: The letter ruling issued by the IRS in response to the
Ruling Request.
MERGER AGREEMENT: That certain Agreement and Plan of Merger, dated as
of June 30, 1998 by and among Hilton; Park Place; Gaming Acquisition
Corporation, a Minnesota corporation; Grand Casinos, Inc., a Minnesota
corporation; and Lakes Gaming, Inc., a Minnesota corporation.
OVERDUE RATE: a variable rate of interest per annum equal to the
Federal short-term rate as established from time to time pursuant to Code
Section 1274(d).
PARK PLACE: as defined in the preamble to this Agreement.
PARK PLACE GROUP: Park Place and each corporation that was a
Pre-Distribution Member and which would be a member of an Affiliated Group with
respect to which Park Place would be the common parent during any Post-Closing
Taxable Period. For purposes of this Agreement, the Park Place Group shall
exist from and after the day after the close of business on the Closing Date.
To the extent applicable to any state, foreign or local Tax matters that are
filed on a consolidated, combined, unitary or similar basis, the "Park Place
Group" shall consist of all corporations joining with Park Place in the filing
of a consolidated, combined, unitary or similar Tax Return for the jurisdiction
in question.
PARK PLACE MEMBER: a corporation that would be a member of the Park
Place Group.
POST-CLOSING STRADDLE PERIOD: with respect to any Straddle Period, the
portion beginning after the close of business on the Closing Date and ending on
the last day of such Taxable Year.
POST-CLOSING TAXABLE PERIOD: a Taxable Year that begins after the
close of business on the Closing Date.
POST-DISTRIBUTION HILTON GROUP: Hilton and each corporation that was a
Pre-Distribution Member and which would be a member of an Affiliated Group with
respect to which Hilton would be the common parent during any Post-Closing
Taxable Period. For purposes of this Agreement, the Post-Distribution Hilton
Group shall exist from and after the close of business on the Closing Date. To
the extent applicable to any state, foreign or local Tax matters that are filed
on a consolidated, combined, unitary or similar basis, the "Post-Distribution
Hilton Group" shall consist of all corporations joining with Hilton in the
filing of a consolidated, combined, unitary or similar Tax Return for the
jurisdiction in question.
POST-DISTRIBUTION MEMBER: a corporation that was a Pre-Distribution
Member and is a member of the Post-Distribution Hilton Group after the close of
business on the Closing Date.
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PRE-CLOSING STRADDLE PERIOD: with respect to any Straddle Period, the
portion beginning on the first day of such Taxable Year and ending on the close
of business on the Closing Date.
PRE-CLOSING TAXABLE PERIOD: a Taxable Year that ends on or before the
Closing Date.
PRE-DISTRIBUTION HILTON GROUP: Hilton and each corporation that would
be a member of an Affiliated Group with respect to which Hilton would be the
common parent during any Pre-Closing Taxable Period. For purposes of this
Agreement, the Pre-Distribution Hilton Group shall terminate at the close of
business on the Closing Date. To the extent applicable to any state, foreign or
local Tax matters that are filed on a consolidated, combined, unitary or similar
basis, the "Pre-Distribution Hilton Group" shall consist of all corporations
joining with Hilton in the filing of a consolidated, combined, unitary or
similar Tax Return for the jurisdiction in question.
PRE-DISTRIBUTION MEMBER: a corporation that was a member of the
Pre-Distribution Hilton Group at the close of business on the Closing Date.
REPRESENTATIVE(S): with respect to any person or entity, any of such
person's or entity's directors, officers, employees, agents, consultants,
accountants, attorneys and other advisors.
RULING REQUEST: The private letter ruling request filed by Hilton
with the IRS, as supplemented and amended from time to time, with respect to
certain federal Income Tax matters relating to the Distribution and other
related matters.
STRADDLE PERIOD: any Taxable Year beginning before and ending after
the close of business on the Closing Date.
TAX BENEFIT(S): (i) in the case of a Tax for which a consolidated
federal, or a consolidated, combined, unitary or similar state, foreign or local
Tax Return is filed, the amount by which the Tax liability of the Affiliated
Group is reduced (by deduction, entitlement to refund, credit, offset or
otherwise, whether available in the current Taxable Year, as an adjustment to
taxable income in any other Taxable Year or as a carryforward or carryback, and
including the effect on other Taxes of such reduction), plus any interest
received with respect to any related Tax refund, and (ii) in the case of any
other Tax, the amount by which the Tax liability of a corporation is reduced (by
deduction, entitlement to refund, credit, offset or otherwise, whether available
in the current Taxable Year, as an adjustment to taxable income in any other
Taxable Year or as a carryforward or carryback, and including the effect on
other Taxes of such reduction), plus any interest received with respect to any
related Tax refund, determined in the case of both (i) and (ii) on a basis
consistent with the computation of After-Tax Basis.
TAX PRACTICES: the most recently applied policies, procedures and
practices employed by the Hilton Group in the preparation and filing of, and
positions taken on, any Tax
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Returns of Hilton or any Pre-Distribution Member or Hilton Affiliate for any
Pre-Closing Taxable Period.
TAX RETURN(S): with respect to any corporation or Affiliated Group,
all returns, reports, estimates, statements, declarations and other filings
relating to, or required to be filed by any taxpayer in connection with, the
payment or receipt of any refund of any Tax.
TAX TREATMENT: as defined in Section 3.3 hereto.
TAXABLE PERIOD: a Pre-Closing Taxable Period, a Post-Closing Taxable
Period or a Straddle Period.
TAXABLE YEAR: a taxable year (which may be shorter than a full
calendar or fiscal year) or similar period with respect to which any Tax may be
imposed.
TAX(ES): any federal, state, foreign or local income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental, customs duties, capital stock, franchise,
profits, withholding, social security, unemployment, disability, real property,
personal property, sales, use, transfer, registration, value added, alternative
or add-on minimum, estimated, or other tax of any kind whatsoever, including any
interest, penalty or addition thereto; EXCLUDING, HOWEVER, any "Transaction
Taxes" as defined in Section 6.05 of the Distribution Agreement.
TAXING AUTHORITY: the IRS or any other domestic or foreign
governmental authority responsible for the administration of any Tax.
ARTICLE II.
FILING OF TAX RETURNS AND PAYMENT OF TAXES
Section 2.1. PREPARATION AND FILING OF TAX RETURNS.
(a) BY HILTON. Hilton shall prepare and timely file (or cause to be
prepared and timely filed):
(i) all Tax and Information Returns of the Hilton
Group or any Pre-Distribution Member or group of
Pre-Distribution Members for all Pre-Closing Taxable Periods
that are required to be filed on or before the Closing Date;
(ii) all Tax and Information Returns of the Hilton
Group or any Pre-Distribution Member or group of
Pre-Distribution Members for all Pre-Closing Taxable Periods
(other than such Returns that relate solely to any Park
Place Member or group of Park Place Members) that are not
required to be filed on or before the Closing Date; and
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(iii) all Tax and Information Returns of the Hilton
Group or any Post-Distribution Member or group of
Post-Distribution Members for all Straddle Periods and
Post-Closing Taxable Periods.
(b) BY PARK PLACE. Park Place shall prepare and timely file (or
cause to be prepared and timely filed):
(i) all Tax and Information Returns that relate
solely to any Park Place Member or group of Park Place
Members for all Pre-Closing Taxable Periods that are not
required to be filed on or before the Closing Date; and
(ii) all Tax and Information Returns of the Park
Place Group or any Park Place Member or group of Park Place
Members for all Straddle Periods and Post-Closing Taxable
Periods.
Pursuant to the Corporate Services Agreement, during a transition period
specified therein, certain Tax and Information Returns described in
Section 2.1(b) will be prepared (or caused to be prepared) by Hilton on Park
Place's behalf.
Section 2.2. PROVISION OF FILING INFORMATION. Park Place (or
Hilton, as the case may be) shall cooperate and assist Hilton (or Park Place) in
the preparation and filing of all Tax and Information Returns subject to
Section 2.1 and any tax planning related thereto, and shall submit to Hilton (or
Park Place) (i) all necessary filing information in a manner consistent with
past Tax Practices and (ii) all other information reasonably requested by Hilton
(or Park Place) in connection with the preparation of such Tax Returns and any
such tax planning promptly after such request, including permission to copy any
applicable documents. It is expressly understood and agreed that Hilton's (or
Park Place's) ability to discharge its Tax and Information Return preparation
and filing responsibilities is contingent upon Park Place (or Hilton) providing
Hilton (or Park Place) with all cooperation, assistance and information
reasonably necessary or requested for the filing of such Tax and Information
Returns and that Park Place (or Hilton) shall indemnify Hilton (or Park Place),
if, and to the extent that, Taxes are increased as a result of material
inaccuracies in such information or failures to provide such information and
assistance on a timely basis.
Section 2.3. TAXABLE YEAR. Park Place and Hilton agree that, to the
extent permitted by applicable law, (i) the Taxable Year of the Park Place
Members included in the consolidated federal Income Tax Return of the Hilton
Group for the Taxable Period that includes the Closing Date (and all
corresponding consolidated, combined, unitary or similar state, foreign or local
Income Tax Returns of the Hilton Group) shall end at the close of business on
the Closing Date, and (ii) the Park Place Group and each Park Place Member shall
begin a new Taxable Year for purposes of such federal, state, foreign or local
Income Taxes on the day after the Closing Date. The parties further agree that,
to the extent permitted by applicable law, all federal, state, foreign or local
Tax and Information Returns shall be filed consistently with this position.
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Section 2.4. ADVANCE REVIEW OF TAX RETURNS. At least thirty (30)
days prior to the filing of any federal Income Tax Return (including amendments
thereto) that includes a Park Place Member, and at least fifteen (15) days prior
to the filing of any other Tax Return (including amendments thereto) that
includes a Park Place Member, Hilton shall provide Park Place with the portion
of such Tax Return related to the Park Place Member. In the case of each Tax
Return (including amendments thereto) subject to the conformity requirements of
Section 2.5 and filed pursuant to Section 2.1(b), Park Place shall provide
Hilton with copies of any such Tax Return at least thirty (30) days prior to the
filing thereof. Park Place and its Representatives (or Hilton and its
Representatives, as the case may be) shall have the right to review all related
work papers prior to the filing of any such Tax Return. Hilton (or Park Place,
as the case may be) shall consult with Park Place (or Hilton) regarding its
comments with respect to such Tax Returns and shall in good faith (A) consult
with Park Place (or Hilton) in an effort to resolve any differences with respect
to the preparation and accuracy of such Tax Returns and their consistency with
past Tax Practices and (B) consider Park Place's (or Hilton's) recommendations
for alternative positions with respect to items reflected on such Tax Returns;
PROVIDED, HOWEVER, that Hilton (or Park Place) shall not be required to consider
any such recommendation if the result thereof would adversely affect the Taxes
of the Hilton Group or any Post-Distribution Member (or the Park Place Group or
any Park Place Member) for any Straddle Period or Post-Closing Taxable Period,
and Hilton (or Park Place) may condition the acceptance of any such
recommendation upon the receipt of appropriate indemnification from Park Place
(or Hilton) for any increases in Taxes that may result from the adoption of the
relevant alternative position.
Section 2.5. CONSISTENT POSITIONS ON TAX RETURNS. Hilton (or Park
Place, as the case may be) shall (i) prepare all Tax Returns filed pursuant to
this Agreement for all Taxable Years ended on or before December 31, 1999 in a
manner consistent with past Tax Practices, and (ii) prepare all Tax Returns
filed pursuant to this Agreement in a manner consistent with the IRS Ruling and
the Ruling Request, except in either (i) or (ii) as otherwise required by
changes in applicable law or material underlying facts or as the parties hereto
shall otherwise consent in writing, which consent shall not be unreasonably
withheld.
Section 2.6. STRADDLE PERIOD TAXES. For purposes of this Agreement,
Taxes attributable to Straddle Periods shall be allocated between the Pre- and
Post-Closing Straddle Periods, in Hilton's reasonable judgment with the consent
of Park Place, in the following manner:
(a) To the extent not impractical, on the basis of the actual
operations and taxable income for each such period, determined by closing the
books of the entity at the close of business on the Closing Date; or
(b) To the extent that an allocation based on a closing of the books
is impractical, on the basis of allocations of taxable income, loss, gain,
deduction and credits made for the entity for federal Income Tax purposes.
Section 2.7. PAYMENT OF TAXES
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(a) Hilton shall pay (i) (A) all Taxes shown to be due and payable on
all Tax Returns as filed pursuant to Sections 2.1(a) and 2.1(b)(i) hereof and
(B) all Taxes shown to be due and payable on all Tax Returns as filed pursuant
to Section 2.1(b)(ii) for Straddle Periods, to the extent allocable to
Pre-Closing Straddle Periods, and (ii) subject to Article III below, all
additional Taxes that shall thereafter become due and payable as a result of a
Final Determination with respect to all Tax Returns filed by Hilton pursuant to
Section 2.1(a) hereof; PROVIDED, HOWEVER, that Park Place shall reimburse Hilton
for the amount of any such additional Taxes required to be paid as a result of
the operation of the foregoing Subsection 2.7(a)(ii) within 15 days of receipt
of notification from Hilton, if and to the extent that such Tax Returns include
one or more Park Place Members and such additional Taxes are allocable to one or
more Park Place Members as set forth in Section 2.8 herein.
(b) Park Place shall pay (i) all Taxes shown to be due and payable on
all Tax Returns filed by Park Place pursuant to Section 2.1(b)(ii), (A) for
Straddle Periods, to the extent allocable to Post-Closing Straddle Periods, and
(B) for Post-Closing Taxable Periods and (ii) subject to Article III, all
additional Taxes that shall thereafter become due and payable as a result of a
Final Determination with respect to all Tax Returns filed by Park Place pursuant
to Section 2.1(b) hereof.
(c) With respect to the 1998 Hilton Group consolidated federal Income
Tax Return and any Hilton Group Income Tax Return for any Combined Jurisdiction
for the Taxable Period that includes the Closing Date (together, a "Final Hilton
Group Combined Tax Return"), within 15 days of receipt of notice from Hilton,
Park Place shall reimburse Hilton in an amount equal to fifty percent (50%) of
(i) any additional payment of Income Taxes required to be made by Hilton with
any request for extension of any Final Hilton Group Combined Tax Return and
(ii) any additional payment of Income Taxes required to be made by Hilton with
the filing of any Final Hilton Group Combined Tax Return. To the extent that
the amount of Income Taxes previously paid by Hilton with respect to the Taxable
Year reported on any Final Hilton Group Combined Tax Return exceeds the Income
Tax liability shown on such Income Tax Return, Hilton shall reimburse Park
Place, within 15 days of the filing of such Tax Return an amount equal to fifty
percent (50%) of such excess.
(d) With respect to all Tax Returns described in Section 2.7(a)(i)
above that relate solely to any Park Place Member or group of Park Place
Members, within 15 days of receipt of notice from Hilton, Park Place shall
reimburse Hilton in an amount equal to one hundred percent (100%) of (i) any
additional payment of Taxes required to be made by Hilton with any request for
extension of the due date of such Tax Returns and (ii) any additional payment of
Taxes required to be made by Hilton with the filing of such Tax Returns. To the
extent that the amount of Taxes previously paid by Hilton with respect to the
Taxable Year reported on any Tax Return described in Section 2.7(a)(i) above
which relates solely to any Park Place Member or group of Park Place Members
exceeds the Tax liability shown on such Tax Return, Hilton shall reimburse Park
Place, within 15 days of the filing of such Tax Return, in an amount equal to
one hundred percent (100%) of such excess.
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Section 2.8. ALLOCATION OF ADDITIONAL TAXES.
(a) For purposes of determining the reimbursement obligations of Park
Place pursuant to Section 2.7(a) with respect to additional Taxes required to be
paid by Hilton pursuant to Section 2.7(a)(ii), such additional Taxes shall be
allocated in the following manner:
(i) Any additional Taxes that relate to Tax Returns
consisting solely of one or more Park Place Members shall be
allocated in full to such Park Place Members.
(ii) Any additional Taxes that relate to Tax Returns
consisting solely of Pre-Distribution Members, none of which
are Park Place Members, shall be allocated in full to such
Pre-Distribution Members.
(iii) With respect to additional Taxes that relate to
Tax Returns that are filed on a consolidated, combined,
unitary or similar basis and that include at least one Park
Place Member but do not consist solely of Park Place
Members, such additional Taxes shall be allocated to the
Park Place Members to the extent that such additional Taxes
result in an increase in the separate return tax liabilities
of the Park Place Members as computed under Treasury
Regulation Section 1.1552-1(a)(2)(ii) in the case of a
consolidated federal Income Tax Return. In the case of
federal Taxes other than the regular Income Tax, similar
principles will apply with the application determined
separately for each separate type of Tax. Similarly, in the
case of consolidated, combined, unitary or similar state,
foreign or local Tax Returns, similar principles will apply
with the application determined separately for each separate
type of such Tax.
(b) Notwithstanding any other provision of this Agreement, for
purposes of this Section 2.8, the parties hereto intend that the following
entities shall be treated as if they were Park Place Members, but only with
respect to Pre-Closing Taxable Periods and Pre-Closing Straddle Periods:
Bally's Grand Inc., a Nevada corporation; Bally's Grand Property Sub I, Inc., a
Nevada corporation; Bally's Casino Management, Inc., a Delaware corporation;
Hilton Gaming Corporation, a Nevada corporation; Paris Casino Corp., a Nevada
corporation; Conrad International Hotels Corporation, a Nevada corporation;
Conrad International Investment Corporation, a Nevada corporation; Conrad
International Royalty Corporation, a Nevada corporation.
(c) With respect to any of the entities described in the preceding
Section 2.8(b), (i) Hilton shall not take any actions subsequent to the Closing
which could reasonably be expected to have a material and adverse effect on any
indemnification obligation of Park Place hereunder, and (ii) Hilton shall, for
all Pre-Closing Taxable Periods and Pre-Closing Straddle Periods, under the
principles set forth in Section 2.4 above, in good faith afford Park Place a
reasonable
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opportunity to review in advance any Tax Returns pertaining to such entities,
and such Tax Returns shall not be filed without the written consent of Park
Place, which consent shall not be unreasonably withheld.
Section 2.9. AMENDMENTS TO TAX AND INFORMATION RETURNS. Hilton (or
Park Place, as the case may be) shall be entitled to amend Tax and Information
Returns filed by Hilton (or Park Place) pursuant to Section 2.1; PROVIDED,
HOWEVER, that Park Place (or Hilton) shall not amend for any reason whatsoever
any Tax or Information Return of Hilton, the Hilton Group, any Pre-Distribution
Member or group thereof or any Post-Distribution Member or group thereof (or of
Park Place, the Park Place Group or any Park Place Member or group thereof) for
any Taxable Period ending on or before December 31, 1999, except (A) pursuant to
the settlement or other resolution of an Audit subject to Article VI or (B) with
Hilton's (or Park Place's) written consent (which consent shall not be
unreasonably withheld, PROVIDED, HOWEVER, that such consent may be conditioned
upon the receipt of appropriate indemnification for any increases in Taxes that
may result from the amendment; PROVIDED, HOWEVER, that such prohibition shall
not extend to the correction of mathematical or material factual errors or other
adjustments necessary to conform such Tax and Information Returns to applicable
law or to comply with Section 2.5.
Section 2.10. REFUNDS OF TAXES. Hilton shall be entitled to any
refund of Taxes for which Hilton would be ultimately liable pursuant to a Final
Determination of such Taxes under Section 2.7(a), and Park Place shall be
entitled to any refund of Taxes for which Park Place would be ultimately liable
pursuant to a Final Determination of such Taxes under Section 2.7(a) or (b), in
each case taking into account Park Place's reimbursement obligations which
obligations are described therein and allocated pursuant to Section 2.8. If
Hilton or any Post-Distribution Member (or Park Place or any Park Place Member,
as the case may be) receives a Tax refund to which Park Place or any Park Place
Member (or Hilton or any Post-Distribution Member) is entitled pursuant to this
Agreement, Hilton (or Park Place) shall pay (in accordance with Article IV) the
amount of such refund (including any interest received thereon) to Park Place
(or Hilton) promptly after receipt thereof.
Section 2.11. CARRYBACKS. Park Place shall notify Hilton promptly of
the existence of any items of deduction, loss or credit arising in a
Post-Closing Taxable Year that are required to be carried back to a Taxable
Period of the Hilton Group or any Pre-Distribution Member (other than to a
separate Tax Return of a member of the Park Place Group). Park Place hereby
expressly agrees (on its behalf and on behalf of all Park Place Members and
successors thereto) that Hilton or any Post-Distribution Member may retain any
cash refund or reduction of a Tax liability or any other Tax Benefit obtained by
Hilton or any Post-Distribution Member (other than a member of the Park Place
Group) as a result of any carryback without compensation to Park Place or any
Park Place Member. Notwithstanding Section 2.5, Park Place and Hilton agree
that Park Place shall elect to carry forward all such items that affect Park
Place or any member of the Park Place Group, or otherwise take such steps to the
extent permitted under applicable law to preserve the benefit to it of all items
generated by Park Place or any member of the Park Place Group.
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Section 2.12. NOL, ITC, AMT AND FTC CREDIT BENEFITS. If any Park
Place Members have attributable to them, under applicable federal and state
Income Tax law (including, without limitation, Code Section 1502 and the
Treasury Regulations promulgated thereunder), any net operating loss
carryforwards, investment tax credit carryforwards, alternative minimum tax
credit carryforwards or foreign tax credit carryforwards (the "CARRYFORWARDS"),
the parties hereto agree that the Park Place Group and the Park Place Members
shall be exclusively entitled to use and benefit from the Carryforwards without
compensation to the Hilton Group or any Pre-Distribution Member. Hilton hereby
agrees to take any action or make any election reasonably required to permit
Park Place and the Park Place Members to utilize the Carryforwards; PROVIDED,
HOWEVER, that no such action or election shall be required if it would adversely
affect in any way the Income Tax liabilities of the Hilton Group or any
Post-Distribution Member for any Taxable Year. The parties also hereby agree
that the provisions of this Section 2.12 shall apply with respect to any similar
carryforwards available under applicable state, foreign or local Tax law.
Section 2.13. DISPUTES. If Hilton and Park Place are unable to agree
on any calculation, numerical value, procedure or payment set forth in or
required by this Article II, such item shall be determined pursuant to the
Dispute Resolution Procedure.
ARTICLE III.
INDEMNIFICATION.
Section 3.1. BY HILTON.
(a) TAXES. Subject to Section 3.3, Hilton shall indemnify and hold
Park Place and each Park Place Member harmless (on an After-Tax Basis) against
any and all Taxes for which Hilton is ultimately liable pursuant to a Final
Determination of such Taxes under Section 2.7(a), taking into account Park
Place's reimbursement obligations described therein.
(b) MEMBER LIABILITY. Subject to Sections 3.2 and 3.3, Hilton shall
indemnify and hold Park Place and each Park Place Member harmless (on an
After-Tax Basis) against each and every liability for Taxes of the Hilton Group
asserted by any Taxing Authority under Treasury Regulation Section 1.1502-6 or
any similar law, rule or regulation.
Section 3.2. BY PARK PLACE. Subject to Section 3.3, Park Place
shall indemnify and hold the Hilton Group and each Post-Distribution Member
harmless (on an After-Tax Basis) against the Taxes for which Park Place is
ultimately liable pursuant to a Final Determination of such Taxes under Section
2.7(a) or (b), taking into account Park Place's reimbursement obligations
described therein.
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Section 3.3. ASSUMED TAX TREATMENTS
(a) The parties expressly agree for all purposes to treat the
Distribution as a tax-free distribution under Code Section 355 in accordance
with (i) the IRS Ruling and Ruling Request or (ii) an opinion of tax counsel as
described in Section 7.11 of the Merger Agreement (the "TAX TREATMENT"). Each
party hereto also expressly agrees not to take (and to cause each of its
Affiliates not to take) any action (except where such action is required by law)
that is inconsistent with the treatment of the Distribution and all related
transactions in accordance with the Tax Treatment and to take (and to cause each
of its Affiliates to take) any and all actions reasonably available to such
party (or Affiliate) to support and defend the Tax Treatment.
(b) Notwithstanding anything to the contrary in Sections 2.7, 3.1 or
3.2:
(i) If there is a Final Determination that results
in the disallowance, in whole or in part, of the Tax
Treatment, and either (A) there has been no material breach
of Section 3.3(a) and no Post-Distribution Member or Park
Place Member has taken actions after the Distribution which
result in such disallowance, or (B) if one or more
Post-Distribution Members and one or more Park Place Members
have materially breached Section 3.3(a) or taken actions
after the Distribution which result in such disallowance,
then any liability of Hilton for Taxes as a result of such
disallowance shall be divided equally between Hilton and
Park Place.
(ii) If there is a Final Determination that results
in the disallowance, in whole or in part, of the Tax
Treatment, and any Park Place Member (and no
Post-Distribution Member) has materially breached Section
3.3(a) or has taken any action after the Distribution which
results in such disallowance, then Park Place shall
indemnify and hold each Post-Distribution Member harmless
for any Taxes which would not have occurred but for such
disallowance.
(iii) If there is a Final Determination that results
in the disallowance, in whole or in part, of the Tax
Treatment, and any Post-Distribution Member (and no Park
Place Member) has materially breached Section 3.3(a) or has
taken any action after the Distribution which results in
such disallowance, then Hilton shall indemnify and hold each
Park Place Member harmless for any Taxes which would not
have occurred but for such disallowance.
Any such claim for indemnification shall otherwise be handled in the
manner specified under this Article III, but shall not affect in any manner the
provisions of Articles V and VI with respect to cooperation and control of
Audits.
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Section 3.4. CERTAIN REIMBURSEMENTS. Park Place (or Hilton, as the
case may be) shall notify Hilton (or Park Place) of any Taxes paid by the Park
Place Group or any Park Place Member (or the Hilton Group or any
Post-Distribution Member) which are subject to indemnification under this
Article III; PROVIDED, HOWEVER, that no Tax liability of $10,000 or less in the
aggregate shall in any event be indemnified hereunder. Any notification
contemplated by this Section 3.4 shall include a detailed calculation
(including, if applicable, separate allocations of such Taxes between Pre- and
Post-Closing Taxable Periods and supporting work papers) and a brief explanation
of the basis for indemnification hereunder. Whenever a notification described
in this Section 3.4 is given, the notified party shall pay the amount requested
in such notice to the notifying party in accordance with Article IV, but only to
the extent that the notified party agrees with such request. To the extent the
notified party disagrees with such request, it shall, within 15 days of receipt
of such notice, so notify the notifying party, whereupon the parties shall use
their best efforts to resolve any such disagreement. To the extent not
otherwise provided for in this Article III or in Article IV, any payment made
after such 15-day period shall include interest at the Overdue Rate from the
date of receipt of original notice of such payment.
Section 3.5. LOSS OF TAX BENEFITS. Appropriate payments shall be
made between the parties to take account of subsequent losses of, or changes in,
any Tax Benefit that has been taken into account for purposes of determining the
After-Tax Basis of any indemnification payment.
ARTICLE IV.
METHOD, TIMING AND CHARACTER OF PAYMENTS REQUIRED BY THIS
AGREEMENT.
Section 4.1. PAYMENT IN IMMEDIATELY AVAILABLE FUNDS; INTEREST. All
payments made pursuant to this Agreement shall be made in immediately available
funds. Except as otherwise provided herein, any payment not made within 15 days
of receipt of notice of such payment shall thereafter bear interest at the
Overdue Rate from the date of receipt of notice of such payment.
Section 4.2. CHARACTERIZATION OF PAYMENTS. Any payment (other than
interest thereon) made hereunder by Hilton to Park Place or by Park Place to
Hilton shall be treated by all parties for all purposes to the extent permitted
by law as a non-taxable dividend distribution or capital contribution made prior
to the close of business on the Closing Date. If, pursuant to a Final
Determination, it is determined that the receipt or accrual of any payment under
this Agreement (other than interest thereon) is, itself, subject to any Tax, the
party making such payment shall be required to pay an additional amount to cover
the additional Tax (on an After-Tax Basis), together with interest at the
Overdue Rate from the date the Tax accrues through the date of payment of the
additional amount.
ARTICLE V.
COOPERATION; DOCUMENT RETENTION; CONFIDENTIALITY.
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Section 5.1. PROVISION OF COOPERATION, DOCUMENTS AND OTHER
INFORMATION. Upon reasonable request by a requesting party, Hilton and Park
Place shall promptly provide (and shall cause their respective Affiliates to
provide) such requesting party with such cooperation and assistance, documents,
and other information, without charge, as may be necessary or reasonably helpful
in connection with (i) the preparation and filing of any original or amended Tax
or Information Return, (ii) the conduct of any Audit involving to any extent
Taxes or Tax or Information Returns within the scope of this Agreement, or (iii)
the verification by a party of an amount payable hereunder to, or receivable
hereunder from, another party. Such cooperation and assistance shall include,
without limitation: (w) the provision on demand of books, records, Tax or
Information Returns, documentation or other information relating to any relevant
Tax Return; (x) the execution of any document that may be necessary or
reasonably helpful in connection with the filing of any Tax or Information
Return by the Hilton Group, a Pre-Distribution Member, a Post-Distribution
Member, the Park Place Group or a Park Place Member, or in connection with any
Audit of the type generally referred to in the preceding sentence, including,
without limitation, the execution of powers of attorney and extensions of
applicable statutes of limitations with respect to Tax or Information Returns
which Hilton may be obligated to file on behalf of Park Place Members pursuant
to Section 2.1; (y) the prompt and timely filing of appropriate claims for
refund; and (z) the use of reasonable best efforts to obtain any documentation
from a governmental authority or a third party that may be necessary or helpful
in connection with the foregoing. Each party shall make its employees and
facilities available on a mutually convenient basis to facilitate such
cooperation.
Section 5.2. PARTICIPATION IN THE RULING REQUEST. With respect to
the ruling Request, Hilton shall (i) afford park place full opportunity to
review any submissions related to the Ruling Request and correspondence from the
IRS, and to participate in any proceedings related to the Ruling Request, (ii)
in good faith consult with Park Place regarding its comments with respect to
such submissions and proceedings in an effort to resolve any differences with
respect to Hilton's positions with regard to such issues, (iii) in good faith
consider Park Place's recommendations for alternative positions with respect to
such issues, and (iv) provide Park Place with final copies of such submissions
and correspondence. Hilton shall not make any representations in connection
with the Ruling Request that could reasonably be expected to have a material and
adverse effect on (A) any indemnification obligation of park place hereunder or
(B) any tax liability of the Park Place group or any Park Place member for any
taxable period, without the prior written consent of Park Place, which consent
shall not be unreasonably withheld. Moreover, Hilton agrees that, at the
reasonable request of Park Place, Hilton shall cooperate with Park Place and use
its reasonable best efforts to expeditiously obtain, at Park Place's expense,
supplemental rulings from the IRS confirming (x) the continuing validity of the
IRS Ruling, and (y) compliance on the part of Park Place or any Park Place
member with its obligation under Section 3.3(a) to conform to the Tax Treatment.
SECTION 5.3. RETENTION OF BOOKS AND RECORDS. Hilton, each Post
Distribution Member, Park Place and each Park Place Member shall retain or cause
to be retained all Tax and Information Returns, and all books, records,
schedules, workpapers, and other documents relating thereto, until the
expiration of the later of (i) seven (7) years from the close of the Taxable
Year, (ii)
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all applicable statutes of limitations (including any waivers or extensions
thereof) and (iii) any retention period required by law (E.G., depreciation or
inventory records) or pursuant to any record retention agreement. The parties
hereto shall notify each other in writing of any waivers, extensions or
expirations of applicable statutes of limitations. The parties hereto shall
provide at least thirty (30) days prior written notice of any intended
destruction of the documents referred to in this Section 5.2. A party giving
such a notification shall not dispose of any of the foregoing materials without
first obtaining the written approval (which may not be unreasonably withheld) of
the notified party and, in lieu of destruction or disposition, the notified
party shall be permitted to take possession, at its sole cost, of the foregoing
materials which affect (or potentially affect) its liability for Tax.
Section 5.4. CONFIDENTIALITY OF DOCUMENTS AND INFORMATION. Except
as required by law or with the prior written consent of the other party, all Tax
and Information Returns, documents, schedules, work papers and similar items and
all information contained therein which are within the scope of this Agreement
shall be kept confidential by the parties hereto and their Representatives,
shall not be disclosed to any other person or entity and shall be used only for
the purposes provided herein.
ARTICLE VI.
AUDITS.
Section 6.1. STATUS AND OTHER INFORMATION REGARDING AUDITS AND
DISPUTES. Upon the receipt by Hilton or any Post-Distribution Member (or Park
Place or any Park Place Member, as the case may be) of notice of, or relating
to, an Audit which asserts, proposes or recommends a deficiency, claim or
adjustment (including the receipt of a IRS Form 5701 or comparable form from any
other Taxing Authority) that, if sustained, would affect the liability for Taxes
which are subject to indemnification under this Agreement, Hilton (or Park
Place) shall promptly notify Park Place (or Hilton) in writing of the receipt of
such notice. Hilton (or Park Place) shall use reasonable best efforts to keep
Park Place (or Hilton) advised as to the status of Audits pertaining to Taxes
subject to indemnification under this Agreement. To the extent relating to any
such issue, Hilton (or Park Place) shall promptly furnish Park Place (or Hilton)
with copies of any inquiries or requests for information from any Taxing
Authority or any other administrative, judicial or other governmental authority,
as well as copies of any revenue agent's report or similar report, notice of
proposed adjustment or notice of deficiency.
Section 6.2. CONTROL AND SETTLEMENT.
(a) Hilton shall have the right to control, and to represent the
interests of all affected taxpayers in, any Audit relating, in whole or in part,
to any Pre-Closing Taxable Period or any other Taxable Period for which Hilton
is responsible, in whole or in part, for Taxes under Section 2.7(a) and Article
III, and to employ counsel of its choice at its expense; PROVIDED, HOWEVER,
that, with respect to such issues that may impact Park Place or any Park Place
Member for any Post-Closing Taxable Period or for which Park Place may be
responsible in part under Section 2.7(a) and Article III, Hilton shall in good
faith (i) afford Park Place full opportunity to
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observe at any such proceedings and to review any submissions related to such
issues, (ii) consult with Park Place regarding its comments with respect to such
proceedings and submissions in an effort to resolve any differences with respect
to Hilton's positions with regard to such issues, (iii) in good faith consider
Park Place's recommendations for alternative positions with respect to such
issues, (iv) advise Park Place of the reasons for rejecting any such alternative
position, and (v) provide Park Place with final copies of such submissions. In
the event of any disagreement regarding the proceedings, Hilton shall have the
ultimate control of the Audit and any settlement or other resolution thereof,
PROVIDED, HOWEVER, that Hilton shall not agree to settle any such proceeding in
a manner that could reasonably be expected to have a material and adverse effect
on (A) any indemnification obligation of Park Place hereunder or (B) any Tax
liability of the Park Place Group or any Park Place Member for any Taxable
Period, without the prior written consent of Park Place, which consent shall not
be unreasonably withheld.
(b) Park Place shall have the right to control, and to represent the
interests of all affected taxpayers in, any Audit relating solely to any
Post-Closing Taxable Period of the Park Place Group or any Park Place Member, or
relating to any other Taxable Period for which Park Place is solely responsible
for Taxes under Section 2.7(b) and Article III, and to employ counsel of its
choice at its expense; PROVIDED, HOWEVER, that Park Place shall in good faith
(i) afford Hilton full opportunity to observe at any such proceedings and to
review any submissions related thereto and (ii) not agree to settle any such
proceeding in a manner that could reasonably be expected to have a material and
adverse effect on (A) any indemnification obligation of Hilton hereunder or (B)
any Tax liability of the Hilton Group or any Post-Distribution Member for any
Taxable Period, without the prior written consent of Hilton, which consent shall
not be unreasonably withheld.
ARTICLE VII.
MISCELLANEOUS.
Section 7.1. EFFECTIVENESS. This Agreement shall be effective from
and after the Closing Date and shall survive until the expiration of any
applicable statute of limitations.
Section 7.2. ENTIRE AGREEMENT. This Agreement and the Distribution
Agreement, together with all documents and instruments referred to herein and
therein constitute the entire agreement and supersede and terminate all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof.
Section 7.3. GUARANTEES OF PERFORMANCE. Hilton and Park Place
hereby guarantee the complete and prompt performance by the members of their
respective Affiliated Groups of all of their obligations and undertakings
pursuant to this Agreement. If, subsequent to the Effective Time, either Hilton
or Park Place shall be acquired by another entity such that 50% or more of its
common stock is in common control, such acquirer shall, by making such
acquisition, simultaneously agree to jointly and severally guarantee the
complete and prompt performance by the acquired corporation and any Affiliate of
the acquired corporation of all of their obligations and undertakings pursuant
to this Agreement.
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Section 7.4. SEVERABILITY. The invalidity of any portion hereof
shall not affect the validity, force or effect of the remaining portions
hereof. If it is ever held that any restriction hereunder is too broad to
permit enforcement of such restriction to its fullest extent, each party
agrees that a court of competent jurisdiction may enforce such restriction to
the maximum extent permitted by law, and each party hereby consents and
agrees that such scope may be judicially modified accordingly in any
proceeding brought to enforce such restriction.
Section 7.5. INDULGENCES, ETC.. Neither the failure nor any delay
on the part of any party hereto to exercise any right under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right preclude any other or further exercise of the same or any other right, nor
shall any waiver of any right with respect to any occurrence be construed as a
waiver of such right with respect to any other occurrence.
Section 7.6. GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of New York, without regard
to any applicable conflicts of laws.
Section 7.7. NOTICES. All notices, requests, demands and other
communications required or permitted under this Agreement shall be made in the
manner provided in Section 9.05 of the Distribution Agreement.
Section 7.8. AMENDMENTS. This Agreement may be amended at any time
only by written agreement executed and delivered by duly authorized officers of
Park Place and Hilton.
Section 7.9. ASSIGNMENTS. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by either of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
Section 7.10. HEADINGS; REFERENCES. The article, section and
paragraph headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. All references herein to "Article", "Sections" or "Exhibits" shall
be deemed to be references to Articles or Sections hereof or Exhibits hereto
unless otherwise indicated.
Section 7.11. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.
Section 7.12. PREDECESSORS AND SUCCESSORS. To the extent necessary
to give effect to the purposes of this Agreement, any reference to any
corporation, Affiliated Group or member of an Affiliated Group shall also
include any predecessors or successors thereto, by operation of law or
otherwise.
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Section 7.13. TAX ELECTIONS. Nothing in this Agreement is intended
to change or otherwise affect any previous tax election made by or on behalf of
the Hilton Group (including the election with respect to the calculation of
earnings and profits under Code Section 1552 and the regulations thereunder).
Hilton, as common parent of the Hilton Group, shall continue to have sole
discretion to make any and all elections with respect to all members of the
Hilton Group for all Taxable Periods for which it is obligated to file Tax or
Information Returns under Section 2.1(a). Park Place, as common parent of the
Park Place Group, shall have sole discretion to make any and all elections with
respect to all members of the Park Place Group for all Taxable Periods for which
it is obligated to file Tax or Information Returns under Section 2.1(b);
PROVIDED, HOWEVER, that any such election for a Pre-Closing Taxable Period or
Pre-Closing Straddle Period shall be made only with the written consent of
Hilton, which consent shall not be unreasonably withheld.
Section 7.14. SPECIFIC PERFORMANCE. The parties hereto agree that
the remedy at law for any breach of this Agreement will be inadequate and that
any party by whom this Agreement is enforceable shall be entitled to specific
performance in addition to any other appropriate relief or remedy. Such party
may, in its sole discretion, apply to a court of competent jurisdiction for
specific performance or injunctive or such other relief as such court may deem
just and proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable laws, each party waives any
objection to the imposition of such relief.
Section 7.15. FURTHER ASSURANCES. Subject to the provisions hereof,
the parties hereto shall make, execute, acknowledge and deliver such other
instruments and documents, and take all such other actions, as may be reasonably
required in order to effectuate the purposes of this Agreement and to consummate
the transactions contemplated hereby. Subject to the provisions hereof, each
party shall, in connection with entering into this Agreement, performing its
obligations hereunder and taking any and all actions relating hereto, comply
with all applicable laws, regulations, orders and decrees, obtain all required
consents and approvals and make all required filings with any governmental
agency, other regulatory or administrative agency, commission or similar
authority and promptly provide the other party with all such information as it
may reasonably request in order to be able to comply with the provisions of this
sentence.
Section 7.16. SETOFF. All payments to be made by any party under
this Agreement shall be made without setoff, counterclaim or withholding, all of
which are expressly waived.
Section 7.17. EXPENSES. Except as specifically provided in this
Agreement or in a Related Agreement, all fees and expenses incurred in
connection with this Agreement and the consummation of the transactions
contemplated hereby shall be paid by the party incurring such expenses.
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Section 7.18. RULES OF CONSTRUCTION. Any ambiguities shall be resolved without
regard to which party drafted the Agreement.
[Signature Page To Follow]
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IN WITNESS WHEREOF, Hilton and Park Place have caused this Agreement
to be signed by their respective duly authorized officers as of the date first
above written.
HILTON HOTELS CORPORATION,
a Delaware Corporation
BY: /s/ Thomas E. Gallagher
-----------------------------
Name: Thomas E. Gallagher
Title: Executive Vice President and
General Counsel
PARK PLACE ENTERTAINMENT CORPORATION,
a Delaware corporation
By: /s/ Scott A. LaPorta
-------------------------------
Name: Scott A. LaPorta
Title: Executive Vice President and
Chief Financial Officer
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