ASSIGNMENT AND LICENSE AGREEMENT
THIS ASSIGNMENT AND LICENSE AGREEMENT (this "AGREEMENT") is made
and entered into as of this 31st day of December, 1998 by and among HILTON
HOTELS CORPORATION, a Delaware corporation ("HILTON"), CONRAD INTERNATIONAL
ROYALTY CORPORATION, a Nevada corporation ("CRC") and PARK PLACE
ENTERTAINMENT CORPORATION (f/n/a Gaming Co., Inc.), a Delaware corporation
("PARK PLACE"). Hilton and CRC shall sometimes be collectively referred to
herein as "LICENSORS."
RECITALS
WHEREAS, Hilton, directly and through its subsidiaries, owns,
operates and develops certain gaming facilities (the "GAMING BUSINESS"), and
owns, operates and develops lodging properties and engages in franchising of
lodging properties (the "RETAINED BUSINESS");
WHEREAS, the Board of Directors of Hilton has determined that it is
in the best interests of Hilton and the stockholders of Hilton to separate
the Gaming Business from the Retained Business through the distribution (the
"DISTRIBUTION") to the holders of Hilton's common stock of all of the
outstanding shares of Park Place's common stock;
WHEREAS, in order to effect such separation, Hilton and Park Place
have entered into that certain Distribution Agreement, dated December 31,
1998 (the "DISTRIBUTION AGREEMENT"), pursuant to which Hilton will contribute
to Park Place and/or its subsidiaries, prior to the Distribution, all of the
operations, assets and liabilities of Hilton and the Retained Business
Subsidiaries (as defined below) comprising the Gaming Business;
WHEREAS, Schedule A hereto lists certain federal and state
registered trademarks and service marks, and certain trademarks and service
marks for which registration is pending, that are owned by Hilton and certain
Retained Business Subsidiaries and that are used primarily in the Gaming
Business (the "ASSIGNED MARKS"), including without limitation the marks
"Flamingo" and "Bally's," and any other marks obtained by Hilton or its
Subsidiaries as a result of the Bally's Acquisition (as defined below), to
the extent still held by Hilton or its Subsidiaries;
WHEREAS, the name and mark "Hilton" and certain variations thereof,
including certain related service marks, marks of origin, insignia, slogans,
emblems, symbols and other identifying characteristics, whether or not
registered in any jurisdiction (the "HILTON MARK"), is owned by Hilton in the
United States and is used primarily in the Retained Business but is also used
in the Gaming Business. The primary Hilton Mark is set forth in Schedule B
hereto, as such schedule may be modified from time to time;
WHEREAS, the name and mark "Conrad," and certain variations thereof
including certain related service marks, marks of origin, insignia, slogans,
emblems, symbols and other identifying characteristics, whether or not
registered in any jurisdiction, and as may be modified from time to time (the
"CONRAD MARK"), is owned by CRC, and is used primarily in the Retained
Business but is also used in the Gaming Business. The primary Conrad Mark is
set forth in Schedule C hereto, as such schedule may be modified from time to
time;
WHEREAS, Hilton and the Hilton Parties (as defined below) desire to
assign and transfer to Park Place and the Gaming Subsidiaries (as defined
below), and Park Place and the Gaming Subsidiaries desire to acquire, (i) all
of the right, title and interest of Hilton and the Retained Business
Subsidiaries in and to the Assigned Marks and (ii) the rights to receive
license fees from third parties pursuant to certain license agreements with
respect to the usage of the Conrad Mark at certain properties;
WHEREAS, Hilton desires to license to the Park Place Parties (as
defined below) the right to use the Hilton Mark in connection with the
operation of certain casino hotels in the United States and the Park Place
Parties desire to license the Hilton Mark from Hilton, in accordance with the
terms of this Agreement; and
WHEREAS, CRC desires to license to the Park Place Parties the right
to use the Conrad Mark in connection with the operation of three casino
hotels and the Park Place Parties desire to license the Conrad Mark from CRC,
in accordance with the terms of this Agreement. The Hilton Mark and the
Conrad Mark are sometimes collectively referred to herein as the "LICENSED
MARKS."
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, the mutual
promises contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Licensors and Park
Place agree as follows:
1. DEFINITIONS. As used herein, the following terms have the
meanings set forth below:
"ASSIGNED MARKS" has the meaning set forth in the Recitals.
"ASSIGNED RIGHTS" has the meaning set forth in Section 2.
"BALLY'S ACQUISITION" shall mean the acquisition of Bally Entertainment
Corporation by Hilton, which was effected on December 19, 1996.
"CRC" has the meaning set forth in the Recitals.
"CONRAD INTERNATIONAL MANAGEMENT AGREEMENTS" shall mean the agreements
under which an affiliate of CRC manages the Conrad Properties.
"CONRAD LICENSE AGREEMENTS" has the meaning set forth in Section 2(a).
"CONRAD MARK" has the meaning set forth in the Recitals.
"CONRAD PROPERTIES" means Conrad Jupiters, Gold Coast (Australia),
Conrad International Treasury Casino, Brisbane (Australia) and Conrad
International Punta del Este.
"DISTRIBUTION AGREEMENT" has the meaning set forth in the Recitals.
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"DISTRIBUTION DATE" has the meaning set forth in the Distribution
Agreement.
"EXPENSES" has the meaning set forth in Section 8.
"GAMING BUSINESS" has the meaning set forth in the Recitals.
"GAMING SUBSIDIARIES" has the meaning set forth in the Distribution
Agreement.
"HRW TERMS" shall mean the terms and conditions applicable to all hotels
participating in Hilton Reservations Worldwide as set forth in Annex A, as
such terms and conditions may be modified from time to time by Hilton
Reservations Worldwide, L.L.C.
"HILTON" has the meaning set forth in the Preamble.
"HILTON CASINO HOTELS" shall mean Reno Hilton, Las Vegas Hilton,
Atlantic City Hilton, Flamingo Hilton - Reno, Flamingo Hilton - Laughlin, and
Flamingo Hilton - Las Vegas.
"HILTON INDEMNITEES" has the meaning set forth in Section 8.
"HILTON MARK" has the meaning set forth in the Recitals.
"HILTON PARTIES" means Hilton and the Retained Business Subsidiaries.
"HILTON RESERVATIONS WORLDWIDE" shall mean the central reservation
system operated by Hilton Reservations Worldwide, L.L.C. which provides
reservation services to participating hotels.
"HHONORS PROGRAM" shall mean the frequent guest program operated by
Hilton HHonors Worldwide, L.L.C. which allows members to earn point credits
redeemable for various travel related rewards.
"HHONORS TERMS" shall mean the terms and conditions applicable to all
hotels participating in the HHonors Program, as such terms and conditions may
be modified from time to time by Hilton HHonors Worldwide, L.L.C.
"INDEMNIFIED PARTY" has the meaning set forth in Section 8.
"INDEMNITOR" has the meaning set forth in Section 8.
"INITIAL TERM" has the meaning set forth in Section 4.
"INJUNCTION" shall mean the Final Judgment of Permanent Injunction
entered on November 1, 1995 by the United States District Court for the
Southern District of New York in the action HILTON INTERNATIONAL CO. V.
HILTON, ET AL. (Civil Action No. 91 Civ. 751 (JFK)) in the form attached
hereto as Exhibit A.
"LICENSE" has the meaning set forth in Section 3.
"LICENSED MARKS" has the meaning set forth in the Recitals.
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"LICENSORS" has the meaning set forth in the Preamble.
"NET ROOM REVENUES" shall mean total room revenues excluding revenue
attributable to complimentary rooms.
"OTHER HOTELS" shall mean Bally's Las Vegas, Bally's Park Place,
Paris-Las Vegas, and any other hotels now or hereafter owned, operated,
managed or acquired by any Park Place Party.
"PARK PLACE" has the meaning set forth in the Preamble.
"PARK PLACE PARTIES" means Park Place and the Gaming Subsidiaries, while
such Persons remain Subsidiaries of Park Place.
"PARK PLACE PARTY INDEMNITEE" has the meaning set forth in Section 8.
"PERSON" means any individual, corporation, partnership, association,
trust company or other entity or organization, including any government
entity or authority.
"PROCEEDING" has the meaning set forth in Section 8.
"RETAINED BUSINESS" has the meaning set forth in the Recitals.
"RETAINED BUSINESS SUBSIDIARIES" has the meaning set forth in the
Distribution Agreement.
"SUBSIDIARY" shall mean, with respect to any Person, (a) each
corporation, partnership, joint venture, limited liability company or other
legal entity of which such Person owns, either directly or indirectly, 50% or
more of the stock or other equity interests the holders of which are
generally entitled to vote for the election of the board of directors or
similar governing body of such corporation, partnership, joint venture or
other legal entity and (b) each partnership or limited liability company in
which such Person or another Subsidiary of such Person is the general
partner, managing partner or other otherwise controls.
2. ASSIGNMENT OF MARKS AND LICENSES.
(a) Without representation or warranty of any kind, express
or implied, and subject to all existing licenses, the Hilton Parties hereby
grant and assign to Park Place all of their right, title and interest in and
to (i) the Assigned Marks, (ii) all federal, state and foreign registrations
related to the Assigned Marks and all pending applications therefor, (iii)
all statutory, common law, equitable and civil law rights (whether arising
under federal, state or foreign law) related to the Assigned Marks, (iv) all
of the goodwill associated with the Assigned Marks, (v) all rights to income,
royalties, license and franchise fees and any other payments now or hereafter
due or payable with respect to the Assigned Marks, including without
limitation all damages and payments for past, present and future
infringements thereof, (vi) the right to sue for, and all rights of recovery
with respect to, all past, present and future infringements of the Assigned
Marks, (vii) all rights of the Hilton Parties under all license agreements
with respect to the Assigned Marks, (viii) all other rights and privileges
pertaining to or associated with the Assigned Marks throughout the world, the
same to be held and enjoyed by Park Place as fully as
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the same would have been held and enjoyed by the Hilton Parties had this
assignment not have been made and (ix) all rights of CRC to receive license
fees under the license agreements (the "CONRAD LICENSE AGREEMENTS") which
license the Conrad Mark for use with respect to the Conrad Properties (the
rights described in clauses (i) through (ix) above are collectively referred
to herein as the "ASSIGNED RIGHTS").
(b) Park Place hereby assumes all obligations and liabilities
of the Hilton Parties pertaining to the Assigned Rights, including without
limitation, any obligations and liabilities arising under any license
agreements to which Hilton or any of the Retained Business Subsidiaries is a
party and that are being assigned to Park Place under Section 2(a)(vii).
(c) Notwithstanding the grant to Park Place of the CRC's
rights to receive license fees under the Conrad License Agreements, pursuant
to Section 2(a)(ix), CRC shall retain its ownership of the Conrad Mark and
title to the Conrad Mark shall not be assigned to Park Place by virtue of
this Agreement.
3. LICENSE. Hilton hereby grants to the Park Place Parties a
non-exclusive right and license (the "HILTON LICENSE"), subject to the terms
and conditions set forth herein, to use the Hilton Mark for five years
following the Distribution Date, except that the Hilton License shall be for
10 years with respect to the Las Vegas Hilton, Reno Hilton and Atlantic City
Hilton (the "EXTENDED TERM"). CRC hereby grants to the Park Place Parties a
non-exclusive right and license (the "CONRAD LICENSE"), subject to the terms
and conditions set forth herein, to use the Conrad Mark for the duration of
the Conrad License Agreement applicable to such Conrad Property. The Hilton
License and the Conrad License shall sometimes be referred to herein,
collectively, as the "LICENSE."
The Licensed Marks shall be used only in accordance with the
following provisions:
(a) the Park Place Parties shall use the Hilton Mark solely
in connection with (i) the operation of the Hilton Casino Hotels in the
United States and in connection with the advertising and promotion of such
hotels worldwide; and (ii) the participation of Other Hotels in Hilton
Reservations Worldwide and/or the HHonors Program;
(b) the Park Place Parties shall use the Conrad Marks solely
in connection with the operation of Conrad Properties and in connection with
the advertising and promotion of the Conrad Properties worldwide; and
(c) the Licensed Marks may be used only in a manner
consistent with the use of such Licensed Mark during the year preceding this
Agreement and, without the prior written consent of the Licensor of such
Licensed Mark, which consent may be withheld at such Licensor's sole
discretion, Park Place shall not expand its business or operations to include
use of any of the Licensed Marks on products or services beyond those
products or services in use by Hilton or CRC on the Distribution Date.
4. PAYMENT OF FEES AND PARTICIPATION IN HILTON RESERVATIONS
WORLDWIDE AND THE HHONORS PROGRAM. The Park Place Parties shall pay no
royalty fees for the right to use the Hilton Mark for the first two years of
the term (the "INITIAL TERM") of the Hilton License.
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Thereafter, the Park Place Parties shall pay the Hilton Parties a royalty fee
of 3% of the Net Room Revenues of each hotel that is branded with the Hilton
Mark; PROVIDED, THAT, with respect to the Las Vegas Hilton, Reno Hilton and
Atlantic City Hilton, the royalty fee shall be a fixed fee of, in the
aggregate, $5 million per year (the "YEARLY FEE"). The Park Place Parties
shall pay no royalty fees for the right to use the Conrad Mark for the term
of the Conrad License.
(a) Notwithstanding the foregoing, so long as any Park Place
Party shall license the Hilton Mark, such Park Place Party shall cause each
of the Hilton Casino Hotels to do all of the following: (i) participate in
Hilton Reservations Worldwide in accordance with the HRW Terms; (ii)
purchase, install and thereafter maintain, at their sole cost, computer
equipment and other hardware and software and related systems for the
utilization of Hilton Reservations Worldwide; (iii) participate in the
HHonors Program in accordance with the HHonors Terms; (iv) pay the fees
established annually by Hilton Reservations Worldwide, L.L.C. for
participation in Hilton Reservations Worldwide; (v) pay the fees and be
entitled to receive the reimbursements as such fees and reimbursements are
established annually by Hilton HHonors Worldwide, L.L.C., for participation
in the HHonors Program; and (vi) pay a national and regional group
advertising and sales and business promotions services fee to Hilton equal to
1% of Net Room Revenues for such hotel.
(b) As long as any Park Place Party shall license the Conrad
Mark, such Park Place Party shall cause each of the Conrad Properties to do
all of the following: (i) participate in Hilton Reservations Worldwide in
accordance with the HRW Terms; (ii) participate in the HHonors Program in
accordance with the HHonors Terms; (iii) pay the fees established annually by
Hilton Reservations Worldwide, L.L.C. for participation in Hilton
Reservations Worldwide; (iv) purchase, install and thereafter maintain, at
their sole cost, computer equipment and other hardware and software and
related systems for the utilization of Hilton Reservations Worldwide; (v) pay
the fees and be entitled to receive the reimbursements as such fees and
reimbursements are established annually by Hilton HHonors Worldwide, L.L.C.,
for participation in the HHonors Program and (vi) remit to Hilton the
advertising and promotion fees as set forth in the Conrad International
Management Agreements.
(c) Subject to Section 27 hereof, during the term of this
Agreement and at Park Place's request and subject to the approval of Hilton
and its subsidiaries, the Park Place Parties shall cause each of the Other
Hotels to do all of the following: (i) participate in Hilton Reservations
Worldwide in accordance with the HRW Terms; (ii) participate in the HHonors
Program in accordance with the HHonors Terms; (iii) pay the fees established
annually by Hilton Reservations Worldwide, L.L.C. for participation in Hilton
Reservations Worldwide; (iv) purchase, install and thereafter maintain, at
their sole cost, computer equipment and other hardware and software and
related systems for the utilization of Hilton Reservations Worldwide; (v) pay
the fees and be entitled to receive the reimbursements as such fees and
reimbursements are established annually by Hilton HHonors Worldwide, L.L.C.,
for participation in the HHonors Program and (vi) pay a national and regional
group advertising and sales and business promotions services fee to Hilton
equal to 1% of Net Room Revenues for such hotel; PROVIDED, HOWEVER, that
Bally's Park Place shall not be required to pay the fee described in the
preceding clause (vi).
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(d) Notwithstanding anything to the contrary in this
Agreement or in the HRW Terms or HHonors Terms, Hilton HHonors Worldwide,
L.L.C. and Hilton Reservations Worldwide, L.L.C. shall not provide
reservation services or any other services to any hotel or permit the
participation of any hotel in Hilton Reservations Worldwide or the HHonors
Program if the provision of such services or participation would violate
applicable law. As long as such hotels participate in the HHonors Program,
the Hilton Casino Hotels, Conrad Properties, and Other Hotels will have the
same rights to use the HHonors Program trademarks as any other hotels
participating in the HHonors Program.
5. OWNERSHIP OF MARKS.
(a) Hilton acknowledges, without representation, warranty or
inquiry, that, by virtue of the assignment made in Section 2, Park Place is
the exclusive owner of the Assigned Rights. Hilton agrees that no Hilton
Party has any right, title or interest in or to any of the Assigned Rights
from and after the date hereof.
(b) Hilton agrees to cooperate fully with Park Place, at Park
Place's expense, in recording appropriate assignment and other documents
evidencing Park Place's acquisition and ownership of the Assigned Rights.
Hilton agrees to take no action inconsistent with Park Place's ownership of
and interest in the Assigned Rights. Park Place agrees to cooperate fully
with the Hilton Parties at Park Place's expense in recording appropriate
documents evidencing the License to the Park Place Parties.
(c) No Hilton Party shall attack the validity of any of the
Assigned Rights, Park Place's ownership thereof, or any of the terms of this
Agreement, or assist any third party in doing any of the same, and each
Hilton Party hereby waives any right to contest the validity of the Assigned
Rights.
(d) Park Place acknowledges that Hilton is the exclusive
owner of the Hilton Mark and CRC is the exclusive owner of the Conrad Mark.
Park Place agrees that no Park Place Party has any right, title or interest
in or to any Licensed Mark, except as expressly set forth in Sections
2(a)(ix) and 3. Park Place agrees that all uses of any Licensed Mark by the
Park Place Parties and third parties and the goodwill associated with such
uses shall inure solely to the benefit of the Licensor of such Licensed Mark.
Upon termination of its rights to use a Licensed Mark as provided in this
Agreement, all right and interest of such Park Place Party in and to such
Licensed Mark shall revert fully to the Licensor of such Licensed Mark.
(e) Park Place agrees, if requested by either Licensor, to
cooperate fully with such party in recording appropriate documents evidencing
such Licensor's ownership of a Licensed Mark. Park Place agrees to take no
action inconsistent with either Licensor's ownership of and interest in its
Licensed Mark.
(f) No Park Place Party shall attack the validity of either
Licensor's ownership of its Licensed Mark or any of the terms of this
Agreement, or assist any third party in doing any of the same.
6. LIMITATIONS ON USE OF THE LICENSED MARKS. The License is
expressly subject to the following conditions:
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(a) in its use of any Licensed Mark, each Park Place Party
shall faithfully reproduce such mark's design, coloration and appearance, as
such design, coloration and appearance may be modified from time to time by
the Licensor of such Licensed Mark. No Park Place Party shall modify the
design, coloration or appearance of a Licensed Mark unless requested to do so
in writing by the Licensor of such Licensed Mark;
(b) all uses of a Licensed Mark by any Park Place Party,
other than any previously authorized use in effect as of the Distribution
Date in connection with the Gaming Business, shall be subject to the
applicable Licensor's prior written approval, which approval shall not be
unreasonably withheld or delayed, on the basis of samples submitted by such
Park Place Party and shall be made in strict conformance with such reasonable
specifications as the Licensor of the Licensed Mark shall establish, as such
specifications may be modified by the applicable Licensor from time to time;
(c) all displays of a Licensed Mark by each Park Place Party
shall bear such copyright, trademark, service mark and other notices as the
Licensor of such Licensed Mark shall reasonably require, and each Park Place
Party shall adhere to any other reasonable and customary posting requirements
developed by the applicable Licensor with respect to such Licensed Mark;
(d) no Park Place Party shall use a Licensed Mark as part of,
or display such Licensed Mark in conjunction with, any other names or marks
except with the Licensor of such Licensed Mark's prior written approval;
(e) no Park Place Party shall use a Licensed Mark or any
confusingly similar or diluting mark, term or design, except as expressly
authorized in this Agreement, and no Park Place Party shall attempt to
register or aid any third party in using or attempting to register any such
mark, term or design;
(f) no Park Place Party shall use a Licensed Mark in any
manner that will indicate that it is using such Licensed Mark other than as a
licensee; and
(g) no Park Place Party shall, and shall cause each of its
Subsidiaries and affiliates not to, at any time use the trademark, name or
sign "Hilton" or any variation thereof outside the United States to
represent, directly or indirectly, that any hotel, bar, restaurant, gaming
interest or related facility is owned, operated or licensed by Hilton in such
area or is a member of its group.
7. QUALITY CONTROL.
(a) The Licensors are familiar with the quality of the goods
and services to be provided by Park Place and the Gaming Subsidiaries in the
Gaming Business and find, at the present time, the quality of such goods and
services to be acceptable. All goods and services to be provided by the Park
Place Parties under a Licensed Mark shall be provided substantially in
accordance with the quality standards of Park Place and the Gaming
Subsidiaries now in place or with such other quality standards as the
applicable Licensor(s) may reasonably establish from time to time.
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(b) Each of Hilton and CRC shall have the right, at
reasonable times and with prior notice, to inspect any facility operated by
any Park Place Party under a Licensed Mark, and any goods (including, without
limitation, any advertising and promotional materials used in connection with
the Gaming Business and Conrad Properties) provided by any Park Place Party
that bear a Licensed Mark, at any time for the purpose of determining whether
they have met or are meeting the quality standards required under this
Agreement. Each Park Place Party shall promptly produce and deliver (at its
own expense) to the applicable Licensor such examples of its use of the
Licensor's Licensed Mark as such Licensor shall reasonably request.
8. LIMITATION OF LIABILITY; INDEMNITY.
(a) THE ASSIGNED RIGHTS AND THE LICENSED MARKS ARE PROVIDED
TO THE PARK PLACE PARTIES "AS IS." THE HILTON PARTIES DISCLAIM ANY EXPRESS
OR IMPLIED WARRANTY, INCLUDING NON-INFRINGEMENT, WITH RESPECT TO THE ASSIGNED
RIGHTS AND THE LICENSED MARKS. IN NO EVENT SHALL THE HILTON PARTIES BE
LIABLE FOR ANY MATTER WHATSOEVER RELATING TO THE USE BY ANY PARK PLACE PARTY
OF THE LICENSED MARKS, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION 8
AND SECTION 9 OF THIS AGREEMENT.
(b) Park Place shall indemnify, defend and hold harmless the
Hilton Parties, their past and present affiliates, subsidiaries, other
related companies, licensees and properties, and each of the foregoing
entities' respective past and present employees, representatives, directors,
officers, partners and agents (each, a "HILTON PARTY INDEMNITEE"), from and
against any and all costs, liabilities and expenses, including, without
limitation, interest, penalties, attorney and third party fees, and all
amounts paid in the investigation, defense and/or settlement of any claim,
action or proceeding (collectively, "EXPENSES"), that relate to (i) the
provision or promotion of goods or services by any Park Place Party under a
Licensed Mark, notwithstanding any approval which may have been given by any
Hilton Party Indemnitee with respect to the provision or promotion of such
goods or services and/or (ii) any liabilities or obligations arising under
any license agreement assigned to the Park Place Parties pursuant to Section
2 of this Agreement; PROVIDED, HOWEVER, that the Park Place Parties shall
have no obligation to indemnify, defend and hold harmless any Hilton Party
Indemnitee under clause (i) above from any Expenses resulting from any claim
of any third party that a Licensed Mark is invalid, unless such claim of
invalidity arises from a Park Place Party's failure to comply with the terms
of this Agreement.
(c) Hilton or CRC, as applicable, shall indemnify, defend and
hold harmless the Park Place Parties and their respective past and present
employees, representatives, directors, officers and agents (each, a "PARK
PLACE PARTY INDEMNITEE"), from and against any and all Expenses resulting
from any claim asserted against any Park Place Party Indemnitee by any third
party alleging that a Park Place Party's use of a Licensed Mark infringes
upon the proprietary rights of such third party, PROVIDED that such claim
arises from such Park Place Party's use of such Licensed Mark in accordance
with the terms of this Agreement.
(d) If any claim or action is asserted against any party that
would entitle such party to indemnification pursuant to Section 8(b) or (c)
(a "PROCEEDING"), any party
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who seeks indemnification (the "INDEMNIFIED PARTY") shall give written notice
thereof to the party or parties from whom indemnification is sought (the
"INDEMNITOR") promptly, but in no event later than thirty (30) days after
such Indemnified Party learns of the existence of such Proceeding; PROVIDED,
HOWEVER, that the Indemnified Party's failure to give the Indemnitor prompt
notice shall not bar the Indemnified Party's right to indemnification unless
such failure has materially prejudiced the Indemnitor's ability to defend
such Proceeding. The Indemnitor shall have the right to employ counsel
reasonably acceptable to the Indemnified Party to defend any such Proceeding,
or to compromise, settle or otherwise dispose of the same, if the Indemnitor
deems it advisable to do so, all at the expense of the Indemnitor, PROVIDED
that the Indemnitor shall not have the right to control the defense of any
such Proceeding unless it has acknowledged in writing its obligation to
indemnify the Indemnified Party fully from all Expenses incurred as a result
of such Proceeding. The Indemnitor shall not settle, or consent to the entry
of any judgment in, any Proceeding without obtaining either (i) an
unconditional release of the Indemnified Party from all liability with
respect to all claims underlying such Proceeding or (ii) the prior written
consent of the Indemnified Party. Each Indemnitor and each Indemnified Party
will fully cooperate with each other in any such Proceeding and shall make
available to each other any books or records useful for the defense of any
such Proceeding. If the Indemnitor fails to acknowledge in writing its
obligation to defend against such Proceeding within fifteen (15) days after
receiving written notice thereof as provided above, the Indemnified Party
shall be free to dispose of the matter, at the expense of the Indemnitor, in
any way in which the Indemnified Party reasonably deems to be in its best
interest.
(e) The parties hereto are also subject to indemnification
provisions in the Distribution Agreement. The indemnification provisions set
forth herein are intended to supplement, but not to replace, the
indemnification provisions in the Distribution Agreement. To the extent the
indemnification provisions set forth herein conflict with those set forth in
the Distribution Agreement, those provisions that provide the greatest
benefits to the Indemnified Party shall control.
9. INFRINGEMENT PROCEEDINGS. Each Park Place Party shall provide
Hilton or CRC, as applicable, with prompt written notice of (i) any
unauthorized uses by third parties of a Licensed Mark, or of confusingly
similar or diluting trademarks, service marks, trade names, terms or designs,
which come to the attention of such Park Place Party and (ii) any action
commenced or threatened against such Park Place Party in connection with its
use of a Licensed Mark. Each Licensor shall have the right, in its sole
discretion, to commence infringement or unfair competition actions regarding
any unauthorized use by third parties of such Licensor's Licensed Mark or any
confusingly similar or diluting devices. The Park Place Parties shall
cooperate with and assist the Licensors in their investigation and
prosecution of any of the foregoing.
10. INJUNCTION. Each Park Place Party agrees that if application is
made by Hilton or Hilton International CO to reinstate the Injunction, such Park
Place Party shall not oppose or contest such application or take any other
action to interfere with the reinstatement of the Injunction. Each Park Place
Party shall cooperate, if requested by Hilton and/or Hilton International CO, in
obtaining court approval of any such application and shall execute any documents
required by the court in connection therewith. If the Injunction is reinstated,
each
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Park Place Party shall take all actions necessary to comply with the terms
and provisions set forth in the Injunction.
11. RELATIONSHIP OF PARTIES. Nothing in this Agreement shall be
construed to create any relationship among the parties of agency,
partnership, franchise or joint venturer or render any party liable for any
debts or obligations incurred by any other party hereto. No party is
authorized to enter into agreements for or on behalf of any other party
hereto, to collect any obligation due or owed to any such party, or to bind
any other party in any manner whatsoever.
12. ASSIGNMENT AND SUBLICENSE. No Park Place Party may assign its
rights under this Agreement or sublicense its rights to use either Licensed
Mark to a third party without the prior written consent of the Licensor of
such Licensed Mark (which consent may be withheld in the sole discretion of
such Licensor). Upon any assignment or sublicense entered into in accordance
with this Section 12, such assignee or sublicensee shall enter into an
assignment or sublicense agreement with such Park Place Party, in a form
reasonably satisfactory to the applicable Licensor, pursuant to which such
assignee or sublicensee agrees to comply with, and be bound by, the terms of
this Agreement and acknowledges the status of Hilton and CRC as intended
third party beneficiaries of such assignment or sublicense agreement. If
requested by the applicable Licensor, such assignee or sublicensee shall also
execute an instrument or instruments pursuant to which such assignee or
sublicensee shall be bound by, and become a party to, this Agreement. Any
purported assignment or sublicense by any Park Place Party not in compliance
with the terms of this Agreement shall be null and void. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of
the parties and their successors and assigns.
13. TERM; TERMINATION OF LICENSE.
(a) This Agreement, unless earlier terminated pursuant to
this Section 13, shall expire upon the later to occur of the expiration (or
earlier termination) of the Hilton License and the Conrad License. By mutual
agreement of the parties, the term of this Agreement may be renewed with
respect to any License for an extended period to be determined by the parties.
(b) During the Initial Term, the Park Place Parties shall be
required to use the Hilton Mark at each of the Hilton Casino Hotels.
Thereafter, the Park Place Parties may terminate use of the Hilton Mark at
any Hilton Casino Hotel by giving the Hilton Parties at least six months'
written notice of the Park Place Parties' decision to terminate use of the
Hilton Mark; PROVIDED, HOWEVER, that with respect to the Las Vegas Hilton,
Reno Hilton and Atlantic City Hilton, the Park Place Parties shall be
required to use the Hilton Mark for the Extended Term, except the Park Place
Parties may terminate use of the Hilton Mark if: (i) the Las Vegas Hilton,
Reno Hilton and Atlantic City Hilton are sold by the Park Place Parties and
the Park Place Parties pay the Hilton Parties the present value of the Yearly
Fee due under the remainder of the Extended Term, discounted back at a six
percent annual rate or (ii) after the fifth anniversary of the date hereof,
the Park Place Parties provide the Hilton Parties with at least six months'
written notice of the Park Place Parties' decision to terminate use of the
Hilton Mark with respect to the Las Vegas Hilton, Reno Hilton and Atlantic
City Hilton, and the Park Place
11
Parties pay the Hilton Parties the present value of the Yearly Fee due under
the remainder of the Extended Term, discounted back at a six percent annual
rate.
(c) Notwithstanding any of the foregoing, any party may at
any time terminate this Agreement in the event of a material breach by any
other party of any provision herein that has not been cured within ten days
following the receipt by the breaching party of notice of such breach,
PROVIDED, HOWEVER, that the availability of such right of termination shall
not prejudice the terminating party's right to pursue any additional remedies
at law or in equity with respect to such breach.
14. EFFECT OF TERMINATION.
(a) Upon the termination of this Agreement, the Park Place
Parties shall:
(i) immediately discontinue use of the Licensed Marks,
refrain from using any confusingly similar marks, terms or designs, and no
longer possess any right or interest in the Licensed Marks; and
(ii) if Hilton requires, cooperate with Hilton to apply
to the appropriate authorities to cancel from all governmental records the
recording of this Agreement or to record the termination of this Agreement.
(b) Notwithstanding any termination of this Agreement, (i)
the provisions of Section 2 (Assignment of Marks and Licenses), Section 5
(Ownership of Marks), Section 6(e) (Limitations on Use of the Licensed
Marks), Section 8 (Limitation on Liability; Indemnity), Section 15
(Severability), Section 17 (Specific Performance), Section 18 (Arbitration),
Section 19 (Choice of Law), Section 20 (Attorneys' Fees) and Section 25
(Waiver) of this Agreement shall remain in full force and effect in
perpetuity and (ii) the provisions of Section 14(a) of this Agreement shall
remain in effect until satisfied in full.
15. SEVERABILITY. The invalidity or partial invalidity or
unenforceability of any portion of this Agreement shall not affect the
validity or enforceability of any other portion. If it is ever held that any
covenant hereunder is too extensive to permit enforcement of such restriction
to its fullest extent, each party agrees that a court of competent
jurisdiction may enforce such covenant 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
covenant.
16. REMEDIES. Each of the parties acknowledge and agree that
money damages would be inadequate relief for any breach or threatened breach
by the other party of its obligations hereunder, and that upon such breach,
the non-breaching party or parties, as the case may be, shall be entitled to
injunctive or other equitable relief for any breach or threatened breach
thereof.
17. 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
12
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.
18. ARBITRATION. The parties hereto agree that any dispute,
controversy or disagreement between the parties related to the obligations of
the parties under this Agreement in respect of which resolution cannot be
reached shall be submitted for mediation and final and binding arbitration in
accordance with Section 9.14 of the Distribution Agreement, including Section
9.14(c) thereof regarding the parties' ability to seek specific performance
or injunctive relief thereof.
19. CHOICE OF LAW. This Agreement shall be construed under and
entered in accordance with the laws of the State of New York.
20. ATTORNEYS' FEES. If any party commences an action against the
other with respect to this Agreement, the prevailing party in such action
shall be entitled to an award of reasonable costs and expenses of mediation,
arbitration and/or litigation, including reasonable attorneys' fees, to be
paid by the non-prevailing party.
21. EXPENSES. Except as specifically provided otherwise in this
Agreement, all fees and expenses incurred in connection with this Agreement
and the consummation of the transactions contemplated hereby shall be paid by
Park Place. In addition, it is understood and agreed that Park Place shall
pay the legal, recording, filing and out-of-pocket expenditures in connection
with (a) the filing and recordation of the assignment of the Assigned Marks
and the License and (b) any accrued and unpaid fees and expenses with respect
to legal, recording, filing and other expenses related to the Assigned Marks.
22. ENTIRE AGREEMENT. This Agreement (and the exhibit, annexes
and schedules hereto which are incorporated by reference herein and made part
hereof) and the Distribution Agreement (including any Ancillary Agreements,
as such term is defined in the Distribution Agreement) constitute the entire
agreement and understanding among the parties hereto with respect to the
subject matter covered by such agreements, and supersedes any prior or
contemporaneous agreement or understanding related to the subject matter
hereof and thereof. To the extent that the terms of this Agreement and
similar terms of the Distribution Agreement or any Ancillary Agreement are in
conflict, the interpretation given to the conflicting terms of the
Distribution Agreement shall govern the interpretation and performance of
this Agreement.
23. AMENDMENTS. This Agreement may not be amended, supplemented
or modified in any respect except by written agreement among the parties,
duly signed by their respective authorized representatives.
24. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all such
counterparts together shall constitute but one and the same instrument.
25. WAIVER. Park Place may specifically waive any breach of this
Agreement by the Hilton Parties and Hilton may waive any breach of this
Agreement by a Park Place Party;
13
PROVIDED, HOWEVER, that no such waiver shall be deemed effective unless in
writing, signed by the waiving party, and specifically designating the breach
waived. No waiver shall constitute a continuing waiver of similar or other
breaches.
26. NOTICES. Any notice required or permitted hereunder shall be
in writing and shall be deemed received (a) upon personal delivery, if so
delivered, (b) upon three (3) business days after having been deposited in
the United States mail, first class, postage prepaid, return receipt
requested, or (c) on the next business day if sent by nationally recognized
overnight delivery service. In each such case, notices shall be addressed as
follows:
If to Hilton:
Hilton Hotels Corporation
9336 Civic Center Drive
Beverly Hills, CA 90210
Attn.: General Counsel
Telecopy: (310) 205-7677
If to CRC:
c/o Hilton Hotels Corporation
9336 Civic Center Drive
Beverly Hills, CA 90210
Attn.: General Counsel
Telecopy: (310) 205-4613
If to one or more of the Park Place Parties:
Park Place Entertainment Corporation
3930 Howard Hughes Parkway, 4th Floor
Las Vegas, Nevada 89109
Attn.: General Counsel
Fax: (702) 699-5179
or to such other address as one party may designate to the other by written
notice given in accordance with this Section 26.
27. NOTICE OF ENTRY INTO PARK PLACE MARKETS. Hilton shall give
Park Place six months' written notice (the "NOTICE OF ENTRY") prior to the
development or acquisition by any Hilton Party of any casino hotels branded
with the Hilton Mark or the Conrad Mark within any Park Place market. If the
Park Place Party operating in such Park Place market provides Hilton, within
30 days of receipt of such Notice of Entry, of its agreement to cease using
the Hilton Mark or Conrad Mark, as the case may be, in such market within six
months and of its decision to withdraw from Hilton Reservations Worldwide and
the HHonors Program (the "NOTICE OF WITHDRAWAL"), Hilton shall use its
reasonable best efforts to remove such Park Place Party from Hilton
Reservations Worldwide and the HHonors Program within six months of Hilton's
receipt of such Notice of Withdrawal.
14
28. FURTHER ASSURANCES. The parties hereto hereby covenant and
agree to execute and deliver all such documents, make such government
filings, and to do or cause to be done all such acts or things as may be
necessary to complete and effect the transactions contemplated hereby.
29. COMPLIANCE BY SUBSIDIARIES. Hilton shall take all such
actions as are necessary to ensure compliance with the terms of this
Agreement by the Hilton Parties other than Hilton; and Park Place shall take
all such actions as are necessary to ensure compliance with the terms of this
Agreement by the Park Place Parties other than Park Place.
30. HEADINGS. The descriptive headings of the several sections of
this Agreement are for convenience only and do not constitute a part of the
Agreement or affect its meaning or interpretation.
[Signature page to follow]
15
IN WITNESS WHEREOF, a duly authorized representative of each party
has executed this Agreement as of the date first written above.
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
CONRAD INTERNATIONAL ROYALTY CORPORATION,
a Nevada corporation
By: /s/ Robert M. La Forgia
---------------------------------------
Name: Robert M. La Forgia
Title: Senior Vice President and Controller
S-1
STATE OF CALIFORNIA )
---------------
) ss:
COUNTY OF LOS ANGELES )
---------------
Before me, a Notary Public, in and for said County and State, on
this day personally appeared Thomas E. Gallagher, the Executive Vice
President and General Counsel of Hilton Hotels Corporation, known to me as
the person whose name is subscribed to the foregoing instrument.
Given under my hand and seal this 23rd day of December, 1998.
/s/ David Marote
[SEAL] ---------------------------------------
Notary Public
My Commission Expires: 8/8/2002
---------------------------------------
STATE OF CALIFORNIA )
---------------
) ss:
COUNTY OF LOS ANGELES )
---------------
Before me, a Notary Public, in and for said County and State, on
this day personally appeared Scott A. LaPorta, the Executive Vice President
and Chief Financial Officer of Park Place Entertainment Corporation, known to
me as the person whose name is subscribed to the foregoing instrument.
Given under my hand and seal this 31st day of December, 1998.
/s/ SUSAN BIRD
[SEAL] ---------------------------------------
Notary Public
My Commission Expires: September 5, 2002
---------------------------------------
STATE OF CALIFORNIA )
---------------
) ss:
COUNTY OF LOS ANGELES )
---------------
Before me, a Notary Public, in and for said County and State, on this
day personally appeared Robert M. La Forgia, the Senior Vice President and
Controller of Conrad International Royalty Corporation, known to me as the
person whose name is subscribed to the foregoing instrument.
Given under my hand and seal this 31st day of December, 1998.
/s/ Yvonne Tang
---------------------------------------
Notary Public
My Commission Expires: April 12, 2002
---------------------------------------
[SEAL]