EX 10.27.3
First Amendment to Marketing/Administration Fund and Incentive Agreement
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For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Marketing/Administration Fund and Incentive Agreement,
dated December 23, 1998 (the "Marketing Agreement"), between Hilton Hotels
Corporation ("HHC") and CAIS, Inc. ("CAIS" ) is hereby amended as of this 23 day
of April, 1999, as follows:
1. The Marketing Agreement is amended by adding new Paragraph 1A as follows:
1A. Penetration Rate Incentive.
(i) A Penetration Rate Incentive Payment shall be paid to HHC during certain
years of the Term with respect to corporate owned or managed Hotels that
participate in the Services.
(ii) In the event the "Average Gross Revenue" (defined as (a) the gross Guest
Room Usage Fees from all Service-installed Guest Rooms at a participating
hotel divided by (b) the minimum number of Service-installed Guest Rooms at
such hotel, as defined in Paragraph 10(b) of the First Amendment to Master
License Agreement of even date herewith) at a participating corporate owned
or managed hotel exceeds $* during each such year, then HHC shall receive
as a Penetration Rate Incentive Payment, a percentage (shown in the chart
below by hotel property size) of Guest Room Usage Fees at such participating
hotel during the balance of each such year, until such time as the Average
Gross Revenue at such hotel exceeds $* per Service-installed Guest Room,
at which threshold the Penetration Rate Incentive Payment shown in
subparagraph 1(A)(iii) would instead apply.
Number of Guest Incent. Pmt. Incent. Pmt. Incent. Pmt.
Rooms Year 1 Year 2 Year 3
--------------------- ------------------ ------------------- ------------------
1,000 + *% *% *
--------------------- ------------------ ------------------- ------------------
500 - 999 *% *% *
--------------------- ------------------ ------------------- ------------------
300 - 499 *% *% *%
--------------------- ------------------ ------------------- ------------------
1 - 299 *% *% *%
--------------------- ------------------ ------------------- ------------------
(iii) In the event the Average Gross Revenue at a participating corporate
owned or managed hotel exceeds $* during each such year, then HHC shall
receive as a Penetration Rate Incentive Payment a percentage (shown in the
chart below by hotel property size) of Guest Room Usage Fees at such
participating hotel, during the balance of each such year until such time as
the Average Gross Revenue at such hotel exceeds $* per Service-installed
Guest Room, at which threshold the Penetration Rate Incentive Payment to HHC
would cease.
* Confidential Treatment Requested. The redacted material has been separately
filed with the Commission.
1
Number of Guest Incent. Pmt. Incent. Pmt. Incent. Pmt.
Rooms Year 1 Year 2 Year 3
--------------------- ------------------ ------------------- ------------------
1,000 + *% *% *
--------------------- ------------------ ------------------- ------------------
500 - 999 *% *% *
--------------------- ------------------ ------------------- ------------------
300 - 499 *% *% *%
--------------------- ------------------ ------------------- ------------------
1 - 299 *% *% *%
--------------------- ------------------ ------------------- ------------------
2. The Marketing Agreement is further amended by adding new Paragraph 2A as
follows:
2A. Penetration Rate Marketing Fund Incentive.
(i) A Penetration Rate Marketing Fund Incentive Contribution shall be
contributed by CAIS to the Account referred to in Paragraph 2 during certain
years of the Term with respect to those Hotels that are not corporate owned
or managed that participate in the Services.
(ii) In the event the Average Gross Revenue at a participating hotel that is
not corporate owned or managed exceeds $* during each such year, then CAIS
shall contribute to the Account as a Penetration Rate Marketing Fund
Incentive Contribution a percentage (shown in the chart below by hotel
property size) of Guest Room Usage Fees at such participating hotel during
the balance of each such year, until such time as the Average Gross Revenue
at such hotel exceeds $* per Service-installed Guest Room, at which threshold
the Penetration Rate Marketing Fund Incentive Contribution shown in
subparagraph 2(A)(iii) would instead apply.
Number of Guest Incent. Incent. Incent.
Rooms Contribution Contribution Contribution
Year 1 Year 2 Year 3
--------------------- ------------------ ------------------- ------------------
1,000 + *% *% *
--------------------- ------------------ ------------------- ------------------
500 - 999 *% *% *
--------------------- ------------------ ------------------- ------------------
300 - 499 *% *% *%
--------------------- ------------------ ------------------- ------------------
1 - 299 *% *% *%
--------------------- ------------------ ------------------- ------------------
(iii) In the event the Average Gross Revenue at a participating hotel that is
not corporate owned or managed exceeds $* during each such year, then CAIS
shall contribute to the Account as a Penetration Rate Marketing Fund
Incentive Contribution, a percentage (shown in the chart below by hotel
property size) of Guest Room Usage Fees at such participating hotel, during
the balance of each such year until such time as the Average Gross Revenue at
such hotel exceeds $* per Service-installed Guest Room, at which threshold
the Penetration Rate Marketing Fund Incentive Contribution to the Account by
CAIS would cease.
* Confidential Treatment Requested. The redacted material has been separately
filed with the Commission.
2
Number of Guest Incent. Incent. Incent.
Rooms Contribution Contribution Contribution
Year 1 Year 2 Year 3
--------------------- ------------------ ------------------- ------------------
1,000 + *% *% *
--------------------- ------------------ ------------------- ------------------
500 - 999 *% *% *
--------------------- ------------------ ------------------- ------------------
300 - 499 *% *% *%
--------------------- ------------------ ------------------- ------------------
1 - 299 *% *% *%
--------------------- ------------------ ------------------- ------------------
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the date first above written.
Hilton Hotels Corporation, CAIS, Inc.,
a Delaware corporation a Virginia corporation
By: /s/ Xxxxxx Xxxx By: /s/ Xxxxxxx X. Xxxxxxxx, XX
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Name: Xxxxxx Xxxx Name: Xxxxxxx X. Xxxxxxxx, XX
---------------------- ---------------------------
Title: SVP-HHC Title: President
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* Confidential Treatment Requested. The redacted material has been separately
filed with the Commission.
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