EXHIBIT 10.7
ASSIGNMENT AND LICENSE AGREEMENT
THIS AGREEMENT is made and entered into as of this ___ day of ____,
1998 by and among HILTON HOTELS CORPORATION, a Delaware corporation ("HILTON"),
XXXXXX INTERNATIONAL ROYALTY CORPORATION, a Nevada corporation ("CRC") and
GAMING CO., INC., a Delaware corporation ("GAMING CO."). 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 Gaming Co.'s common stock;
WHEREAS, in order to effect such separation, Hilton and Gaming Co.
have entered into that certain Distribution Agreement, dated [______], 1998 (the
"DISTRIBUTION AGREEMENT"), pursuant to which Hilton will contribute to Gaming
Co. 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 xxxx "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 "XXXXXX XXXX"), 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 Xxxxxx Xxxx is set forth in Schedule B hereto,
as such schedule may be modified from time to time;
WHEREAS, the name and xxxx "Xxxxxx," 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
"XXXXXX XXXX"), is owned by CRC, and is used primarily in the
Retained Business but is also used in the Gaming Business. The primary
Xxxxxx Xxxx 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 Gaming Co. and the Gaming Subsidiaries (as defined
below), and Gaming Co. 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 Xxxxxx Xxxx at certain properties;
WHEREAS, Hilton desires to license to the Gaming Co. Parties (as
defined below) the right to use the Xxxxxx Xxxx in connection with the operation
of certain casino hotels in the United States and the Gaming Co. Parties desire
to license the Xxxxxx Xxxx from Hilton, in accordance with the terms of this
Agreement; and
WHEREAS, CRC desires to license to the Gaming Co. Parties the right to
use the Xxxxxx Xxxx in connection with the operation of three casino hotels and
the Gaming Co. Parties desire to license the Xxxxxx Xxxx from CRC, in accordance
with the terms of this Agreement. The Xxxxxx Xxxx and the Xxxxxx Xxxx 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 Gaming Co. 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.
"XXXXXX INTERNATIONAL MANAGEMENT AGREEMENTS" shall mean the agreements
under which an affiliate of CRC manages the Xxxxxx Properties.
"XXXXXX LICENSE AGREEMENTS" has the meaning set forth in Section 2(a).
"XXXXXX XXXX" has the meaning set forth in the Recitals.
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"XXXXXX PROPERTIES" means Xxxxxx Jupiters, Gold Coast (Australia), Xxxxxx
International Treasury Casino, Brisbane (Australia) and Xxxxxx International
Punta del Este.
"DISTRIBUTION AGREEMENT" has the meaning set forth in the Recitals.
"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.
"GAMING CO." has the meaning set forth in the Preamble.
"GAMING CO. PARTIES" means Gaming Co. and the Gaming Subsidiaries, while
such Persons remain Subsidiaries of Gaming Co.
"GAMING CO. PARTY INDEMNITEE" has the meaning set forth in Section 8.
"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 Xxxx Xxxxxx, Las Vegas Hilton, Atlantic
City Hilton, Flamingo Xxxxxx - Xxxx, Flamingo Xxxxxx - Xxxxxxxx, and Flamingo
Hilton - Las Vegas.
"HILTON INDEMNITEES" has the meaning set forth in Section 8.
"XXXXXX XXXX" 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.
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"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. X. XXXXXX, ET AL.
(Civil Action Xx. 00 Xxx. 000 (XXX)) 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.
"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 Gaming Co. Party.
"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 Gaming Co. 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
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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 xxx 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 Gaming Co. as fully as 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 "XXXXXX LICENSE
AGREEMENTS") which license the Xxxxxx Xxxx for use with respect to the Xxxxxx
Properties (the rights described in clauses (i) through (ix) above are
collectively referred to herein as the "ASSIGNED RIGHTS").
(b) Gaming Co. 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 Gaming Co. under Section 2(a)(vii).
(c) Notwithstanding the grant to Gaming Co. of the CRC's rights
to receive license fees under the Xxxxxx License Agreements, pursuant to Section
2(a)(ix), CRC shall retain its ownership of the Xxxxxx Xxxx and title to the
Xxxxxx Xxxx shall not be assigned to Gaming Co. by virtue of this Agreement.
3. LICENSE. Hilton hereby grants to the Gaming Co. Parties a
non-exclusive right and license (the "HILTON LICENSE"), subject to the terms and
conditions set forth herein, to use the Xxxxxx Xxxx for five years following the
Distribution Date, except that the Hilton License shall be for 10 years with
respect to the Las Vegas Hilton and the Xxxx Xxxxxx (the "EXTENDED TERM"). CRC
hereby grants to the Gaming Co. Parties a non-exclusive right and license (the
"XXXXXX LICENSE"), subject to the terms and conditions set forth herein, to use
the Xxxxxx Xxxx for the duration of the Xxxxxx License Agreement applicable to
such Xxxxxx Property. The Hilton License and the Xxxxxx 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 Gaming Co. Parties shall use the Xxxxxx Xxxx 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 Gaming Co. Parties shall use the Xxxxxx Xxxxx solely in
connection with the operation of Xxxxxx Properties and in connection with the
advertising and promotion of the Xxxxxx Properties worldwide; and
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(c) the Licensed Marks may be used only in a manner consistent
with the use of such Licensed Xxxx during the year preceding this Agreement and,
without the prior written consent of the Licensor of such Licensed Xxxx, which
consent may be withheld at such Licensor's sole discretion, Gaming Co. 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 Gaming Co. Parties shall pay no royalty
fees for the right to use the Xxxxxx Xxxx for the first two years of the term
(the "INITIAL TERM") of the Hilton License. Thereafter, the Gaming Co. Parties
shall pay the Hilton Parties a royalty fee of 3% of the Net Room Revenues of
each hotel that is branded with the Xxxxxx Xxxx; PROVIDED, THAT, with respect to
the Las Vegas Hilton and the Xxxx Xxxxxx, the royalty fee shall be a fixed fee
of, in the aggregate, $5 million per year (the "YEARLY FEE"). The Gaming Co.
Parties shall pay no royalty fees for the right to use the Xxxxxx Xxxx for the
term of the Xxxxxx License.
(a) Notwithstanding the foregoing, so long as any Gaming Co.
Party shall license the Xxxxxx Xxxx, such Gaming Co. 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 Gaming Co. Party shall license the Xxxxxx
Xxxx, such Gaming Co. Party shall cause each of the Xxxxxx 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 Xxxxxx International Management Agreements.
(c) Subject to Section 27 hereof, during the term of this
Agreement and at Gaming Co.'s request and subject to the approval of Hilton and
its subsidiaries, the Gaming Co. 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
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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).
(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, Xxxxxx 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, Gaming Co. 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 Gaming Co., at Gaming
Co.'s expense, in recording appropriate assignment and other documents
evidencing Gaming Co.'s acquisition and ownership of the Assigned Rights. Hilton
agrees to take no action inconsistent with Gaming Co.'s ownership of and
interest in the Assigned Rights. Gaming Co. agrees to cooperate fully with the
Hilton Parties at Gaming Co.'s expense in recording appropriate documents
evidencing the License to the Gaming Co. Parties.
(c) No Hilton Party shall attack the validity of any of the
Assigned Rights, Gaming Co.'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) Gaming Co. acknowledges that Hilton is the exclusive owner
of the Xxxxxx Xxxx and CRC is the exclusive owner of the Xxxxxx Xxxx. Gaming
Co. agrees that no Gaming Co. Party has any right, title or interest in or to
any Licensed Xxxx, except as expressly set forth in Sections 2(a)(ix) and 3.
Gaming Co. agrees that all uses of any Licensed Xxxx by the Gaming Co. Parties
and third parties and the goodwill associated with such uses shall inure solely
to the benefit of the Licensor of such Licensed Xxxx. Upon termination of its
rights to use a Licensed Xxxx as provided in this Agreement, all right and
interest of such
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Gaming Co. Party in and to such Licensed Xxxx shall revert fully to the
Licensor of such Licensed Xxxx.
(e) Gaming Co. agrees, if requested by either Licensor, to
cooperate fully with such party in recording appropriate documents evidencing
such Licensor's ownership of a Licensed Xxxx. Gaming Co. agrees to take no
action inconsistent with either Licensor's ownership of and interest in its
Licensed Xxxx.
(f) No Gaming Co. Party shall attack the validity of either
Licensor's ownership of its Licensed Xxxx 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:
(a) in its use of any Licensed Xxxx, each Gaming Co. 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 Xxxx. No Gaming Co. Party shall modify the design,
coloration or appearance of a Licensed Xxxx unless requested to do so in writing
by the Licensor of such Licensed Xxxx;
(b) all uses of a Licensed Xxxx by any Gaming Co. 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 Gaming Co. Party
and shall be made in strict conformance with such reasonable specifications as
the Licensor of the Licensed Xxxx shall establish, as such specifications may be
modified by the applicable Licensor from time to time;
(c) all displays of a Licensed Xxxx by each Gaming Co. Party
shall bear such copyright, trademark, service xxxx and other notices as the
Licensor of such Licensed Xxxx shall reasonably require, and each Gaming Co.
Party shall adhere to any other reasonable and customary posting requirements
developed by the applicable Licensor with respect to such Licensed Xxxx;
(d) no Gaming Co. Party shall use a Licensed Xxxx as part of, or
display such Licensed Xxxx in conjunction with, any other names or marks except
with the Licensor of such Licensed Mark's prior written approval;
(e) no Gaming Co. Party shall use a Licensed Xxxx or any
confusingly similar or diluting xxxx, term or design, except as expressly
authorized in this Agreement, and no Gaming Co. Party shall attempt to register
or aid any third party in using or attempting to register any such xxxx, term or
design;
(f) no Gaming Co. Party shall use a Licensed Xxxx in any manner
that will indicate that it is using such Licensed Xxxx other than as a licensee;
and
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(g) no Gaming Co. 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 Gaming Co. 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 Gaming Co.
Parties under a Licensed Xxxx shall be provided substantially in accordance with
the quality standards of Gaming Co. 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.
(b) Each of Hilton and CRC shall have the right, at reasonable
times and with prior notice, to inspect any facility operated by any Gaming Co.
Party under a Licensed Xxxx, and any goods (including, without limitation, any
advertising and promotional materials used in connection with the Gaming
Business and Xxxxxx Properties) provided by any Gaming Co. Party that bear a
Licensed Xxxx, at any time for the purpose of determining whether they have met
or are meeting the quality standards required under this Agreement. Each Gaming
Co. Party shall promptly produce and deliver (at its own expense) to the
applicable Licensor such examples of its use of the Licensor's Licensed Xxxx as
such Licensor shall reasonably request.
8. LIMITATION OF LIABILITY; INDEMNITY.
(a) THE ASSIGNED RIGHTS AND THE LICENSED MARKS ARE PROVIDED TO
THE GAMING CO. 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 GAMING CO. PARTY OF THE
LICENSED MARKS, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION 8 AND SECTION
9 OF THIS AGREEMENT.
(b) Gaming Co. 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 Gaming Co. Party under a Licensed Xxxx, 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
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or obligations arising under any license agreement assigned to the Gaming Co.
Parties pursuant to Section 2 of this Agreement; PROVIDED, HOWEVER, that the
Gaming Co. 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 Xxxx is invalid,
unless such claim of invalidity arises from a Gaming Co. Party's failure to
comply with the terms of this Agreement.
(c) Hilton or CRC, as applicable, shall indemnify, defend and
hold harmless the Gaming Co. Parties and their respective past and present
employees, representatives, directors, officers and agents (each, a "GAMING CO.
PARTY INDEMNITEE"), from and against any and all Expenses resulting from any
claim asserted against any Gaming Co. Party Indemnitee by any third party
alleging that a Gaming Co. Party's use of a Licensed Xxxx infringes upon the
proprietary rights of such third party, PROVIDED that such claim arises from
such Gaming Co. Party's use of such Licensed Xxxx 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 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
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Distribution Agreement, those provisions that provide the greatest benefits
to the Indemnified Party shall control.
9. INFRINGEMENT PROCEEDINGS. Each Gaming Co. Party shall provide
Hilton or CRC, as applicable, with prompt written notice of (i) any unauthorized
uses by third parties of a Licensed Xxxx, or of confusingly similar or diluting
trademarks, service marks, trade names, terms or designs, which come to the
attention of such Gaming Co. Party and (ii) any action commenced or threatened
against such Gaming Co. Party in connection with its use of a Licensed Xxxx.
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 Xxxx or any confusingly similar or
diluting devices. The Gaming Co. Parties shall cooperate with and assist the
Licensors in their investigation and prosecution of any of the foregoing.
10. INJUNCTION. Each Gaming Co. Party agrees that if application is
made by Hilton or Hilton International CO to reinstate the Injunction, such
Gaming Co. Party shall not oppose or contest such application or take any other
action to interfere with the reinstatement of the Injunction. Each Gaming Co.
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 Gaming Co. 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 Gaming Co. Party may assign its
rights under this Agreement or sublicense its rights to use either Licensed Xxxx
to a third party without the prior written consent of the Licensor of such
Licensed Xxxx (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 Gaming Co. 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 Gaming Co. 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.
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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 Xxxxxx 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 Gaming Co. Parties shall be
required to use the Xxxxxx Xxxx at each of the Hilton Casino Hotels.
Thereafter, the Gaming Co. Parties may terminate use of the Xxxxxx Xxxx at any
Hilton Casino Hotel by giving the Hilton Parties at least six months' written
notice of the Gaming Co. Parties' decision to terminate use of the Xxxxxx Xxxx;
PROVIDED, HOWEVER, that with respect to the Las Vegas Hilton and the Xxxx
Xxxxxx, the Gaming Co. Parties shall be required to use the Xxxxxx Xxxx for the
Extended Term, except the Gaming Co. Parties may terminate use of the Xxxxxx
Xxxx if: (i) the Las Vegas Hilton and the Xxxx Xxxxxx are sold by the Gaming Co.
Parties and the Gaming Co. 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 Gaming Co. Parties provide the Hilton Parties with at least six
months' written notice of the Gaming Co. Parties' decision to terminate use of
the Xxxxxx Xxxx with respect to the Las Vegas Hilton and the Xxxx Xxxxxx and the
Gaming Co. 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 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 Gaming Co.
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),
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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 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 Gaming
Co. In addition, it is understood and
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agreed that Gaming Co. 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. Gaming Co. may specifically waive any breach of this
Agreement by the Hilton Parties and Hilton may waive any breach of this
Agreement by a Gaming Co. Party; 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
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attn.: General Counsel
Telecopy: (000) 000-0000
If to CRC:
[______________]
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If to one or more of the Gaming Co. Parties:
Gaming Co., Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx, 0xx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attn.: General Counsel
Fax: (000) 000-0000
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 GAMING CO. MARKETS. Hilton shall give
Gaming Co. 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 Xxxxxx Xxxx or the Xxxxxx Xxxx within any Gaming Co. market. If the Gaming
Co. Party operating in such Gaming Co. market provides Hilton, within 30 days of
receipt of such Notice of Entry, of its agreement to cease using the Xxxxxx Xxxx
or Xxxxxx Xxxx, 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 Gaming Co. Party from Hilton Reservations Worldwide and the HHonors
Program within six months of Hilton's receipt of such Notice of Withdrawal.
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 Gaming Co. shall take all such actions as
are necessary to ensure compliance with the terms of this Agreement by the
Gaming Co. Parties other than Gaming Co.
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]
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IN WITNESS WHEREOF, a duly authorized representative of each party has
executed this Agreement as of the date first written above.
HILTON HOTELS CORPORATION
By:
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Its:
--------------------------------
GAMING CO., INC.
By:
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Its:
--------------------------------
XXXXXX INTERNATIONAL ROYALTY CORPORATION
By:
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Its:
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