Exhibit 10.2

 

LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT (this “Agreement”) is made and entered into as of this
18th day of June, 2004, by and between HILTON INNS, INC., a Delaware corporation
(“Hilton”), and COLONY RESORTS LVH ACQUISITIONS, L.L.C., a Nevada limited
liability company (“Resorts”).

 

RECITALS

 

WHEREAS, Resorts has executed an agreement to acquire (the “Purchase”) the Las
Vegas Hilton (the “Project”), a mixed-use property that includes traditional
hotel operations (the “Hotel”) as well as all gaming, restaurant and non-food
and beverage retail and entertainment operations (collectively, the “Non-Hotel
Operations”), from Caesar’s Entertainment, Inc., f/k/a Park Place Entertainment
Corporation (“Caesar’s”); and

 

WHEREAS, a material condition to such Purchase is that Resorts enter into this
Agreement with Hilton; and

 

WHEREAS, until the Purchase is consummated, Caesar’s has operated and will
operate the Project under the Existing License Agreement (defined below); and

 

WHEREAS, immediately upon the Purchase, Resorts intends to continue to operate
the Project as the Las Vegas Hilton, a Resorts International Destination, and to
obtain other services, all as further provided in this Agreement; and

 

WHEREAS, as provided herein, 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, are owned by Hilton or its affiliates in the
United States and are used in the grant of licenses to others to operate full
service hotels in the United States (the “Hilton Marks”) and their marketing
throughout the world. The primary Hilton Marks are set forth in Schedule A
hereto, as such schedule may be modified from time to time; and

 

WHEREAS, Hilton desires to license to Resorts the right to use the Hilton Marks
in connection with the operation of the Project, in accordance with the terms of
this Agreement and to satisfy the condition to the Purchase; and

 

WHEREAS, the parties desire that the Project will participate in Hilton
Reservations Worldwide and HHonors Program (as such terms are defined below) and
have the other rights provided herein;

 

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, Hilton and Resorts agree as follows:

 

1.) Definitions. As used herein, the following terms have the meanings set forth
below:

 

“Advertising Campaign” shall mean an advertising campaign adopted by Resorts
with respect to the promotion of the Hotel and/or the Project (including without
limitation the “look and feel” of the campaign, the manner in which their
products and services are promoted, and the slogans and the general nature and
appearance of the campaign).

 

“Annual Royalty Fee(s)” has the meaning set forth in Section 6.

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“Approved Advertising Campaign” means the specific Advertising Campaign
represented by the materials attached as Exhibit A, or any Advertising Campaign
subsequently approved as provided herein.

 

“Caesar’s” has the meaning set forth in the Recitals.

 

“De-Identification Actions” has the meaning set forth in Section 14.

 

“Effective Date” means the date on which the Purchase is consummated.

 

“Existing License Agreement” means that certain Assignment and License Agreement
dated December 31, 1998 by and among Hilton Hotels Corporation, Conrad
International Royalty Corporation and Caesar’s.

 

“Existing Sales Agreement” means that certain Sales Agreement dated January 1,
2000, between Hilton Hotels Corporation and Caesar’s.

 

“Expenses” has the meaning set forth in Section 10.

 

“Force Majeure” shall mean and be limited to the following to the extent the
same can not be overcome with due diligence and reasonable expense by the party
claiming Force Majeure: (i) war, invasion, rebellion, insurrection, riots,
terrorism or civil war; (ii) acts of government in its sovereign capacity; (iii)
hurricanes, earthquakes, fire or other casualty, acts of God or any operation of
the forces of nature as reasonable foresight and ability on the part of the
affected party could not reasonably provide against; (iv) strikes, lockouts or
other significant employee disturbances; and (v) any other similar events which
are beyond the reasonable control of the affected party to prevent or overcome.
In no event shall Force Majeure include any inability of a party to perform any
of its obligations under this Agreement solely by reason of lack on its part of
sufficient funds required for the performance of such obligation.

 

“Gross Rooms Revenue” means the total room revenues derived from the sale or
rental of Guest Rooms (both transient and permanent) of the Hotel, excluding
revenue attributable to complimentary rooms or, to the extent permitted under
this Agreement, in-room gaming, all to be calculated on a basis consistent with
the calculation of “Net Room Revenues” under the Existing License Agreement.

 

“HHonors Program” means the frequent guest program operated by Hilton HHonors
Worldwide, L.L.C., a Subsidiary of Hilton, which allows members to earn point
credits redeemable for various travel related rewards.

 

“HHonors Terms” means the terms and conditions applicable to Other Hilton
Licensees participating in the HHonors Program, as such terms and conditions may
be modified from time to time by Hilton HHonors Worldwide, L.L.C.

 

“Hilton” has the meaning set forth in the Preamble.

 

“Hilton Booking Report” has the meaning set forth in clause (b) of Section 9A.

 

“Hilton Control Entities” means any entity controlling Hilton, controlled by
Hilton, or under common control with Hilton.

 

“Hilton Entities” means Hilton and its subsidiaries and affiliated entities.

 

“Hilton Indemnitees” means Hilton, the Hilton Entities, the successors and
assigns of Hilton and the Hilton Entities, and the members, officers, directors,
employees, agents, and their representatives, heirs, predecessors, successors
and assigns.

 

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“Hilton Lead Report” has the meaning set forth in clause (a) of Section 9A.

 

“Hilton License” has the meaning set forth in Section 2.

 

“Hilton Marks” has the meaning set forth in the Recitals.

 

“Hilton Proprietary Information” means all methods, techniques, plans,
specifications, procedures, information, systems and knowledge of and experience
of Hilton or the Hilton Entities in the development, operation, marketing and
licensing of the Hilton System.

 

“Hilton Reservations Worldwide” means the central reservation system operated by
Hilton Reservations Worldwide, L.L.C., a Subsidiary of Hilton, which provides
reservation services to other licensees operating under the Hilton Marks,
including any additions, enhancements, supplements or variances which Hilton or
the Hilton Entities develop or adopt.

 

“Hilton System” means the elements Hilton designates from time to time to
identify hotels operating under the Hilton Marks that provide to the consuming
public a similar, distinctive, high quality hotel service. The Hilton System
includes, but not by limitation, the Hilton Marks; Hilton Reservations
Worldwide; advertising, publicity and other marketing programs and materials;
standards, specifications and policies for construction, furnishing, operation,
appearance and service of hotels; the HHonors Program; and such other components
and programs Hilton or the Hilton Entities may develop in the future and
designate as part of the Hilton System. All parties specifically acknowledge
that Hilton may add elements to the Hilton System or modify, alter or delete
elements of the Hilton System at its sole discretion, but Resorts’ obligation to
implement such modifications, alterations or deletions shall be subject to the
terms of this Agreement.

 

“Hotel” has the meaning set forth in the Recitals. The Hotel includes all
structures, facilities, appurtenances, furniture, fixtures, equipment, and
entry, exit, parking and other areas located on the site of the Hotel, or
located on any land Hilton approves in the future for additions, signs, parking
or other facilities for the Hotel (but including as approved by Hilton any land
that is currently included in the Purchase). The Hotel does not include any of
the Non-Hotel Operations.

 

“Indemnified Party(ies)” means the party or parties to be indemnified under
Section 10.

 

“Indemnitor” means any party obligated to indemnify an Indemnified Party under
Section 10.

 

“Information” has the meaning set forth in Section 9.

 

“Lender Comfort Letter” has the meaning set forth in clause (r) of Section 15.

 

“License Term” means the term of this Agreement which, if not terminated earlier
in accordance with its terms, shall begin on the Effective Date and continue
until December 31, 2008.

 

“Licensee,” with respect to the Resorts Marks, means Hilton, and with respect to
the Hilton Marks, means Resorts.

 

“Licenses” means the Hilton License and the Resorts License set forth in
Sections 2 and 3.

 

“Licensed Marks” means the Hilton Marks and the Resorts Marks.

 

“Licensor” means the owner of the applicable Licensed Marks, as licensor
hereunder.

 

“Linked Sites” has the meaning set forth in Section 7.

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“Non-Hotel Operations” has the meaning set forth in the Recitals.

 

“Other Hilton Licensees” shall mean persons other than Resorts to whom Hilton
has licensed the Hilton Marks to operate full service hotels in the United
States.

 

“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 clause (c) of Section 10.

 

“Project” has the meaning set forth in the Recitals.

 

“Purchase” has the meaning set forth in the Recitals.

 

“Renovation Plan” has the meaning set forth in clause (c) of Section 4.

 

“Reservation Systems” has the meaning set forth in clause (a) of Section 5.

 

“Resorts” has the meaning set forth in the Preamble.

 

“Resorts Entities” means Resorts and its subsidiaries and affiliated entities.

 

“Resorts Indemnitees” means Resorts, the Resorts Entities, the successors and
assigns of Resorts and the Resorts Entities, and the members, officers,
directors, employees, agents, and their representatives, heirs, predecessors,
successors and assigns.

 

“Resorts License” has the meaning set forth in Section 3.

 

“Resorts Marks” means the name and mark “Resorts”, 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, as used by Resorts primarily in traditional
gaming and related hotel businesses. The primary Resorts Marks are set forth in
Schedule B hereto, as such schedule may be modified from time to time.

 

“Restricted Area” means the area encompassed within a radius of three miles of
the Hotel, measured from the door of the Hotel the majority of guests arriving
by vehicle would enter as of the date of this Agreement if they were arriving at
the Hotel as overnight guests.

 

“Sales Services” has the meaning set forth in clause (a) of Section 5.

 

“Site(s)” has the meaning set forth in Section 7.

 

“Specially Designated National or Block Person” has the meaning set forth in
Section 15.

 

“Subsidiary” means, 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.

 

“Termination Fee” means, as of any calculation date, the present value
(discounted at a quarterly rate of 1.5% from the date each payment was due to
the date of payment) of an amount equal to (x) the

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amount of all Annual Royalty Fees payable to Hilton pursuant to this Agreement
from such calculation date and until the expiration of this Agreement in
accordance with its terms (using, solely for purposes of this calculation, a
notional Annual Royalty Fee of $2,500,000 per year), less (y) the portion of the
actual Annual Royalty Fee paid for the current quarter in which such termination
occurs that is attributable to the period from such calculation date until the
expiration of such quarter.

 

“Trade Name” has the meaning set forth in clause (c) of Section 2.

 

“1% Fee(s)” has the meaning set forth in Section 6.

 

2.) Hilton License. Hilton hereby grants to Resorts, and Resorts hereby accepts,
a non-exclusive right and license (the “Hilton License”), subject to the terms
and conditions set forth herein, to use the Hilton Marks in the promotion and
operation of the Project for the License Term. Hilton acknowledges that Resorts
may grant to any of the Resorts Entities the license it has hereunder, for the
License Term and subject to all terms and conditions in this Agreement, to use
the Hilton Marks to the extent that those entities are involved in advertising
and promoting the Project.

 

(a) Hilton Restrictions. Notwithstanding the non-exclusive nature of the Hilton
License, during the License Term: (1) the Hilton Control Entities (or any
surviving entity of any merger, acquisition, consolidation or other business
combination between such Hilton entity and any other entity) shall not own,
manage or operate, or authorize, franchise or license any other person to own,
manage or operate, any other hotel, inn, conference center, lodging facility or
similar business within the Restricted Area, which operates as a “Hilton®”
branded full-service facility; (2) prior to the second anniversary of this
Agreement, there shall be no gaming activities at the contemplated Conrad hotel
located at the former site of the La Concha Motel; (3) the Hilton Control
Entities (or any surviving entity of any merger, acquisition, consolidation or
other business combination between such Hilton entity and any other entity)
shall not own, manage or operate, or authorize, franchise or license any other
person to own, manage or operate, any facilities within the Restricted Area
having both more than 500 guest rooms and more than (x) 10,000 square feet of
contiguous floor space devoted solely to gaming activities or (y) 20,000 square
feet of non-contiguous floor space devoted solely to gaming activities; (4)
within the Restricted Area, there shall be no gaming at any new or existing
Hilton Grand Vacations Club facility (or equivalent timeshare operation other
than incidental slot machines, pull tabs or similar games of chance (such as
slot machines in a bar or waiting area) and in-room gaming; and (5) within the
Restricted Area, a Hilton Grand Vacations Club facility (or equivalent timeshare
operation) may not be adjacent to, or part of (as a separate floor, wing or
otherwise), any facility that has gaming unless: (x) the number of rooms
constituting such Hilton Grand Vacations Club facility (or equivalent timeshare
operation) is not more than the number of other rooms at such adjacent facility;
(y) during the two years immediately following the Effective Date, the entrance
to such Hilton Grand Vacations Club facility (or equivalent timeshare operation)
is separate and distinct from, and does not require passage through, such other
facility’s gaming operations or the entrance thereto; and (z) such facility that
includes gaming is not a “Hilton®” branded facility or otherwise uses the Hilton
Marks.

 

  (i) The restriction in clause (3) above shall not prohibit any existing
arrangement with any facility open and operating as of the Effective Date owned
and/or managed by any Hilton Entity or Caesar’s, and the adding of the Caesar’s
Palace to the Existing License Agreement and/or the Existing Sales Agreement by
any amendment to such agreements.

 

  (ii) These restrictions shall only apply to facilities that are open for
business during the License Term (as opposed to the announcement or construction
of a facility that will open for business following expiration or termination of
this Agreement).

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  (iii) Resorts acknowledges that the Hilton Entities own, operate and license
other branded facilities in other market segments that may incorporate the name
“Hilton®” such as “Hilton Garden Inn®,” “Hilton Suites®,” “Homewood
Suites—Hilton®,” and “Hilton Grand Vacations Club” as well as facilities in
other market segments that do not incorporate the name “Hilton®” such as
“Embassy Suites®,” and “Hampton®,” and certain full service facilities that may
operate within the same market segment, but do not use the name “Hilton,®” such
as “Doubletree®” and “Conrad®.” These other facilities are not considered
Hilton® branded full-service facilities and the restrictions set forth in clause
(1) of the opening paragraph to this Section 2(a) shall not limit the ability of
the Hilton Entities to own, license, manage or operate these other facilities,
either within the Restricted Area, or outside the Restricted Area, subject to
compliance with clauses (3), (4) and (5) of the first paragraph herein.

 

Notwithstanding anything in this Agreement to the contrary: (1) in the event the
Hilton Entities (or any surviving entity of any merger, acquisition,
consolidation or other business combination between Hilton and any other entity)
are not in compliance with the provisions of this Section 2(a) on or prior to
the second anniversary of the Effective Date and do not cure such non-compliance
within 30 days following the provision of notice of default to Hilton, Resorts
may elect to terminate this Agreement with no liability to Hilton for the
Termination Fee or other fees Hilton would have received under Section 6 through
the expiration of this Agreement and shall have, in addition, any other remedies
under this Agreement or by law with respect to such or any other breach; and (2)
in the event the Hilton Entities (or any surviving entity of any merger,
acquisition, consolidation or other business combination between Hilton and any
other entity) are not in compliance with the provisions of this Section 2(a)
after the second anniversary of the Effective Date and do not cure such
non-compliance within 30 days following the provision of notice of default to
Hilton, Resorts’ sole remedy with respect to such non-compliance shall be to
terminate this Agreement with no liability to Hilton for the Termination Fee or
other fees Hilton would have received under Section 6 through the expiration of
this Agreement. For the avoidance of doubt, the conduct of gaming activities at
the contemplated Conrad hotel referenced in Section 2(a)(2) above after the
second anniversary of the Effective Date will not violate the requirements of
such Section 2(a)(2), but will remain subject to the remaining provisions of
this Section 2(a).

 

(b) Limitation of Restrictions. Except as set forth in clause (a) of this
Section 2, this Agreement does not limit the right of any of the Hilton Entities
to own, license, manage or operate any other businesses, whether or not
competitive with the Hotel. The right of the Hilton Entities to engage in such
other businesses is without reference to whether the Hilton Entities start those
businesses, or purchase, merge with, acquire, are acquired by, or affiliate
with, such businesses. Resorts acknowledges and agrees that such activities, in
and of themselves, will not give rise to any liability on the part of Hilton or
any of the Hilton Entities, including liability for claims for unfair
competition, breach of contract, breach of any applicable implied covenant of
good faith and fair dealing, or divided loyalty.

 

(c) Trade Name of Hotel. Subject to clause (d) of Section 4, the Project (and
the Hotel) will be known by the trade name, “Las Vegas Hilton”, a Resorts
International Destination (the “Trade Name”). Resorts may not change the Trade
Name without Hilton’s specific written consent, which consent shall not be
unreasonably withheld. Resorts acknowledges and agrees that Resorts is not
acquiring the right to use any service marks, copyrights, trademarks, logos,
designs, insignia, emblems, symbols, slogans, distinguishing characteristics,
trade names, domain names or other marks or characteristics owned by Hilton or
the Hilton Entities that Hilton does not specifically designate to be used in
connection with the operation of the Project.

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3.) Resorts License. In the event that Resorts elects to include the Resorts
Marks as part of the Trade Name or otherwise to associate the Resorts Marks with
the Project, Resorts hereby grants to Hilton, and Hilton accepts, a
non-exclusive right and license (the “Resorts License”), subject to the terms
and conditions set forth herein, to use such of the Resorts Marks as are so
designated or used from the first date of such use through the expiration or
termination of this Agreement in the advertising and promotion of the Project.
Resorts acknowledges that Hilton may grant to any of the Hilton Entities the
license it has hereunder, for the License Term and subject to all terms and
conditions in this Agreement, to use the Resorts Marks to the extent that those
entities are involved in advertising and promoting the Project. Nothing
contained in this grant shall limit the right of any of the Resorts Entities to
own, license, manage or operate other businesses under the Resorts Marks or any
other marks, whether or not competitive with the Project. The right of the
Resorts Entities to engage in such other businesses is without reference to
whether the Resorts Entities start those businesses, or purchase, merge with,
acquire, are acquired by, or affiliate with, such businesses. Hilton
acknowledges and agrees that such activities, in and of themselves, will not
give rise to any liability on the part of Resorts or any of the Resorts
Entities, including liability for claims for unfair competition, breach of
contract, breach of any applicable implied covenant of good faith and fair
dealing, or divided loyalty.

 

4.) Use of Licensed Marks. The Licensed Marks shall be used only in accordance
with the following provisions:

 

(a) Resorts shall use the Hilton Marks solely in connection with the operation
of the Project and in connection with the advertising and promotion of the
Project worldwide in the same manner as authorized for Other Hilton Licensees,
but subject to clause (d) of this Section 4;

 

(b) Hilton shall use the Resorts Marks to the extent licensed hereunder solely
in connection with the advertising and promotion of the Project worldwide,
including the operation of the Hilton Reservations Worldwide and HHonors Program
(with respect only to the Hotel and to the extent Hilton deems appropriate, the
Project); and

 

(c) The Licensed Marks may be used by the Licensee thereof on the products and
services and in a manner consistent with the use of such Licensed Mark during
the year preceding the Effective Date. Without the prior written consent of
Hilton, which consent may be withheld at Hilton’s sole discretion, Resorts shall
not expand its business or operations to include use of any of the Hilton Marks
on products or services beyond those products or services in use by Caesar’s on
the Effective Date, other than those resulting from the renovations and changes
contemplated by Resorts to be made to the Hotel and the Project (more fully
described on Schedule C hereto) (the “Renovation Plan”) and except as set forth
in clause (d) of Section 4.

 

(d) Notwithstanding anything herein to the contrary, Hilton acknowledges and
agrees that during the term hereof Resorts plans to put signage on the Project
indicating that the Project (including without limitation the Hotel) is a
Resorts International Destination and to advertise, market and promote the Hotel
and the Project worldwide using the Hilton Marks in conjunction with the Resorts
Marks. Resorts agrees, however, that the Hilton® name shall always be the most
prominent name in the Trade Name, and shall be more prominent than any other
names used in the Trade Name on all signage, interior and exterior, within the
Project.

 

5.) Hilton Provided Services.

 

(a) Reservation Services. Hilton will, directly or indirectly, furnish Resorts
with the use and benefits of Hilton Reservations Worldwide to the same extent
and on the same terms as it provides to Other Hilton Licensees. Resorts will
honor all confirmed reservations referred to the Hotel through Hilton
Reservations Worldwide, and honor the room rate quoted to a guest at the time
the guest makes a reservation through Hilton Reservations Worldwide. Resorts
shall use

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and maintain, at its sole cost, any computer equipment and other hardware and
software and related systems (“Reservation Systems”) that are acquired from
Caesar’s as part of the Purchase in connection with the use of Hilton
Reservations Worldwide. Hilton may not require Resorts to use other Reservation
Systems on or prior to the second anniversary of the Effective Date. If at any
time after the second anniversary date of the Effective Date Hilton seeks to
require, consistent with its requirements for Other Hilton Licensees, the use of
other Reservation Systems, Resorts may, at its election, either: (x) purchase
and use such Reservation Systems at its sole cost; or (y) terminate this
Agreement and pay the Termination Fee, which shall be Hilton’s sole remedy for
such termination.

 

(b) HHonors Program. Hilton shall provide to Resorts the benefits of the HHonors
Program to the same extent as it provides to Other Hilton Licensees. Resorts
shall cause the Hotel to participate in, and pay, all charges related to the
HHonors Program, and all other guest frequency programs Hilton offers to hotels
using the Hilton Marks in accordance with the terms of the HHonors Program,
provided that so long as any full service gaming hotel owned or managed by
Caesar’s in Las Vegas, Nevada participates in the HHonors Program, the Hotel’s
placement in the program shall be in the same category as those hotels, it being
recognized that properties within a particular category may have different fees
and reimbursements based on their average daily rates, occupancy levels, number
of rooms and other factors deemed appropriate to Hilton and its affiliates in
their sole discretion. Resorts shall honor the terms of any discount or
promotional programs (including any frequent guest program) that Hilton offers
to the public on Resorts’ behalf, and any award guest certificates issued to
Hotel guests participating in these programs, all in accordance with the terms
of the HHonors Program.

 

(c) Sales Services. Hilton will, with no additional fees other than those
described in Section 6, directly or indirectly, furnish Resorts with the
following “Sales Services”: (i) representation and lead referrals to the Hotel
(1) on the same basis as Hilton Entities do for Other Hilton Licensees and (2)
on an equitable basis (as to allocation and pursuit of such referrals)consistent
with past practice under the Existing License Agreement and/or the Existing
Sales Agreement or otherwise regarding treatment of the Project prior to the
Effective Date vis-à-vis other gaming properties managed and/or owned by
Caesar’s (including the Caesar’s Palace, as the same may be added (and that
Resorts acknowledges may be added for all Sales Services)to the Existing License
Agreement and/or the Existing Sales Agreement or any amendment or replacement to
such agreements); (ii) access to the Hilton global SFA customer data base on the
same basis as Other Hilton Licensees and, with respect to any gaming properties
managed and/or owned by Caesar’s, on the same equitable basis as exists prior to
the Effective Date; (iii) annual local negotiated rate solicitation to the
extent provided to the Other Hilton Licensees and/or gaming properties managed
and/or owned by Caesar’s; (iv) travel agent and tour operator programs if and to
the extent provided to the Other Hilton Licensees and/or gaming properties
managed and/or owned by Caesar’s; (v) continuation of the “Focus on Las Vegas”
sales specialist program as long as such program is offered; (vi) participation,
at Resorts’ election, in ROVER (Hilton’s hotel-to-hotel referral program); and
participation, at Resorts election, in Group Opportunity (GO, or, if replaced,
any alternative Hilton program for distressed hotels or those hotels with
seasonal needs); and (vii) inclusion of the Hotel in the group of hotels offered
to provide a request for proposal for any Hilton sales events that include Las
Vegas.

 

(d) Arrangements for Marketing, Etc. Periodically, Hilton or one of the Hilton
Entities will publish and make available to the traveling public a directory of
hotels using the Hilton Marks, including the Project. Additionally, Hilton will
include the Project, or cause the Project to be included in (i) national or
regional group advertising of hotels using the Hilton Marks, and (ii)
international, national and regional marketing programs offered by the Hilton
Entities; each of which shall be subject to and in accordance with the general
practice of Hilton with respect to and in a manner that is equitably comparable
to its treatment of, the Other Hilton Licensees.

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(e) Legal Limitations. Notwithstanding anything to the contrary in this Section
5, neither Hilton nor the Hilton Entities shall provide any reservation, sales
or other services to the Hotel, or permit the Hotel to participate in Hilton
Reservations Worldwide or the HHonors Program, if the provision of such services
or participation violate applicable law.

 

6.) Fees.

 

(a) Annual Fees. Resorts will pay to Hilton an annual royalty fee of $2,000,000
(the “Annual Royalty Fee(s)”). The Annual Royalty Fees shall be payable in equal
quarterly installments of $500,000, on the first day of each quarter during the
License Term; provided, however, that the fee for the first partial quarter of
this Agreement shall be prorated and payable on the Effective Date.

 

(b) 1% Fees. Resorts will pay to Hilton for each quarter (or part of a quarter,
including the final quarter Resorts operates under this Agreement), a national
and regional group advertising and sales and business promotion fee in the
amount of 1% of the Hotel’s Gross Rooms Revenue for the preceding calendar
quarter (the “1% Fee(s)”). This fee will be determined in accordance with the
accounting methods of then-current Uniform System of Accounts for Lodging
Industry (currently, the Ninth Revised Edition, 1996), or such other accounting
methods as may otherwise be specified by Hilton from time to time for Other
Hilton Licensees. The fee allocable to each calendar quarter will be paid to
Hilton at the place Hilton designates on or before the 15th day of the month
immediately following the expiration of each quarter with respect to Gross Rooms
Revenue received by Resorts the preceding quarter. There will be an annual
adjustment within 90 days after the end of each operating year so that the total
1% Fees paid annually will be the same as the amount determined by Resorts’
audit.

 

Hilton will use the 1% Fee to pay for various programs to benefit hotels using
the Hilton Marks, including (i) advertising, promotion, publicity, public
relations, market research, and other marketing programs; (ii) developing and
maintaining directories and Internet sites for facilities using the Hilton
Marks; (iii) developing and maintaining Hilton Reservations Worldwide systems
and support; and (iv) administrative costs and overhead related to the
administration or direction of these projects and programs. Hilton will have the
sole right to determine how it spends these funds, including sole control over
the creative concepts, materials and media used in the programs, and the
placement and allocation of advertising. Hilton may enter into arrangements for
development, marketing, operations, administrative, technical and support
functions, facilities, programs, services and/or personnel with any other
entity, including other Hilton Entities. Resorts acknowledges that 1% Fees are
intended for the benefit of all hotels using the Hilton Marks, and will not
simply be used to promote or benefit the Hotel. Hilton will have no obligation
in administering any activities paid by the 1% Fee to make expenditures for
Resorts which are equivalent or proportionate to Resorts’ payments, or to ensure
that the Hotel benefits directly or proportionately from such expenditures.
Hilton may create any programs and allocate monies derived from 1% Fees to any
regions or localities, as Hilton considers appropriate in Hilton’s sole
judgment. The aggregate of all 1% Fees paid to Hilton by hotels using the Hilton
Marks (which Resorts acknowledges are frequently referred to as “Monthly Program
Fees,” or by other names in Hilton’s agreements with other licensees) does not
constitute a trust or “advertising fund” and Hilton is not a fiduciary with
respect to the 1% Fees paid by Resorts. Hilton is not obligated to spend funds
for any of the foregoing in excess of the amounts received for such purposes
from hotels using the Hilton Marks. If any interest is earned on unused 1% Fees,
Hilton will use the interest before using the principal. The 1% Fee does not
cover Resorts’ costs of participating in any optional marketing programs and
promotions offered by Hilton from time to time in which Resorts voluntarily
chooses to participate, provided that nothing herein is intended to imply any
obligation of Resorts to participate in any such program. Notwithstanding the
above, Hilton covenants that the administration of the 1% Fee shall be subject
to and in accordance with the

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general practice of Hilton with respect to its use of national and regional
group advertising and sales and business promotion fees received from Other
Hilton Licensees.

 

(c) Payment of Fees. Hilton reserves the right to require Resorts to transmit
the Annual Royalty Fee and the 1% Fee and all other payments required under this
Agreement by wire transfer or other forms of electronic funds transfer. Under no
circumstances shall Resorts have the right to claim on offset or setoff against
Hilton that would permit Resorts to withhold, escrow or delay payment of any
fees owing to Hilton under this Agreement.

 

(d) Application of Fees. Hilton may apply any payments received under this
Section 6 to any amounts due under this Agreement. If any amounts are not paid
when due under this Section 6 or any other section herein, such nonpayment will
constitute a material breach of this Agreement and, in addition, such unpaid
amounts will accrue a service charge beginning on the first day of the month
following the due date of such payment, at the rate of 1% per month or the
maximum amount permitted by applicable law, whichever is less. Should Hilton
hire counsel to collect any amounts properly due and not paid when due under
this Agreement, including any service charges, Resorts will pay Hilton’s
reasonable attorneys’ fees.

 

7 .) Representations and Limitations on Use of Marks.

 

(a) Representations Regarding Hilton Marks. Hilton represents that one of the
Hilton Control Entities is the owner of the Hilton Marks, and that Hilton has
the right (x) to grant a license to Resorts to use the Hilton Marks as set forth
in this Agreement and (y) to grant Resorts the other rights provided in this
Agreement. Resorts acknowledges, and will not contest, either directly or
indirectly, during the License Term or after termination or expiration of this
Agreement: (i) Hilton’s (and/or any of the Hilton Control Entities’) ownership
of, rights to, or interest in the Hilton Marks, and the Hilton System, or any of
their element(s) or component(s), including present and future distinguishing
characteristics; (ii) Hilton’s (and/or any of the Hilton Control Entities’) sole
right to grant licenses to use all or any element(s) or component(s) of the
Hilton Marks or the Hilton System; (iii) that Hilton (and/or the Hilton Control
Entities) is the owner of all right, title and interest in and to the Hilton
Marks and the Hilton System used in any form and in any design, alone or in any
combination, together with the goodwill they symbolize; or (iv) the validity or
ownership of the Hilton Marks. Resorts acknowledges that the Hilton Marks have
acquired a secondary meaning which indicates that the Hotel is operated by or
with Hilton’s approval and subject to Hilton’s quality control standards. All
improvements, additions and goodwill to the Hilton System or arising from
Resorts’ use of the Hilton Marks will inure to Hilton’s benefit and become
Hilton’s property (or the property of the Hilton Control Entities), even if
Resorts develops such additions or improvements, provided, however, that the
Hilton Entities will not acquire any interest in the Resorts Marks. Resorts
agrees that it will not take any action to register any of the Hilton Marks, or
any name or marks similar thereto. Resorts acknowledges that Resorts is not
entitled to receive any payment or other value from Hilton or any of the Hilton
Entities for any goodwill associated with Resorts’ use of the Hilton System or
the Hilton Marks, or any element(s) or component(s) thereof. Resorts agrees to
take no action inconsistent with either Hilton’s or the Hilton Control Entities’
ownership of and interest in the Hilton Marks and the Hilton System.

 

(b) Representations Regarding Resorts Marks. Upon electing to license a Resorts
Mark hereunder, Resorts will be deemed to represent that one of the Resorts
Entities is the owner of such Resorts Mark, and that Resorts has the right to
grant a license to Hilton a license to use such Resorts Mark as set forth in
this Agreement. Hilton acknowledges, and will not contest, either directly or
indirectly, during the License Term or after termination or expiration of this
Agreement: (i) Resorts’ (and/or any of the Resorts Entities’) ownership of,
rights to, or interest in the Resorts Marks; (ii) Resorts’ (and/or any of the
Resorts Entities’) sole right to grant licenses

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to use all or any of the Resorts Marks; (iii) that Resorts (and/or the Resorts
Entities) is the owner of all right, title and interest in and to the Resorts
Marks, used in any form and in any design, alone or in any combination, together
with the goodwill they symbolize; or (iv) the validity and ownership of the
Resorts Marks. Hilton acknowledges that the Resorts Marks have acquired a
secondary meaning which indicates that the properties associated therewith are
operated by or with the approval of Resorts or the Resorts Entities and subject
to Resorts’ (or any of the Resorts Entities’) quality control standards. All
improvements, additions and goodwill arising from the use of the Resorts Marks
by Hilton or the Hilton Entities will inure to Resorts’ benefits and become
Resorts’ property (or the property of the Resorts Entities), even if Hilton or
any Hilton Entity develops any such additions or improvements, provided,
however, that the Resorts Entities will not acquire any interest in the Hilton
Marks. Hilton agrees that it will not take any action to register any of the
Resorts Marks, or any name or marks similar thereto. Hilton acknowledges that
neither Hilton nor any other Hilton Entity is entitled to receive any payment or
other value from Resorts or any of the Resorts Entities for any goodwill
associated with Hilton’s use of the Resorts Marks. Hilton agrees, for itself and
all the Hilton Entities, to take no action inconsistent with either Resorts’ or
the Resorts Entities’ ownership of and interest in the Resorts Marks.

 

(c) Display of Hilton Marks. Resorts will display the Hilton Marks in the
Project generally as currently displayed, and Hilton shall not require any
changes in the Licensed Marks or such display on or prior to the second
anniversary of the Effective Date. If at any time after the second anniversary
date of the Effective Date Hilton seeks to require Resorts, consistent with its
requirements for Other Hilton Licensees, to change the Licensed Marks or the
manner in which they need to be displayed, Resorts may, at its election, either:
(i) make the required changes at its sole cost; or (ii) terminate this Agreement
and pay the Termination Fee, which shall be Hilton’s sole remedy for such
termination. In addition, Resorts will not adopt any other names in operating
the Hotel that Hilton does not reasonably approve, but this provision shall be
subject to Section 4(d) and shall not restrict Resorts from using generally
other names in the Non-Hotel Operations, or from using any of the Resorts Marks
in the operation of the Hotel if such Resorts Marks are used generally in hotels
that use the Resorts Marks. Resorts will not use any of the Hilton Marks, or the
word “Hilton,” or any similar word(s) or acronym(s), in (i) Resorts’ corporate,
partnership, business or trade name except as provided in this Agreement (and
its current name), or (ii) any Internet-related name (including a domain name)
except as permitted or contemplated by this Agreement, or (iii) any business
operated separately from the Project, including the name or identity of
developments adjacent to or associated with the Project and any other hotel
properties Resorts may own, manage or operate. Resorts agrees that any
unauthorized use of the Hilton Marks will be an infringement of Hilton’s rights,
as well as a material breach of this Agreement.

 

(d) Display of Resorts Marks. Hilton will not use any of the Resorts Marks, or
the word “Resorts,” or any similar word(s) or acronym(s), in (i) Hilton’s
corporate, partnership, business or trade name except as provided in this
Agreement (and its current name), or (ii) any Internet-related name (including a
domain name) except as provided in this Agreement, or (iii) any business
operated separately from the Project, including the name or identity of
developments adjacent to or associated with the Project and any other hotel
properties Hilton may own, manage or operate. Hilton agrees that any
unauthorized use of the Resorts Marks will be an infringement of Resorts’
rights, as well as a material breach of this Agreement.

 

(e) Web Sites. (i) Resorts may not register, own, maintain or use any domain
names, World Wide Web or other electronic communications sites (collectively,
“Site(s)”), relating to the Hotel that includes the Hilton Marks except, for so
long as this Agreement is in effect, those sites listed on Schedule D, which
Resorts may use following the Purchase generally in the same manner as Caesar’s
prior to the Purchase (allowing for the change from Caesar’s to Resorts), it
being specifically understood and agreed that such web sites may not link to
Hilton web sites

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unless Resorts meets all standards for written or graphic content (including,
without limitation, privacy policies) applicable to Other Hilton Licensees.
Resorts agrees to obtain Hilton’s prior written approval (not to be withheld or
delayed unreasonably) concerning any third-party Site in which the Hotel will be
listed, and any proposed links between such Site and any other Site(s) (“Linked
Sites”) and any proposed modifications to same, provided, however, that Hilton
approves such uses to the extent they are consistent with past practice
(allowing for the change from Caesar’s to Resorts). All Sites affiliated with,
established by, or contracted with by, Resorts containing any of the Hilton
Marks and any Linked Sites must advertise, promote, and reflect on the Hotel and
the Hilton Marks in a first-class, dignified manner, consistent with past
practice (allowing for the change from Caesar’s to Resorts). Resorts
acknowledges and agrees that Hilton’s right to reasonable approval of all such
materials is necessitated by the fact that those materials will include and be
associated with the Hilton Marks. Therefore, any use of the Hilton Marks on the
World Wide Web, the Internet, or any computer network/electronic distribution,
must conform to Hilton’s requirements, including the identity and graphics
standards for all hotels using the Hilton Marks, all consistent with past
practice, subject to the provisions of clause (d) of Section 4 and the approval
of the Approved Advertising Campaign. Given the changing nature of this
technology, Hilton has the right to modify its requirements with respect to any
such link that is technologically incompatible with the Hilton System or
otherwise causes material problems for the Hilton information technology system,
and to withdraw any prior approval, if such link has changed in any material way
from the time such approval was given. Resorts also agrees to incorporate on
Resorts’ Site(s) any other information Hilton reasonably requires in the manner
deemed necessary to protect trademark rights or goodwill with respect to the
Hilton Marks.

 

(ii) Hilton may not register, own, maintain or use any Site(s) relating to the
Hotel that includes the Resort Marks as part of its name. Hilton agrees to
obtain Resort’s prior written approval, which shall not be unreasonably withheld
or delayed, concerning any third-party Site in which the Hotel will be listed,
and any proposed links between such Site and any Linked Sites and any proposed
modifications to same. All Sites affiliated with, established by, or contracted
with by, Hilton containing any of the Resorts Marks and any Linked Sites must
advertise, promote, and reflect on the Hotel and the Resorts Marks in a
first-class, dignified manner. Hilton acknowledges and agrees that Resorts’
right to reasonable approval of all such materials is necessitated by the fact
that those materials will include and be associated with the Resorts Marks.
Therefore, any use of the Resorts Marks on the World Wide Web, the Internet, or
any computer network/electronic distribution, must conform to Resorts’
requirements, including the identity and graphics standards for all hotels using
the Resorts Marks. Hilton also agrees to incorporate on Hilton’s Site(s) any
other information Resorts reasonably requires in the manner it deems necessary
to protect trademark rights or goodwill with respect to the Resorts Marks.

 

(f) Mutual Covenant. Each party agrees, as a direct covenant with the other,
that it will comply with all of the provisions of this Agreement related to the
manner, terms and conditions of the use of the Licensed Marks, and the
termination of any right of either party to use any of the Licensed Marks. Each
party agrees that any non-compliance by it with this covenant, the terms of this
Agreement, or any unauthorized or improper use of the Licensed Marks will cause
irreparable damage to the Licensor of the Licensed Marks and/or to its
affiliates. Each party therefore agrees that if it engages in this
non-compliance, or unauthorized and/or improper use of the Licensed Marks during
or after the License Term, the other party, its successors and assigns,
separately or together, will be entitled to both temporary and permanent
injunctive relief from any court of competent jurisdiction, in addition to all
other remedies that the Licensor may have at law. Each party consents to the
entry of such temporary and permanent injunctions with respect to these matters.
Each Licensee will be responsible for payment of all costs and expenses,
including reasonable attorneys’ fees, which the other party and its affiliates
may incur in connection with such Licensee’s non-compliance with this covenant.
Upon termination of its rights to use the Licensed Marks as provided in this
Agreement, all right and interest of each

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Licensee in and to such Licensed Marks shall revert fully to the Licensor of
such Licensed Marks. Each party agrees to permit the other party the right to
review and approve each proposed use of the Licensed Marks of the other upon
reasonable request. Each Licensee shall promptly produce and deliver (at its own
expense) to the Licensor such examples of its use of the Licensed Marks as such
Licensor shall reasonably request.

 

(g) Limitations on Use of the Licensed Marks. Each Licensee specifically agrees
that with respect to its license, as a licensee, of the Licensed Marks of the
other:

 

  (i) It shall faithfully reproduce such Licensed Marks’ design, coloration and
appearance, as such design, coloration and appearance may be modified from time
to time by the Licensor of such Licensed Marks. Such Licensee and its affiliates
shall not modify the design, coloration or appearance of the Licensed Marks
unless requested to do so in writing by the Licensor of such Licensed Marks;

 

  (ii) Its use of the Licensed Marks shall be subject to the Licensor’s prior
written approval (which will, in the case of advertising and promotional
materials, be as provided in Section 8(a)(iv) below), which approval shall not
be unreasonably withheld or delayed, on the basis of samples submitted by the
Licensee, and all use shall be made in strict conformance with such reasonable
specifications as the Licensor of the Licensed Marks shall establish, as such
specifications may be modified by the Licensor from time to time;

 

  (iii) Its display of the Licensed Mark shall bear such copyright, trademark,
service mark and other notices as the Licensor of such Licensed Marks shall
reasonably require, and such Licensee shall adhere to any other reasonable and
customary posting requirements developed by the Licensor with respect to such
Licensed Marks;

 

  (iv) Subject to the provisions of clause (d) of Section 4, it shall not use
the Licensed Marks as part of, or display such Licensed Marks in conjunction
with, any other names or marks except with the Licensor’s prior written
approval;

 

  (v) It shall not use the Licensed Marks or any confusingly similar or diluting
mark, term or design, except as expressly authorized in this Agreement, and it
shall not attempt to register or aid any third party in using or attempting to
register any such mark, term or design; and

 

  (vi) It shall not use the Licensed Marks in any manner that will indicate that
it is using such Licensed Marks other than as a licensee.

 

(h) Trademark Disputes. Each of the parties agrees that the protection of the
Licensed Marks and their distinguishing characteristics is important to each
party hereto. Accordingly, each party will notify the other of any infringement
or dilution of or challenge to its use of the other party’s Licensed Marks and
will not, absent a court order or the other party’s prior written consent,
communicate with any person regarding any such infringement, dilution, challenge
or claim. The respective Licensor will take the action it deems appropriate with
respect to such challenges and claims, and shall have the sole right to handle
disputes concerning use of all or any part of any mark it licenses to the other
party under this Agreement. Each party will extend its full cooperation to the
Licensor in protecting such Licensor’s rights. Each Licensee appoints the other
as such Licensee’s exclusive attorney-in-fact, to prosecute, defend and/or
settle all disputes of this type with respect to the Licensed Marks owned by
such Licensor (but only for

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that purpose). Each party will sign any documents which the Licensor believes
are necessary to prosecute, defend or settle any dispute or obtain protection
for the Licensed Marks owned by such Licensor and will assign to the Licensor
any claims that the Licensee may have related to these matters. Each Licensor’s
decision as to the prosecution, defense and settlement of such dispute will be
final. All recoveries made as a result of disputes regarding use of all or any
part of the Licensed Marks will be for the account of the Licensor of such
marks.

 

(i) LIMITATION OF WARRANTIES. EACH LICENSEE ACKNOWLEDGES THAT THE LICENSED MARKS
ARE LICENSED TO SUCH LICENSEE “AS IS.” EACH LICENSOR DISCLAIMS ANY EXPRESS OR
IMPLIED WARRANTY, INCLUDING NON-INFRINGEMENT, WITH RESPECT TO THE LICENSED
MARKS. IN NO EVENT SHALL EITHER LICENSOR BE LIABLE FOR ANY MATTER WHATSOEVER
RELATING TO THE USE BY THE LICENSEE OF THE LICENSED MARKS, EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED IN THIS AGREEMENT.

 

8.) Resorts’ Operation of the Hotel.

 

(a) Operational and Other Requirements. During the License Term, Resorts agrees
to:

 

  (i) operate, furnish, maintain and equip the Hotel in a clean, safe and
orderly manner and in first-class condition in accordance with the provisions of
this Agreement, and in compliance with all applicable local, state, and federal
laws, customs and regulations, including maintaining and conducting the Hotel’s
business in accordance with sound business and financial practices, subject to
the Renovation Plan;

 

  (ii) provide efficient, courteous and high-quality service to the public in
the operation of the Project, subject to the Renovation Plan;

 

  (iii) comply with the Hilton System as to the types and levels of services,
amenities and products that either must or may be used, promoted or offered at
or in connection with the Hotel, consistent with the types and levels of
services, amenities and products offered at or in connection with the Hotel
immediately prior to the Effective Date;

 

  (iv) advertise and promote the Hotel and related facilities and services on a
local, regional, national, and international basis to the extent Resorts deems
appropriate, provided all such advertising and promotions are conducted in a
first-class, dignified manner, using Hilton’s identity and graphics standards
for Other Hilton Licensees. Hilton has approved the Approved Advertising
Campaign set forth on Exhibit A. Resorts will consult with and receive Hilton’s
approval for advertising and promotional materials related to any Advertising
Campaign that Hilton has not previously approved (including any materials in
digital, electronic or computerized form, or in any form of media that exists
now or is developed in the future) before Resorts produces or distributes them,
provided, however, that no such approval shall be required for the Approved
Advertising Campaign or any materials generally consistent with or that
represent reasonable extensions of the Approved Advertising Campaign. If Resorts
changes the Approved Advertising Program in any material way or adopts any new
Advertising Campaign that is materially different than the Approved Advertising
Campaign, Resorts shall submit material representing such modified or new
Advertising Campaign to the senior Hilton executive responsible for the Hilton
brand (or any person with an equivalent position) of Hilton for its approval,
provided, however, that such Advertising Campaign shall be deemed approved if
Hilton does not

--------------------------------------------------------------------------------

notify Resorts of any objections within seven days of the submission of such
material to Hilton. Resorts shall use commercially reasonable efforts to
coordinate with Hilton the release of any new or materially different
Advertising Campaign. In the event Hilton reasonably concludes, consistent with
its criteria for advertising of Other Hilton Licensees, that such Advertising
Campaign is not in the best interest of the Hilton System, Hilton shall so
notify Resorts and, if the parties have been unable to resolve the matter within
seven days of Hilton’s notification, the matter shall be referred to Hilton’s
Chief Executive Officer or President and Resorts’ Vice Chairman, who shall meet
for such purpose within an additional seven days. In the event that, following
such meeting of senior executives (or failure to meet within such seven days),
the parties still cannot resolve their differences, Resorts may elect to
continue and effect such Advertising Campaign in which case Hilton may terminate
this Agreement on seven days prior notice to Resorts. Resorts shall then pay
Hilton, within five days of such notice, 50% of the Termination Fee, which shall
be Hilton’s sole remedy for such termination; provided, however, that Resorts
shall have the right, at any time until five days after the receipt of such
notice of termination, to elect to withdraw or revise any such Advertising
Campaign to comply with Hilton’s objections, in which case Hilton may not
terminate this Agreement as provided in this Section 8(a)(iv). If Resorts adopts
a new Advertising Campaign, or advertising materials that are materially
different than the Approved Advertising Campaign (or any subsequently approved
Advertising Campaign) and fails to submit such Advertising Campaign to Hilton,
the parties agree that without Hilton waiving any rights it may have as a result
of such failure, should Hilton determine that such Advertising Campaign is not
in the best interest of the Hilton System, Hilton shall so notify Resorts, and
Resorts shall use all commercially reasonable efforts to withdraw the
Advertising Campaign and cease using the same. In addition, the parties shall
immediately submit to the dispute resolution procedures set forth above,
starting with submission of the new Advertising Campaign to the senior Hilton
executive responsible for the Hilton Brand (or any person with an equivalent
position), with the same rights and remedies as set forth above for new
advertising and promotional materials Resorts submitted to Hilton for its
approval. Notwithstanding anything herein to the contrary, nothing in this
Section 8(a)(iv) will limit Hilton’s rights under clause (g) of Section 7 or
permit Hilton to object to any Advertising Campaign or any relevant materials
due to the combination of the Resorts Marks and the Hilton Marks, as long as
such combination is consistent with the Approved Adverting Campaign.

 

  (v) honor all nationally recognized credit cards and credit vouchers issued
for general credit purposes which are generally honored at other hotels using
the Hilton Marks, and enter into all necessary credit card and voucher
agreements with the issuers of such cards or vouchers;

 

  (vi) comply with all governmental requirements, including the filing and
maintenance of any required trade name or fictitious name registrations, pay all
taxes, and maintain all governmental licenses and permits necessary to operate
the Project;

 

  (vii) permit inspection of the Hotel by Hilton’s representatives at any time,
but no more than five times in any calendar year, to ensure compliance with this
Agreement (provided such inspection is conducted at reasonable times during
regular business hours, with prior written notice and does not unreasonably
interfere with the operation of the Project), cooperate fully with Hilton’s

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representatives during these inspections and take all reasonable steps necessary
to correct any deficiencies detected within any reasonable time periods Hilton
specifies;

 

  (viii) participate in, and pay all fees of, any travel agent commission
payment program(s) adopted for use by hotels using the Hilton Marks as modified
from time to time, and promptly pay as Hilton required of Other Hilton
Licensees, all travel agent commissions and third-party reservation service
charges (such as airline reservation system) in accordance with the terms of
these programs;

 

  (ix) treat as confidential all information constituting the Hilton System,
including but not limited to the Hilton Proprietary Information, except as
provided below. Resorts acknowledges and agrees that it: (i) does not acquire
any interest in Hilton Proprietary Information other than the right to utilize
the same in the operation of the Hotel under the terms of this Agreement, (ii)
will not use the Hilton Proprietary Information in any business or for any
purpose other than in the operation of the Hotel under the Hilton System, (iii)
will maintain the absolute confidentiality of the Hilton Proprietary Information
during and after the License Term, (iv) will not make unauthorized copies of any
portion of the Hilton Proprietary Information, and (v) will adopt and implement
all reasonable procedures Hilton may periodically establish to prevent
unauthorized use or disclosure of the Hilton Proprietary Information, including
restrictions on disclosure to employees and the use of non-disclosure and
non-competition clauses in agreements with employees, agents and independent
contractors who have access to the Hilton Proprietary Information. These
restrictions will not apply to any Hotel confidential information or any
information that does not relate or refer in any way or part to the Hilton
System and/or the Hilton Marks and that Resorts can demonstrate came lawfully to
its attention before Hilton’s disclosure or which, at the time of or after
Hilton’s disclosure, becomes a part of the public domain through lawful
publication or communication by others;

 

  (x) maintain, at Resorts’ expense, insurance of the types, and in the minimum
amounts, and containing such endorsements, as is set forth on Schedule E. Such
insurance shall name as additional insureds Hilton and Hilton Hotels
Corporation, and includes such notice requirements as Hilton may reasonably
request. If Resorts fails or neglects to obtain or maintain the insurance or
policy limits required by this Agreement, Hilton has the option, but not the
obligation, to obtain and maintain such insurance without prior notice to
Resorts, and Resorts will, immediately upon Hilton’s demand, reimburse Hilton
for any premiums and other out-of-pocket costs Hilton incurs in obtaining such
insurance; and

 

  (xi) refrain from allowing in-room gaming at the Hotel to the extent that
doing so requires any Hilton Entity to obtain a gaming license from, the Nevada
Gaming Control Board.

 

(b) Quality Assurance. Resorts acknowledges that Hilton and the Hilton Entities
have a significant interest in assuring the maintenance of the quality standards
of facilities using the Hilton Marks and the Hilton System and that the failure
of Licensee to maintain such standards is injurious to the integrity and
goodwill associated with the Hilton Marks and the Hilton System. Resorts shall
at all times during the License Term be responsible for the management of the
Hotel’s business and the maintenance of such standards.

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(c) Implementation of Renovation Plan. Following the Effective Date, Resorts
shall use its commercially reasonable efforts to implement the Renovation Plan,
subject to Resorts’ unfettered right, in its sole and absolute discretion, to
vary the timing, the allocation of resources and/or the means of implementation
of any portion of the Renovation Plan, so long as the Renovation Plan is
proceeding.

 

9.) Resorts Records and Audits.

 

(a) Reports. By the 15th day of each month, Resorts will submit to Hilton a
statement setting forth the Gross Rooms Revenue for the previous month and
reflecting the computation of the amounts then due under clause (b) of Section
6, in the form and detail Hilton reasonably requests (which, for the avoidance
of doubt, shall include reports as to the average daily rates charged at the
Hotel, room occupancy levels, and the revenue per available room (RevPAR) for
the Hotel).

 

(b) Maintenance of Records. Resorts will, in a manner and form reasonably
satisfactory to Hilton and using accounting and reporting standards Hilton
reasonably requires, prepare on a current basis (and preserve for no less than
the greater of four years), complete and accurate records concerning Gross Rooms
Revenue and other information required to be provided in the Reports from the
Effective Date, and maintain an accounting system that fully and accurately
reflects the same.

 

(c) Audit. No more than once each year, Hilton may require Resorts to have the
Gross Rooms Revenue computed and certified as accurate by a certified public
accountant. During the License Term and for one year thereafter, Hilton and its
authorized agents will have the right to verify information required under this
Agreement by requesting, receiving, inspecting and auditing, at all reasonable
times, any and all records referred to above wherever they may be located or
elsewhere if requested by Hilton. If any inspection or audit reveals that
Resorts understated or underpaid any payment due to Hilton that is not fully
offset by overpayments, Resorts will promptly pay to Hilton the deficiency plus
interest from the date each payment was due until paid at a rate of 1% per month
or the maximum permitted by law, whichever is less. If the audit or inspection
reveals that the underpayment is either willful, or is for 5% or more of the
total amount owed for 1% Fees for the period being inspected, Resorts will also
reimburse Hilton for all inspection and audit costs. Hilton’s acceptance of
Resorts’ payment of any deficiency will not condone Resorts’ breach of this
Agreement, or waive that breach, or any rights Hilton may have for Resorts’
breach, including Hilton’s right to terminate this Agreement. If the audit
discloses an overpayment, Hilton will credit this overpayment against Resorts’
future payments under this Agreement, without interest, or if no future payments
are due under this Agreement, Hilton will promptly pay Resorts the amount of the
overpayment without interest.

 

(d) Ownership of Information. All of the information Hilton obtains about the
Hotel or its guests under this Agreement, or under any agreement ancillary to
this Agreement, or otherwise related to the Hotel (the “Information”) and all
revenues Hilton derives from such Information, will be Hilton’s property. Hilton
may use the Information for any reason as it deems necessary or appropriate, in
Hilton’s discretion, including making an earnings claim in Hilton’s franchise
offering documents, but Hilton may not disclose any information received through
Hilton Reservations Worldwide to gaming properties that are not part of the
Hilton Reservations Worldwide network even if Hilton uses such Information to
make bookings with such other property. During the License Term Resorts may use,
to the extent lawful and as provided under this Agreement, and at its sole risk
and responsibility, any information that it acquires from third parties in
operating the Hotel, including customer data. Following termination or
expiration of the License Agreement, Resorts will have a perpetual, worldwide
non-exclusive right and license to use any of the foregoing Information that
Resorts obtained from customers of the Hotel, and

 

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such other customer data Hilton customarily provides to Other Hilton Licensees
upon termination, which currently includes: (i) guest history that is relevant
to the Hotel, to the extent it is stored and accessible in Hilton computer
systems, and (ii) reservation and guest information for reservations booked at
the Hotel prior to termination or expiration of this Agreement and scheduled for
arrival at the Hotel following termination or expiration of this Agreement. All
use of such Information by Resorts shall be at Resorts’ sole risk and
responsibility, and subject to indemnification of Hilton by Resorts for any
unlawful use of Information.

 

9A.) Hilton Reports.

 

 

(a) Hilton Lead Reports. Within 30 days following the close of each month,
Hilton shall provide to Resorts a detailed report of the Leads developed by
Hilton (the “Hilton Lead Report”), which report shall contain the following
information for that month:

 

(i) the name and contact particulars of each Account, including the number of
rooms and room nights requested and, if known at the time of the referral of the
Lead, the applicable room rate, and the arrival and departure dates for each
Event;

 

(ii) the source of the Lead, i.e., Hilton sales office and sales person;

 

(iii) reports of the current trends and booking pace and progress (but not goals
for Hilton sales offices or individual sales persons);

 

(iv) monthly and year-to-date Lead and booking report; and

 

(v) a summary of all Leads for the Project for the month and year-to-date.

 

(b) Hilton Booking Reports. Within 30 days following the close of each month,
Hilton shall provide to Resorts a detailed report (the “Hilton Booking Report”)
containing the following information (based on Hilton’s receipt of the
underlying information from Resorts) for that month:

 

(i) the name of each Lead that has contracted with the Project as shown on a
previous Hilton Lead Report for the month preceding that month, including the
number of rooms reserved and total room nights, and the room rate (either
confirmed rate or average room rate) for each room and the total Gross Rooms
Revenue for the Event;

 

(ii) the name of each Account/Event occurring at the Project as the result of a
Lead shown on a previous Hilton Lead Report for the month preceding that month,
including the number of room nights and the total room nights, the rate for each
occupied room, occupied and no-shows and the total Gross Rooms Revenue and the
arrival and departure dates of each Event; and

 

(iii) a summary for the month and year-to-date.

 

(c) As used herein, the following terms have the meanings set forth below:

 

(i) “Account” means a person or group that Hilton identifies as the source for
an Event.

 

(ii) “Event” means potential and actual hotel room group business at the
Project.

 

(iii) “Lead” means an Account referred by Hilton.

 

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10.) Indemnity.

 

(a) Resorts Indemnity. Resorts agrees, during and after the License Term, to
indemnify the Hilton Indemnitees against, and hold them harmless from, all
losses, costs, liabilities, damages, claims, and expenses, including reasonable
attorneys’ fees (collectively, “Expenses”), arising out of or resulting from (i)
any claimed occurrence at the Project or arising from, as a result of, or in
connection with the operation of the Project (including but not limited to the
design, construction, financing, furnishing, equipment, acquisition of supplies
or operation of the Project in any way); (ii) any bodily injury, personal
injury, death or property damage suffered by any guest, customer, visitor or
employee of the Project; (iii) Resorts’ alleged or actual infringement or
violation of any patent, trademark, service mark, copyright or other proprietary
right owned or controlled by third parties; (iv) Resorts’ alleged or actual
violation or breach of any contract, federal, state or local law, regulation,
ruling, standard or directive applicable to the Project or of any industry
standard; (v) any other business conducted by Resorts or a third party in, on or
about the Project or its grounds; or (vi) any other of Resorts’ acts, omissions
or obligations or those of anyone associated or affiliated with Resorts or the
Project or in any way arising out of or related to this Agreement or Resorts’
breach of this Agreement. However, Resorts does not have to indemnify Hilton to
the extent damages otherwise covered under this Section 10 are adjudged by a
court of competent jurisdiction to have been (A) subject to indemnity by Hilton
under the provisions of clause (b) of this Section 10, or (B) the result of the
recklessness, gross negligence or willful misconduct of any of the Hilton
Indemnitees; in each case so long as the claims are not asserted on the basis of
theories of vicarious liability, including agency, apparent agency or
employment, or Hilton’s failure to compel Resorts to comply with the provisions
of this Agreement. Further, Resorts will indemnify the Hilton Indemnitees for
any claim for damages by reason of the acts or omissions of any contractor,
subcontractor, supplier or vendor doing business with Resorts relating to the
Project. Notwithstanding the foregoing, Resorts shall have no obligation to
indemnify, defend and hold harmless any Hilton Indemnitee from any Expenses
resulting from any claim of any third party that a Hilton Mark is invalid or any
other matter for which such Resorts Party is indemnified under clause (b) of
this Section 10, unless such claim of invalidity arises from a Resorts
Indemnitee’s failure to comply with the terms of this Agreement, or resulted
from an allegation that a Hilton Indemnitee’s use of a Resorts Mark infringes
upon the proprietary rights of such third party, provided that such claim arises
from such Hilton Indemnitee’s use of such Resorts Mark in accordance with the
terms of this Agreement.

 

(b) Hilton Indemnity. Hilton agrees, during and after the License Term, to
indemnify the Resorts Indemnitees against, and hold them harmless from, all
Expenses arising out of or resulting from: (i) the use of the Resorts Marks by
any Hilton Entity other than in a manner explicitly or impliedly authorized by
Resorts; (ii) an allegation that the use by Resorts of the Hilton Marks in a
manner authorized explicitly or impliedly by Hilton or any Hilton Entity
infringes upon the proprietary rights of a third party; or (iii) Hilton’s breach
of this Agreement. However, Hilton does not have to indemnify Resorts to the
extent that damages otherwise covered under this Section 10 are adjudged by a
court of competent jurisdiction to have been (A) subject to indemnity by Resorts
under the provisions of clause (a) of this Section 10 or (B) the result of the
recklessness, gross negligence or willful misconduct of any of the Resorts
Indemnitees; in each case so long as claims are not asserted on the basis of
theories of vicarious liability, including agency, apparent agency or
employment, or Resorts’ failure to compel Hilton to comply with the provisions
of this Agreement. Notwithstanding the foregoing, Hilton shall have no
obligation to indemnify, defend and hold harmless any Resorts Indemnitee from
any Expenses resulting from any claim of any third party that a Resorts Mark is
invalid or any other matter for which such Hilton Indemnitee is indemnified
under clause (a) of Section 10, unless such claim of invalidity arises from a
Hilton Indemnitee’s failure to comply with the terms of this Agreement, or
resulted from an allegation that a Resorts Indemnitee’s use of a Hilton Mark
infringes upon the

 

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proprietary rights of such third party, provided that such claim arises from
such Resorts Indemnitee’s use of such Hilton Mark in accordance with the terms
of this Agreement.

 

(c) Details of Indemnification. Any Indemnified Party will give the Indemnitor
written notice of any action, suit, proceeding, claim, demand, inquiry or
investigation involving an Indemnified Party within 10 days of the Indemnified
party’s actual or constructive knowledge of it; provided, however, that (i) the
failure of an Indemnified Party to provide notice on a timely basis shall not be
considered a defense to the Indemnitor’s obligation to indemnify the Indemnified
Party except to the extent the Indemnitor has been prejudiced by the failure of
the Indemnified Party to provide notice within such time frame; and (ii) the
provision of notice by one Indemnified Party shall be considered the provision
of notice by all Indemnified Parties. At the option of the Indemnified Parties,
the Indemnitor will defend the Indemnified Parties against the same, or the
Indemnified Parties may elect to assume (but under no circumstance will the
Indemnified Parties be obligated to undertake) the defense and/or settlement of
the action, suit, proceeding, claim, demand, inquiry or investigation at the
Indemnified Parties’ expense and risk.

 

  (i) 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 the
Proceeding.

 

  (ii) 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, such release not to include any limitation on the Indemnified
Party’s rights to do business or to its rights under this Agreement; or (ii) the
prior written consent of the Indemnified Party.

 

  (iii) 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 each
Proceeding, 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.

 

  (iv) The Indemnified Parties may obtain separate counsel of the Indemnified
Parties’ choice if the Indemnified Parties believes the Indemnitor’s and the
Indemnified Parties’ interests may conflict. The Indemnified Parties’
undertaking of defense and/or settlement will in no way diminish the
Indemnitor’s obligation to indemnify the Indemnified Parties and to hold them
harmless. In either case, the Indemnitor will also reimburse the Indemnified
Parties upon demand for all expenses, including reasonable attorneys’ fees and
court costs the Indemnified Parties incur to protect themselves, or to remedy
the Indemnitor’s defaults. Under no circumstances will the Indemnified Parties
be required to seek recovery from third parties or otherwise mitigate their
losses to maintain a claim against the Indemnitor, and their failure to do so
will in no way reduce the amounts recoverable from the Indemnitor by the
Indemnified Parties.

 

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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, and, for
clarification purposes, all reservations made through Hilton Reservations
Worldwide will be confirmed by Resorts through its computerized reservations
system in a manner reasonably acceptable to Hilton.

 

12.) Assignment and Sublicense. Resorts may not assign its rights and/or
obligations under this Agreement or in the Hotel, or sublicense its rights to
use either the Hilton Marks or the Hilton System to a third party, without the
prior written consent of Hilton (which consent may be withheld in Hilton’s sole
discretion of Hilton). Hilton agrees, however, that if Resorts desires to assign
this Agreement to a wholly owned subsidiary that owns and operates the Project
and the real estate underlying the Project, and which complies with the
remaining provisions of this Section 12, Hilton will approve the assignment.
Hilton may not assign its rights and/or obligations under this Agreement to any
person who does not, at the time of such assignment, have the right to the
Licensed Marks and to substantially all the components of the Hilton System.
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 the non-assigning party, in a form reasonably satisfactory to the
assigning party, 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 the non-assigning party as an intended third party beneficiary of such
assignment or sublicense agreement. If requested by the non-assigning party,
such assignee or sublicensee shall also execute an instrument or instruments
pursuant to which such assignee or sublicensee agrees to be bound by, and become
a party to, this Agreement. Any purported assignment or sublicense not in
compliance with the terms of this Agreement shall be null and void. In addition,
if Hilton assigns its rights and/or obligations under this Agreement to any
person who is not a licensor, or an affiliate of the licensor, of at least 50%
of the Other Hilton Licensees, Resorts shall have the right to terminate this
Agreement within 90 days of such assignment without any liability for such
termination (including any liability to pay the Termination Fee). 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) No Renewal Rights. This Agreement, unless earlier terminated pursuant to
this Section 13, shall expire at 11:59 p.m. on December 31, 2008. This Agreement
contains no right of renewal, and no right of either party to insist upon a
successor license.

 

(b) Resorts Termination for Cause. Resorts may terminate its license to Hilton
of the Resorts Marks if Hilton uses the Resorts Marks in any manner not
authorized under this Agreement, and does not cure such failure within 30 days
following notice from Resorts. Such termination shall not, however, affect the
remaining obligations of the parties under this Agreement, including but not
limited to the obligation of Resorts to continue to operate the Hotel under the
Hilton Marks and using the Hilton System, and to pay all fees required to be
paid to Hilton under this Agreement. In addition to any other termination rights
described in this Agreement, Resorts shall also have the right to terminate this
Agreement immediately upon notice to Hilton upon the occurrence of any of the
following events:

 

  (i) if Hilton fails to provide the services to be provided to Resorts under
clauses (a), (b) or (c) of Section 5 (unless excused from doing so under clause
(e) of Section 5) and does not cure such failure within 30 days following the
provision of notice of default to Hilton; or

--------------------------------------------------------------------------------

  (ii) if any of the Hilton Entities agrees to any restriction or limitation on
the use of the Licensed Marks that materially limits the rights of Resorts under
this Agreement and does not cure such violation within 30 days following the
provision of notice to Hilton.

 

(c) Hilton Termination for Cause. Hilton shall have the right to terminate this
Agreement upon immediate notice to Resorts upon the occurrence of any of the
following events:

 

  (i) Resorts fails to satisfy or comply with any of the obligations,
requirements, conditions or terms set forth in this Agreement and does not cure
such failure or satisfy or comply with such provision within 30 days following
the provision of notice of default to Resorts; provided, however, that in the
case of a non-monetary default that is incapable of cure within 30 days, then
Hilton may only terminate this Agreement if Resorts fails to commence cure
within such 30 day period and diligently pursue cure of such default or fails to
cure the default within the additional time periods set forth in the notice of
default;

 

  (ii) If after curing any material violation of this Agreement, Resorts engages
in the same non-compliance within any consecutive 12 month period and does not
cure such violation within 10 days after notice from Hilton;

 

  (iii) If after receiving two notices that Resorts is in material violation of
this Agreement within a period of 24 consecutive months, Resorts receives a
third notice from Hilton within such 24 month period, indicating that it has
failed to comply with its obligations under this Agreement and does not cure
such violation within 10 days following receipt of notice from Hilton;

 

  (iv) Resorts loses fee title to, or possession of, all or a significant part
of the Hotel or Hotel site, whether through foreclosure, including but not
limited to, foreclosure on any lien, trust, deed, or mortgage, or lease, but
excluding any foreclosure by a lender to whom a Lender Comfort Letter has been
provided by Hilton;

 

  (v) Resorts’ continued operation of the Hotel will result in an imminent
danger to the public health or safety;

 

  (vi) The gaming license under which Resorts operates the gaming facilities
within the Non-Hotel Operations is revoked, or suspended for more than three
consecutive days;

 

  (vii) Resorts or any officer or director of Resorts is convicted of any gaming
violation in connection with the operation of the gaming facilities in the
Non-Hotel Operations;

 

  (viii) Resorts uses the Hilton Marks in any manner prohibited under this
Agreement and fails to cease such use within five days following notice of such
non-conforming use;

 

  (ix) Resorts fails to continue to identify the Hotel to the public under the
Hilton Marks, or abandons the operation of the Hotel by failing to operate the
Hotel for five consecutive days, or any shorter period after which it is not
unreasonable under the facts and circumstances for Hilton to conclude that
Resorts does not intend to continue to operate the Hotel, unless the failure to
operate is due to Force Majeure; or

 

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  (x) Resorts transfers any interest in this Agreement or in the Hotel in
violation of the provisions of Section 12.

 

(d) Resorts Termination Without Cause. Notwithstanding anything herein to the
contrary, in addition to any other termination rights provided in this
Agreement, Resorts shall have the right, at any time during the License Term, to
terminate this Agreement, subject to the provisions of Section 14(e).

 

14.) Effect of Expiration or Termination.

 

(a) Cessation of Use of Licensed Marks. Upon the expiration or termination of
this Agreement for any reason, each party shall immediately discontinue use of
the Licensed Marks of the other Party, refrain from using any confusingly
similar marks, terms or designs, and no longer possess any right or interest in
such Licensed Marks.

 

(b) De-Identification of Hotel. Upon the expiration or termination of this
Agreement for any reason, Resorts shall immediately cease holding the Hotel out
to the public as a part of the Hilton System, and take whatever action is
necessary to assure that no use is made of any part of the Hilton System
(including the Hilton Marks, and all forms of advertising and other indicia of
operation as a Hilton Hotel), and discontinue use of all distinguishing indicia
of the Hilton System, including such indicia on exterior and interior signs,
stationery, operating equipment and supplies, Internet sites, brochures and
other promotional material at or in connection with the Hotel, the Project, or
otherwise. Resorts will also return to Hilton all Hilton Proprietary
Information, remove all features of the Hotel that include elements of the
Hilton Marks or the Hilton System, including the primary freestanding sign
identifying the Hotel down to the structural steel, and take all other actions
(“De-Identification Actions”) required to preclude any possibility of confusion
on the part of the public that the Hotel is still using all or any part of the
Hilton Marks or the Hilton System or is otherwise holding itself out to the
public as a hotel affiliated with the Hilton System. If Resorts fails to take
all De-Identification Actions, Hilton will be entitled to recover all losses,
costs, expenses and damages caused by such failure. Hilton will also be entitled
to relief by injunction, and any other right or remedy at law or in equity to
enforce its rights under this clause (b).

 

(c) Inventory. Notwithstanding any other provision of this Agreement, for a
period of up to 90 days following the termination (but not expiration) of this
Agreement, Resorts may retain any hotel equipment and operating supplies bearing
the Hilton Marks and Resorts may use the Hilton Marks in connection with such
hotel equipment and operating supplies for such period, provided that Resorts
does not acquire any additional hotel equipment or operating supplies bearing
the Hilton Marks following termination of this Agreement.

 

(d) Assignment of Certain Listings and Registrations. Upon the expiration or
termination of this Agreement, each party agrees to irrevocably assign and
transfer to the other party (or to its designee) all of such party’s right,
title and interest in any domain name listings and registrations which contain
any reference to the applicable Licensed Marks, and will notify the applicable
domain name registrar(s) of the termination of its right to use any domain name
or Site(s) associated with such Licensed Marks, and will authorize and instruct
the cancellation or transfer of the domain name to such other party (or its
designee), as directed by it. Each party will also delete all references to the
applicable Licensed Marks from any other Site(s) Resorts owns, maintains or
operates beyond the expiration or termination of this Agreement. Resorts may
elect to retain any and all telephone numbers and telephone listings for the
Hotel or the Project, so long as Resorts does not refer to such numbers or refer
to them in such listings using the Hilton name; it being understood that Resorts
will not authorize any renewal or redistribution of any printed listing using
the Hilton name, whether on-line or off-line.

 

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(e) Liquidated Damages for Early Termination. If this Agreement is terminated by
Hilton for any of the reasons set forth in clause (c) of Section 13, Resorts
acknowledges that it shall remain liable for all Annual Royalty Fees (using,
solely for the purposes of this calculation, a notional Annual Royalty Fee of
$2,500,000 per year) that would be due through the normal expiration of this
Agreement, which fees shall become immediately due and payable upon termination
of this Agreement as well as all amounts owed to Hilton for periods prior to the
date of termination. This same obligation will exist if Resorts terminates this
Agreement during the first two years following the Effective Date other than in
accordance with the provisions of clause (b) of Section 13 (unless another
provision of this Agreement permits termination by payment of no fee or only the
Termination Fee). If Resorts terminates this Agreement more than two years
following the Effective Date of this Agreement other than in accordance with the
provisions of clause (b) of Section 13 (and in a manner other than in accordance
with the provisions of Sections 2(a), 8(a)(iv) or 12 of this Agreement, which
provisions shall govern whether any amount is payable in respect of such
termination notwithstanding this sentence and without duplication of any amounts
to be paid pursuant to Sections 5(a) and 7(c)), then Resorts will be obligated
to pay the Termination Fee, provided such payment is made at or before
termination of this Agreement (and if not paid by that time, Resorts shall be
liable for the full liquidated damages set forth above). If Resorts terminates
this Agreement at any time in accordance with the provisions of clause (b) of
Section 13, no Termination Fee or other liquidated damages shall be due.

 

(f) Remedies Not Exclusive. Resorts acknowledges that the liquidated damages
provided for in clause (e) are only intended to compensate Hilton for the lost
benefit of its bargain under this Agreement, and that Resorts will remain liable
for (i) all other obligations and claims under this Agreement relating to the
period prior to such termination, (ii) all of its obligations following
termination of this Agreement, and (iii) liabilities arising out of any breach
or default of this Agreement by Resorts during the License Term. Hilton likewise
acknowledges that if Resorts exercises its right to terminate this Agreement in
accordance with the provisions of clause (b) of Section 13 or under any other
provision hereunder: Hilton will be liable for (i) all obligations and claims
under this Agreement relating to the period prior to such termination, (ii) all
of its obligations following termination of this Agreement, and (iii) for
liabilities arising out of any breach or default of this Agreement by Hilton
during the License Term. Hilton further acknowledges that the availability of
the right of termination on the part of Resorts shall not prejudice Resorts’
right to pursue any additional remedies to which it may be entitled at law or in
equity with respect to a breach by Hilton of this Agreement.

 

15.) Miscellaneous.

 

(a) Severability and Interpretation. The remedies provided in this Agreement are
cumulative. These remedies are not exclusive of any other remedies to which
Resorts or Hilton may be entitled in case of any breach or threatened breach of
the terms and provisions hereof. If any provision of this Agreement is held to
be unenforceable, void or voidable, that provision will be ineffective to the
extent of the prohibition without in any way invalidating or affecting the
remaining provisions of this Agreement, and all remaining provisions will
continue in effect. If any provision of this Agreement is held unenforceable due
to its scope, but may be made enforceable by limiting its scope, the provision
will be considered amended to the minimum extent necessary to make it
enforceable. This Agreement will be interpreted without interpreting any
provision in favor of or against either party by reason of the drafting of the
provision, or of either party’s position relative to the other. Any covenant,
term or provision of this Agreement that provides for continuing obligations
after the expiration or termination of this Agreement will survive any
expiration or termination. To the extent that the provisions of this Agreement
provide for periods of notice less than those required by applicable law, or
provide for termination, cancellation, non-renewal or the like other than in
accordance with applicable law,

 

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those provisions will, to the extent they are not in accordance with applicable
law, be superseded by said law, and each party shall comply with applicable law
in connection with each of these matters.

 

(b) Controlling Law. This Agreement will become valid when signed by both
parties. Except to the extent governed by the United States Trademark Act of
1946 (Lanham Act; 15 U.S.C. ¶ 1050 et seq.), as amended, this Agreement, all
relations between the parties, and any and all disputes between the parties,
whether sounding in contract, tort, or otherwise, are to be exclusively
construed in accordance with and/or governed by (as applicable) the laws of the
State of New York without recourse to New York (or any other) choice of law or
conflicts of law principles. If, however, any provision of this Agreement would
not be enforceable under the laws of New York, and the provision would be
enforceable under the laws of Nevada, the state in which the Hotel is located,
then the provision in question (and only that provision) will be interpreted and
construed under the laws of Nevada. Nothing in this section is intended to
invoke the application of any franchise, business opportunity, antitrust,
“implied covenant,” unfair competition, fiduciary or any other doctrine of law
of the State of New York or any other state which would not otherwise apply
absent this clause (b) of Section 15.

 

(c) Venue. Any litigation arising out of or related to this Agreement, any
breach of this Agreement, or the relationship between the parties, and any and
all disputes between the parties, whether sounding in contract, tort, or
otherwise, will be submitted to and resolved exclusively by a court of competent
jurisdiction located in the City and State of New York. Each party waives, and
agrees never to assert, move or otherwise claim that this venue is for any
reason improper, inconvenient, prejudicial or otherwise inappropriate
(including, any claim under the judicial doctrine of forum non conveniens).

 

(d) Exclusive Benefit. This Agreement is exclusively for Hilton’s and Resorts’
benefit, and none of the obligations of either party in this Agreement will run
to, or be enforceable by, any other party (except for covenants in favor of the
Resorts Entities and the Hilton Entities, which covenants will run to and be
enforceable by such entities or their successors and assigns), or give rise to
liability to a third party, except as otherwise specifically set forth in this
Agreement.

 

(e) Entire Agreement. This Agreement is the entire agreement between the parties
with respect to the subject matter hereof, and will supersede any prior and/or
contemporaneous discussions or writings (whether described as representations,
inducements, promises, agreements or by any other term) with respect to the
subject matter of this Agreement. Each party agrees that it placed, and will
place, no reliance on any such discussions or writings. Each party agrees that
no claims, representations or warranties of earnings, sales, profits, success or
failure of the Hotel have been made by it or any of its affiliates to the other.
No change, modification, amendment or waiver of any of the provisions of this
Agreement will be effective and binding upon either party unless it is in
writing, specifically identified as an amendment to this Agreement, and signed
by an officer of the party to be bound. No failure by either party to exercise
any power given to it under this Agreement or to insist on strict compliance by
the other party with any of such other party’s obligations, and no custom or
practice at variance with the terms of this Agreement, will be considered a
waiver of a party’s right to demand exact compliance with the terms of this
Agreement.

 

(f) Consent; Business Judgment. Wherever either party’s consent or approval is
required in this Agreement, unless the provision specifically indicates
otherwise, such party has the right to withhold its approval in its sole
discretion. When the terms of this Agreement specifically require that a party
not unreasonably withhold its approval or consent, if the other party is in
default or breach under this Agreement, any withholding of approval or consent
will be considered reasonable. Neither party’s approvals and consents will be
effective unless given in writing.

 

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(g) Notices. All notices must be in writing and will be effective on the earlier
of (i) the day it is sent via facsimile with a confirmation of receipt; or (ii)
one business day after it is sent by next business day delivery service; or
(iii) the third business day after it is sent by first-class or certified mail
or other form of express delivery to the appropriate party at the following
single address, or such other single address as may be designated by the party
to be notified (which, in no event, is a P.O. Box). If to Hilton, the notice
should be sent to Hilton’s principal executive offices, addressed to “General
Counsel,” with a copy to Larkin Hoffman Daly & Lindgren, Ltd., 7900 Xerxes
Avenue South, #1500, Minneapolis, Minnesota 55431, fax: (952) 896-1511, attn:
Charles S. Modell, Esq. The current address of Hilton’s principal executive
offices is as follows: 9336 Civic Center Drive, Beverly Hills, California 90210,
fax: (310) 205-7613. If to Resorts, then to Colony Resorts LVH Acquisitions,
LLC, c/o Nicholas L. Ribis, Manager, c/o Colony Capital, LLC, 660 Madison
Avenue, New York, New York 10021, fax: (212) 593-5433, with a copy to Proskauer
Rose LLP, 1585 Broadway, New York, New York 10036-8299, fax: (212) 969-2900,
attn: Jeffrey A. Horwitz, Esq. In either case, a party may change its address or
fax by providing notice of such change to the other in accordance with this
notice provision.

 

(h) Descriptive Headings. The descriptive headings in this Agreement are for
convenience only and will not control or affect the meaning or construction of
any provision in this Agreement.

 

(i) Time. Time is of the essence of this Agreement.

 

(j) Counterparts. This Agreement may be signed in counterparts, each of which
will be considered an original.

 

(k) Attachments, Schedules and Exhibits. Any Attachment, Schedule, or Exhibit to
this Agreement is incorporated by reference and made a part of this Agreement.

 

(l) Blocked Persons or Entities. Each party represents and warrants to the other
that to the actual or constructive knowledge of the representing party: (1)
neither it (including its directors and officers), nor any of the Resorts
Entities or the Hilton Entities (as the case may be) or their respective
affiliates, or the funding sources for any of the foregoing, is identified on
the list of the Treasury’s Office of Foreign Assets Control (OFAC); (2) neither
it nor any of the Resorts Entities or the Hilton Entities (as the case may be)
or their respective affiliates, is directly or indirectly owned or controlled by
the government of any country that is subject to an embargo imposed by the
United States government; and (3) neither it nor any of the Resorts Entities or
the Hilton Entities (as the case may be) or their respective affiliates is
acting on behalf of a government of, or is involved in business arrangements or
other transactions with, any country that is subject to such an embargo. Each
party agrees that it will notify the other in writing immediately upon the
occurrence of any event which would render the foregoing representations and
warranties of this clause (l) incorrect. Notwithstanding anything to the
contrary in this Agreement, no Transfer shall be made to a Specially Designated
National or Blocked Person (as herein defined below) or to an entity in which a
Specially Designated National or Blocked Person has an interest. For purposes of
this Agreement, “Specially Designated National or Blocked Person” means (i) a
person or entity designated by OFAC (or any successor office or agency of the
U.S. government) from time to time as a “specially designated national or
blocked person” or similar status, (ii) a person or entity described in Section
1 of U.S. Executive Order 13224, issued on September 23, 2001, or (iii) a person
or entity otherwise identified by government or legal authority as a person with
whom Hilton or Resorts, as the case may be, is prohibited from transacting
business. Note: The U.S. government has published a list of such designations
and the text of the Executive Order is published under the Internet website
address www.ustreas.gov/offices/enforcement/ofac.

 

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(m) Specific Performance. The parties hereto agree that remedies 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.

 

(n) Expenses. Except as specifically provided otherwise in this Agreement, each
party shall bear its own fees and expenses incurred in connection with this
Agreement and the consummation of the transactions contemplated hereby.

 

(o) 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.

 

(p) Compliance by Entities. Hilton shall take all such actions as are necessary
to ensure compliance with the terms of this Agreement by the Hilton Entities
other than Hilton; and Resorts shall take all such actions as are necessary to
ensure compliance with the terms of this Agreement by the Resorts Entities other
than Resorts.

 

(q) Sales Agreement. The consent by Caesar’s to Hilton’s providing sales
representation services to Resorts without violating the Existing Sales
Agreement (including without limitation Section 10(a) thereof) shall be a
condition precedent to the effectiveness of this Agreement (and each party’s
obligations hereunder). If Hilton shall otherwise amend the Existing Sales
Agreement, it shall do so only in a manner that is consistent with this
Agreement and does not provide to any properties managed and/or owned by
Caesar’s any treatment with respect to the allocation and pursuit of referrals
that is not equitable to the Project vis-à-vis any properties managed and/or
owned by Caesar’s.

 

(r) Termination of Booth Lease Agreement. Provided Hilton or one of its
affiliates is able to enter into a similar agreement with respect to the
placement of a new time share booth at Caesar’s Palace Hotel in Las Vegas (and
Hilton covenants to use commercially reasonable efforts to do so), then upon
notice from Hilton (but, assuming Hilton or one of its affiliates has obtained
such an agreement in sufficient time to do so, in no event later than 90 days
following the Effective Date), the Booth Lease Agreement between Hilton Grand
Vacations Development – Las Vegas, LLC and Las Vegas Hilton Corporation will
terminate with no further liability to either party thereto, and Hilton shall
cause any booth and related items to be removed from the Hotel at no cost to
Resorts.

 

(s) Mortgagee Protection. Hilton agrees to provide a letter to the party holding
the first mortgage on the Project, in the form attached hereto as Schedule For
such other form as is agreeable to Hilton (the “Lender Comfort Letter”), and to
comply with the terms of that letter in connection with any default by Resorts
under this Agreement, or any foreclosure upon the Project by such lender.

 

(t) Schedules. Each of the schedules attached hereto are expressly incorporated
herein by reference and made a part of this Agreement.

 

(u) Termination Fee as Hilton’s Sole Remedy. Whenever this Agreement gives
Resorts a right to terminate this Agreement and to pay the Termination Fee as
Hilton’s sole remedy for such termination, such language shall not preclude
Hilton from pursuing remedies for other

 

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violations of this Agreement that occurred prior to such termination, or that
occur subsequent to such termination with respect to post-termination provisions
of this Agreement.

 

16.) WAIVER OF JURY TRIAL. TO THE EXTENT EITHER PARTY INITIATES LITIGATION
INVOLVING THIS AGREEMENT OR ANY ASPECT OF THE RELATIONSHIP BETWEEN THEM (EVEN IF
OTHER PARTIES OR OTHER CLAIMS ARE INCLUDED IN SUCH LITIGATION), ALL PARTIES
WAIVE THEIR RIGHT TO A TRIAL BY JURY. THIS WAIVER WILL APPLY TO ALL CAUSES OF
ACTION THAT ARE OR MIGHT BE INCLUDED IN SUCH ACTION, INCLUDING CLAIMS RELATED TO
THE ENFORCEMENT OR INTERPRETATION OF THIS AGREEMENT, ALLEGATIONS OF STATE OR
FEDERAL STATUTORY VIOLATIONS, FRAUD, MISREPRESENTATION, OR SIMILAR CAUSES OF
ACTION, AND IN CONNECTION WITH ANY LEGAL ACTION INITIATED FOR THE RECOVERY OF
DAMAGES BETWEEN OR AMONG THE PARTIES HERETO OR BETWEEN OR AMONG ANY OF SUCH
PARTY’S OWNERS, AFFILIATES, OFFICERS, EMPLOYEES OR AGENTS.

 

[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 INNS, INC.,

a Delaware corporation

By:  

/s/    Jonathan Benowitz        

Name:

  Jonathan Benowitz

Title:

  Senior Vice President

 

COLONY RESORTS LVH ACQUISITIONS, L.L.C.

a Nevada limited liability company

By:  

/s/    Nicholas L. Ribis        

Name:

  Nicholas L. Ribis

Title:

  Manager