Marketing/Administration Fund and Incentive Agreement - Hilton Hotels Corp. and CAIS Inc.
MARKETING/ADMINISTRATION FUND AND INCENTIVE AGREEMENT
-----------------------------------------------------
THIS MARKETING/ADMINISTRATION FUND AND INCENTIVE AGREEMENT dated for reference
purposes only, December 23, 1998, by and between Hilton Hotels Corporation, a
Delaware corporation (herein after referred to as "HHC"), and CAIS, Inc., a
Virginia corporation ("CAIS").
WITNESSETH:
WHEREAS, CAIS and HHC have entered into that certain Master License Agreement
dated 199_ (the "Master Agreement"); and
WHEREAS, the parties desire to promote and advertise the services described in
Master Agreement (the "Services") to HHC's customers; and,
WHEREAS, CAIS desires to contribute funds for such promotions and advertising;
and
NOW, THEREFORE, the parties acknowledge and agree as follows:
1. Corporate Incentive Payments. An Incentive Payment shall be paid
----------------------------
to HHC based on the number of corporate owned or managed Hotels
that participate in the Services during the term of the Agreement
as provided below:
a. For each corporate owned or managed Hotel Property having 1,000
or greater Guest Rooms (a current example of which is listed on
Schedule 1), HHC shall be eligible for the Incentive Plan
Payments set forth below in years 3-5. The parties agree that
HHC shall from time to time update Schedule 1 to include all
HHC corporate owned or managed hotel properties. HHC will
notify CAIS if there are changes to Schedule 1.
b. For corporate owned or managed Hotel Properties having fewer
than 1,000 Guest Rooms, HHC shall be eligible for the Incentive
Plan Payments in years 4-5. The parties agree that HHC shall
from time to time update Schedule 1 to include all HHC
corporate owned or managed hotel properties.
c. The Incentive Payment percentage within each size category
shall be multiplied by the aggregate Usage Fees (as defined in
paragraph 4 of Master Agreement) for the participating
corporate owned or managed hotels in that size category, and
the resulting total shall be paid directly to HHC at its
offices in Beverly Hills on the fifteenth (15th) day of each
month applicable to the month immediately preceding.
d. For purposes of the Payment Matrix below, the participation
percentage
1
<PAGE>
shall be based on (i) corporate owned or managed Hotels in a
particular Room Size category that are operating the Service
during the month for which the incentive payment would apply, as a
percentage of (ii) all corporate owned or managed Hotels in that
Room Size Category.
Corporate Incentive Payment Matrix
----------------------------------
Corporate Owned or Managed Hotel Properties Operating the
Service as Percentage of all Schedule 1 Corporate Owned or
Managed Hotel Properties in Size Category
*% *% *%
-------------------------------------------
Incentive
---------
Room Size
---------
1,000 and greater *% *% *%
500 - 1,000 *% *% *%
300 - 500 *% *% *%
299 and fewer *% *% *%
2. Marketing and Administration Fund. In a manner approved by HHC,
---------------------------------
CAIS shall set up an account (The "Account") to pay advertising
and administration costs and fees incurred by HHC and third
parties as mutually approved HHC and CAIS. CAIS shall provide
funds for the Account with monthly contributions as follows:
a. For any 1,000 and greater Room Size Hotels (e.g. owned, managed
or franchised), (i) during the first 2 Years of the term
following installation and deployment of Service at such Hotel,
$* per month for each wired Guest Room and Meeting Room (up to
a maximum of 200 rooms per hotel), (ii) during the subsequent 3
Years of the term, $* per month for each wired Guest Room and
Meeting Room (up to a maximum or 200 rooms per hotel);
b. For all other participating Hotels, during the first 2 Years of
the term following installation and deployment of the Service
at such Hotel Property, $* per month for each wired Guest Room
and Meeting Room (up to a maximum of 200 rooms per hotel).
---------------------
* Confidential Treatment Requested. The redacted material has been separately
filed with the Commission.
2
<PAGE>
c. For each participating Hotel that is not corporate owned or
managed, during years 3 through 5, in the event the occurrence or use by
customers in Guest Rooms (only) meets or exceeds * (*%) percent with respect to
wired Guest Rooms at such Hotel, $ * per month per wired Guest and Meeting
Room (up to maximum of 200 rooms per Hotel) during each month such *% rate is
achieved.
Monthly contributions would be due and payable to the Account from CAIS by
the 15th of the month applicable to the month immediately preceding. The
marketing program would be administered by CAIS with HHC's prior written
approval, to ensure that advertising content is consistent with the content of
each Parties' advertising program. Each party shall have the right to review and
approve the program's advertising and marketing materials for this purpose. The
advertising fund shall be used by the Parties exclusively for purposes of
promoting and marketing the CAIS service.
3. Marketing and Public Relations.
------------------------------
a. Public Relations Program. The Parties agree to implement a
------------------------
joint public relations program including a series of joint
press release, media interviews, and on-going handling of media
inquiries, as determined and mutually agreed to by the
Parties. This program is to include the joint announcement of
the Parties Agreement through traditional press releases,
postings on each Party's web site(s), and the establishment of
appropriate hyperlinks between both Parties' web sites.
b. HHC shall be permitted to identify the Services in HHC's
marketing and related material to promote the Services. Except
for such use and for use for the purposes of identification of
the Services, no right, title, interest, or license in or to
any trademark for service mark of either party or of its
agents, subcontractors, representatives, affiliates and/or of
any third party involved with any aspect of the Service is
granted to the other party under this Agreement. CAIS shall be
permitted to identify the participating Hotels as "OverVoice
Hotels" in marketing and related material to promote the CAIS'
services. Except as provided herein, no party may otherwise use
the name, logos, trade names, service marks, trademarks,
printed materials, or art work of any other party, or of any
third party, in any promotional or advertising material without
the prior consent of such party or such third party.
4. MISCELLANEOUS
--------------------
a. This Agreement is made subject to all local, state and
federal laws and
* Confidential Treatment Requested. The redacted material has been separately
filed with the Commission.
3
<PAGE>
regulations now or hereafter in force, and shall not be modified or extended
(other than as set forth herein) except by an instrument duly signed by HHC and
CAIS and approved by HHC. Waiver of a breach of any provisions hereof under any
circumstances will not constitute a waiver of any subsequent breach of such
provision or of a breach of any other provision of this Agreement.
b. HHC and CAIS represent and warrant to each other that no
broker is involved in connection with this transaction and each party agrees to
indemnify and hold the other harmless from and against the claims of any broker
(if any), made in connection with this transaction.
c. This Agreement shall be governed by and constructed in
accordance with the laws of the state of California.
d. This Agreement shall be binding upon the parties, and their
permitted successors and assigns.
e. HHC and CAIS agree to do any further acts and execute such
additional documents as the other may reasonably require to confirm this
Agreement and carry out the purpose of this Agreement.
5. SEVERABILITY
------------
It is agreed that if any provision of this Agreement shall be determined
to be void by any court of competent jurisdiction, then such determination shall
not affect any other provision of this Agreement and all such other provisions
shall remain in full force and effect, and it is the intention of the parties
hereto that if any provision of the license is capable of two constructions, one
of which would render the provision void and the other of which would render the
provision valid, then the provision shall have the meaning which renders it
valid.
6. DISPUTE RESOLUTION
------------------
A. If there is any dispute, claim or controversy, other than one
involving HHC's right to seek equitable relief, between the parties arising out
of or relating to this Agreement (a "Disputed Matter"), the parties shall
attempt to amicably resolve such Disputed Matter in good faith. If the initial
efforts to resolve such Disputed Matter are not successful, the parties shall
submit the Disputed Matter jointly to the respective senior officers of HHC and
CAIS. If such senior officers cannot reach a mutually agreeable resolution of
the Disputed Matter within ten (10) business days after reference of the matter
to them, either party may elect to have the Disputed Matter settled in
accordance with the arbitration procedures detailed in Paragraph B attached
hereto. Without limiting the generality of the foregoing, the parties expressly
agree that any and all disagreements regarding whether an issue is a Disputed
Matter under this Section shall
4
<PAGE>
be settled in accordance with the arbitration procedures defined in Paragraph B.
B. Arbitration Procedures
----------------------
(i) Rules Jurisdiction. Any Disputed Matter (as defined in the
------------------
agreement in which this exhibit is attached) shall be settled by final and
binding arbitration in the City of Los Angeles, California, and, except as
herein specifically stated, in accordance with the commercial arbitration rules
of the American Arbitration Association ("AAA Rules") then in effect, subject to
the provisions of the United States Arbitration Act 9 U.S.C. and 1 et seq.
-------
("Title 9"). To the extent the AAA Rules conflict with, or are supplemented by,
the provisions of Title 9, the provisions of Title 9 shall govern over any
conflicting rules that may now or hereafter be contained in either the AAA Rules
or Title 9. Any judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction of the subject matter thereof. The
arbitrators shall have the authority to grant any equitable and legal remedies
that would be available in any judicial proceeding instituted to resolve a
disputed matter. The parties hereby submit to the in personam jurisdiction of
-- --------
the Superior Court of Los Angeles County and the Federal District Court for the
Central District of California for purposes of confirming any such award and
entering judgment thereon.
(ii) Compensation of Arbitrators. Any such arbitration shall be
---------------------------
conducted before a panel of three arbitrators who shall be compensated for their
services at a rate to be determined by the parties or by the American
Arbitration Association but based upon normal and reasonable hourly or daily
consulting rates for the neutral arbitrator in the event the parties are not
able to agree upon his or her rate of compensation.
(iii) Selection of Arbitrators. Within five (5) business days of notice
------------------------
by a party seeking arbitration under this provision, the party requesting
arbitration shall appoint one person as an arbitrator and within fifteen (15)
business days thereafter the other party shall appoint the second arbitrator.
Except with the other party's prior, express and written consent, no arbitrator
may be appointed who is employed by, or who is engaged by, or who has been
engaged within one (1) year by, any entity that is a major competitor of either
party. Within twenty (20) business days after the appointment of the second
arbitrator, the two arbitrators so chosen shall mutually agree upon the
selection of the third impartial and neutral arbitrator. The majority decision
of the arbitrators will be final and conclusive upon the parties hereto.
(iv) Payment of Costs. Each party hereby agrees to pay one-half (1/2)
----------------
of the compensation to be paid to the arbitrators in any such arbitration and
one-half (1/2) of the costs of transcripts and other expenses of the arbitration
proceedings; provided, however, that the prevailing party in any arbitration
shall be entitled to an award of reasonable attorneys' fees and costs,
arbitrators' fees and costs, fees and costs of expert witnesses and all other
costs of arbitration to be paid by the losing party.
5
<PAGE>
(v) Evidence and Discovery. The parties shall be entitled to conduct
----------------------
discovery proceedings to the fullest extent permissible under California law and
the Federal Rules of Evidence.
(vi) Burden of Proof. For any claim submitted to arbitration, the
---------------
burden of proof shall be as it would be if the claim were litigated in a
judicial proceeding. All testimony of witnesses shall be taken under oath and
shall be subject to the Federal Rules of Evidence.
(vii) Judgement. Upon the conclusion of any arbitration proceedings,
---------
hereunder, the arbitrators shall render findings of fact and conclusions of law
and a written opinion setting forth the basis and reasons for any decision
reached by them and shall deliver such documents to each party to the Agreement
along with a signed copy of the award.
(viii) Terms of Arbitration. The arbitrators chosen in accordance with
--------------------
these provisions shall not have the power to alter, amend or otherwise affect
the terms of these arbitration provisions or the provisions of the Agreement.
(ix) Exclusive Remedy. Except as specifically provided in this
----------------
Agreement, arbitration shall be the sole and exclusive remedy of the parties for
any disputed matter arising out of such agreement.
(x) Arbitration Confidential. Neither party will disclose the
------------------------
existence of any arbitration proceedings hereunder, nor the
outcome thereof, except: (i) insofar as such disclosure is
reasonably necessary to carry out and make effective the terms of
this Agreement, including without limitation, pleadings or other
documents filed seeking entry of judgement upon an award of the
arbitrators; (ii) insofar as a party hereto is required by law to
respond to any demand for information from any court,
governmental entity, or governmental agency, or as may be
required by federal or state securities laws; (iii) insofar as
disclosure is necessary to be made to a party's independent
accountants for tax or audit purposes; (iv) insofar as disclosure
is necessary to be made to a party's attorneys for purposes of
rendering advice or services relating to this Agreement; and (v)
insofar as the parties may mutually agree in writing.
6
<PAGE>
7. TERM
----
This Agreement shall commence and terminate on the same dates the Master
Agreement commences and terminates.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of date first above written.
Hilton Hotels Corporation, CAIS, Inc.,
a Delaware corporation a Virginia corporation
By: /s/ [SIGNATURE ILLEGIBLE] By: /s/ Laura A. Newman
--------------------------- ---------------------------
Laura A. Newman
--------------------------- ---------------------------
Its: Senior Vice President Its: Vice President
---------------------------
7
<PAGE>
Schedule 1 to Marketing/Administration Fund and Incentive (the "Agreement")
dated December 23, 1998, by and between Hilton Hotels Corporation. a Delaware
corporation ("HHC), and CAIS, Inc., a Virginia corporation ("CAIS).
List of Hotels Corporate Owned or Managed
-----------------------------------------
Legal Name City State Country Total Rooms
---------- ---- ----- ------- -----------
MORE THAN 1000 ROOMS
Hilton Hawaiian Village Honolulu HI US 2545
Hilton New York & Towers New York NY US 2040
Hilton San Francisco & Towers San Francisco CA US 1896
Palmer House Hilton Chicago IL US 1639
Hilton New Orleans Riverside New Orleans LA US 1600
Hilton Anaheim & Towers Anaheim CA US 1572
Hilton Chicago & Towers Chicago IL US 1544
The Waldorf-Astoria New York NY US 1380
Hilton Waikoloa Village Waikoloa HI US 1240
Hilton Los Angeles Airport Los Angeles CA US 1236
Hilton Atlanta & Towers Atlanta GA US 1222
Fontainebleau Hilton Resort & Towers Miami Beach FL US 1206
Hilton Washington & Towers Washington DC US 1118
500 - 999 ROOMS
Hilton Chicago O'Hara Airport Chicago IL US 853
Hilton Minneapolis & Towers Minneapolis MN US 821
Hilton in the WALT DISNEY WORLD Resort Lake Buena Vista FL US 814
Hilton Pittsburgh & Towers Pittsburgh PA US 713
Pointe Hilton South Mountain Resort Phoenix AZ US 638
Hilton Anchorage Anchorage AK US 591
Pointe Hilton Tapatio Cliffs Resort Phoenix AZ US 585
Hilton Beverly Hills Beverly Hills CA US 581
Pointe Hilton Squaw Peak Resort Phoenix AZ US 563
Millenium Hilton Next to the World Trade Center New York NY US 561
Capital Hilton Washington DC US 544
Hilton Atlanta Airport & Towers Atlanta GA US 503
Hilton Miami Airport & Towers Miami FL US 500
300 - 499 ROOMS
Hilton Burbank Airport & Convention Center Burbank CA US 486
Hilton Turtle Bay Resort Kahuku-Oahu HI US 485
Hilton Palacio del Rio San Antonio TX US 481
Hilton McLean Tysons Corner McLean VA US 458
Hilton Portland Portland OR US 455
Hilton Rye Town Rye Brook NY US 437
Hilton Charlotte & Towers Charlotte NC US 407
Hilton East Brunswick & Towers East Burnswick NJ US 405
Hilton DFW Lakes Executive Conference Center Grapevine TX US 395
Hilton Long Beach Long Beach CA US 393
Hilton Newark Airport Elizabeth NJ US 375
Hilton Oakland Airport Oakland CA US 363
Hilton San Diego Resort San Diego CA US 357
<PAGE>
All'l Tower at the Hilton Hawaiian Village Honolulu, Oahu HI US 348
Hilton New Orleans Airport Kenner LA US 317
Hilton Short Hills Short Hills NJ US 301
LESS THAN 299 ROOMS
Hilton Pasadena Pasadena CA US 291
Hilton Tarrytown Tarrytown NY US 246
Hilton Suites Anaheim Orange Orange CA US 230
Hilton Suites Phoenix Phoenix AZ US 226
Hilton Suites Auburn Hills Auburn Hills MI US 224
Hilton Suites Oakbrook Terrace Oakbrook Terrace IL US 212
Hilton Suites Brentwood Brentwood TN US 203
The Waldorf Towers New York NY US 198
Hilton Inn Southfield Southfield MI US 195
Hilton Seattle Airport Seattle WA US 173
The Fontainbleau Towers Miami Beach FL US
List of Hotels Franchised.
-------------------------
MORE THAN 1000 ROOMS None
590 - 999 Rooms
Hilton Sandestin Beach & Golf Resort Destin FL US 598
Hilton Washington Duiles Airport Herndon VA US 598
Hilton Parsippany Parsippany NJ US 510
300 - 400 ROOMS
Hilton Milwaukee City Center Milwaukee WI US 478
Hilton Universal City & Towers Universal City CA US 469
Hilton Baltimore & Towers Baltimore MD US 439
Hilton Clearwater Beach Resort Clearwater FL US 426
Hilton Guadalajara Guadalajara MX 422
Hilton Arlington Park Arlington Heights IL US 420
Hilton Cherry Hill Cherry Hill NJ US 408
Hilton Montreal Bonaventure Montreal CA 395
Hilton Fort Lauderdale Airport Dania Beach FL US 388
Hilton Hartford Hartford CT US 388
Hilton Crystal City at National Airport Arlington/Crystal VA US 386
Hilton San Antonio Airport & Conference Center San Antonio TX US 386
Hilton Boston Back Bay Boston MA US 385
Hilton Inn Sunnyvale Sunnyvale CA US 372
Hilton Torrance/South Bay Torrance CA US 371
Hilton Springfield Springfield IL US 367
Hilton Salk Lake City Salt Lake City UT US 362
Hilton San Jose & Towers San Jose CA US 354
Hilton San Diego Mission Valley San Diego CA US 350
Hilton Kansas City Airport Kansas City MO US 347
Hilton Harrisburg & Towers Harrisburg PA US 341
Hilton Valley Forge King of Prussia PA US 340
Hilton North Raleigh Raleigh NC US 338
Hilton Woodcliff Lake Woodcliff Lake NJ US 336
Hilton St. Petersburg St. Petersburg FL US 333
Hilton Philadelphia Airport Philadelphia PA US 331
<PAGE>
Hilton Sacramento Arden West Sacramento CA US 331
Hilton Concord Concord CA US 330
Hilton JFK Airport Jamaica NY US 330
Hilton Lafayette & Towers Lafayette LA US 327
Hilton Oceanfront Resort Hilton Head Island Hilton Head SC US 323
Hilton Orlando/Altamonte Springs Altamonte FL US 322
The Seelbach Hilton Louisville Louisville KY US 321
Hilton Woodland Hills & Towers Woodland Hills CA US 318
Hilton Knoxville Knoxville TN US 317
Hilton Newark/Freemont Newark CA US 315
Hilton Dallas Parkway Dallas TX US 310
Hilton Arlington Arlington TX US 309
Hilton Lisle/Naperville Lisle IL US 309
Hilton Ontario Airport Ontario CA US 309
Hilton Denver Tech South Englewood CO US 305
Hilton Houston Hobby Airport Houston TX US 305
Hilton College Station & Conference Center College Station TX US 303
Windsor Hilton Windsor ON CA 303
Hilton Huntington Melville NY US 302
Hilton Gaithersburg Gaithersburg MD US 301
Hilton Wichita Airport Executive Conference Center Wichita KS US 301
Hilton Baton Rouge Baton Rouge LA US 300
Hilton Minneapolis/St Paul. Airport Bloomington MN US 300
Less Than 299 Rooms
Hilton Fort Lauderdale/Sunrise Sunrise FL US 297
Hilton Cocoa Beach Oceanfront Cocoa Beach FL US 296
Hilton Charleston North North Charleston SC US 296
Meadowlands Hilton Secaucas NJ US 296
Hilton Houston Westchase & Towers Houston TX US 294
Hilton Marco Island Beach Resort Marco Island FL US 294
Hilton Pleasanton at The Club Pleasanton CA US 294
Hilton Tulsa Southern Hills Tulsa OK US 294
Hilton Houston Southwest Houston TX US 292
Hilton Jacksonville & Towers Jacksonville FL US 292
Hilton Waterfront Beach Resort Huntington Beach CA US 290
Hilton Irvine/Orange County Airport Irvine CA US 289
Hilton Salt Lake City Airport Salt Lake City UT US 287
Hilton Beaumont Beaumont TX US 284
Hilton Greensboro Greensboro NC US 281
Hilton Jackson & Conference Center Jackson MS US 278
Hilton Huntsville Huntsville AL US 277
Hilton Atlanta Northeast Norcross GA US 272
Hilton Eugene & Conference Center Eugene OR US 272
Hilton El Paso Airport El Paso TX US 271
Hilton Wilmington/Christiana Newark DE US 266
Hilton Albuquerque Albuquerque NM US 264
Hilton East Memphis Memphis TN US 264
Hilton St. Louis Frontenne St. Louis MO US 264
<PAGE>
Hilton Inn Little Rock Little Rock AR US 263
Hilton Mesa Pavilion Mesa AZ US 263
Hilton Palm Springs Resort Palm Springs CA US 260
Hilton Greenville & Towers Greenville SC US 256
Hilton Phoenix Airport Phoenix AZ US 255
Hilton Newark Gateway Newark NJ US 253
Hilton San Bernardino San Bernardino CA US 251
Hilton Fort Wayne Convention Center Fort Wayne IN US 250
Hilton Scottsdale Resort & Villas Scottsdale AZ US 250
Hilton Dedham Place Dedham MA US 249
Hilton Midland & Towers Midland TX US 249
Hilton Norfolk Airport Norfolk VA US 249
Hilton Palm Beach Airport West Palm FL US 247
Hilton Savannah DeSoto Savannah GA US 246
Hilton Sonoma County/Santa Rosa Santa Rosa CA US 246
Hilton San Diego/Del Mar Del Mar CA US 245
Hilton Springfield Springfield VA US 245
Hilton Northbrook Northbrook IL US 244
Hilton Charlotte University Place Charlotte NC US 243
Hilton Houston Nassau Bay & Marina Houston TX US 243
Hilton Danbury & Towers Danbury CT US 242
Hilton Novi Novi MI US 239
Hilton Tampa Airport Westshere Tampa FL US 238
Hilton Melbourne Airport Melbourne FL US 237
Hilton Seattle Seattle WA US 237
Hilton Fort Lee at the George Washington Bridge Fort Lee NJ US 236
Hilton Knoxville Airport Aicoa TN US 236
Hilton Fayetteville Fayetteville AR US 235
Hilton Tucson East Tucson AZ US 233
Hilton Grand Rapids Airport Grand Rapids MI US 226
Hilton Port of Los Angeles/San Pedro San Pedro CA US 226
Hilton Allentown Allentown PA US 224
Hilton Carson Civic Plaza Carson CA US 224
Hilton Atlanta Northwest Atlanta GA US 222
Hilton Deerfield Beach/Boca Raton Deerfield Beach FL US 221
Hilton Inn North Little Rock Riverfront North Little AR US 220
Hilton St. Louis Airport St. Louis MO US 220
Hilton Oklahoma City Northwest Oklahoma City OK US 218
Hilton Lake Lanier Islands Lake Lanier GA US 216
Hilton Daytona Beach Oceanfront Resort Daytona Beach FL US 214
Hilton Toledo Toledo OH US 213
Hilton Arlington & Towers Arlington VA US 209
Hilton Greater Cincinnati Airport Florence KY US 206
Hilton Monterey Monterey CA US 204
Hilton Akron/Fairlawn Akron OH US 203
Hilton Las Crucas Las Crucas NM US 203
Hilton Whittier Whittier CA US 202
Hilton Hot Springs Convention Center Hot Springs AR US 200
<PAGE>
Hilton Waco Waco TX US 199
Hilton Southbury Southbury CT US 193
Hilton Woodbridge Iselin NJ US 198
Hilton Ocala Ocala FL US 197
Hilton Durham Durham NC US 194
Hilton Washington Embassy Row Washington DC US 193
Hilton Sioux City Sioux City IA US 193
Hilton Cleveland South Cleveland OH US 191
Hilton Wilmington North Claymont DE US 190
Hilton Santa Maria Santa Maria CA US 190
Hilton Austin North & Towers Austin TX US 189
Hilton Northfield Troy MI US 186
Hilton Mystic Mystic CT US 184
Hilton Houston Plaza Houston TX US 181
Hilton Bellevue Bellevue WA US 180
Hilton Lake Placid Resort Lake Placid NY US 179
Hilton Oshkosh & Convention Center Oshkosh WI US 179
Hilton Charlotte Executive Park Charlotte NC US 178
Hilton Key West Resort & Marina Key West FL US 178
Hilton Wilmington Riverside Wilmington NC US 178
Hilton Oak Lawn Oak Lawn IL US 178
Interstone Partners I, LLP Columbus GA US 177
Hilton Minneapolis North Brooklyn MN US 176
Hilton Suites Lexington Green Lexington KY US 174
Hilton Akron Akron OH US 173
Hilton Pikesville Baltimore MD US 171
Hilton Canton Canton OH US 170
Hilton Lynchburg Lynchburg VA US 167
Houston West Hilton Inn Houston TX US 165
Hilton Milwaukee River Milwaukee WI US 163
Oxnard Hilton Inn Oxnard CA US 160
Hilton Richmond Airport Sandston VA US 160
Hilton Santa Fe Santa Fe NM US 157
Hilton Columbia Columbia MD US 152
Hilton Suites Detroit Metro Airport Romulus MI US 151
Hilton Pearl River Pearl River NY US 150
Hilton Galveston Island Resort Galveston TX US 149
McAllen Airport Hilton Inn McAllen TX US 149
Hilton Greenville Greenville NC US 141
Hilton Palm Beach Oceanfront Resort Palm Beach FL US 134
Hilton Charleston Harbor Resort Mount Pleasant SC US 131
Hilton Mexico City Airport Mexico City MX 129
Hilton Tampa Bay/North Redington Beach Resort North FL US 125
Hilton Virginia Beach Oceanfront Virginia Beach VA US 124
Hilton Melbourne Beach Oceanfront Indialantic FL US 113
Hilton Longboat Key Beach Resort Longboat Key FL US 102
Hilton University of Houston Houston TX US 86
Sunset Key Guest Cottages at Hilton Key West Key West FL US 37
Resort
First Amendment to Marketing/Administration Fund and Incentive Agreement
------------------------------------------------------------------------
For good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Marketing/Administration Fund and Incentive Agreement,
dated December 23, 1998 (the "Marketing Agreement"), between Hilton Hotels
Corporation ("HHC") and CAIS, Inc. ("CAIS" ) is hereby amended as of this 23 day
of April, 1999, as follows:
1. The Marketing Agreement is amended by adding new Paragraph 1A as follows:
1A. Penetration Rate Incentive.
(i) A Penetration Rate Incentive Payment shall be paid to HHC during certain
years of the Term with respect to corporate owned or managed Hotels that
participate in the Services.
(ii) In the event the "Average Gross Revenue" (defined as (a) the gross Guest
Room Usage Fees from all Service-installed Guest Rooms at a participating
hotel divided by (b) the minimum number of Service-installed Guest Rooms at
such hotel, as defined in Paragraph 10(b) of the First Amendment to Master
License Agreement of even date herewith) at a participating corporate owned
or managed hotel exceeds $* during each such year, then HHC shall receive
as a Penetration Rate Incentive Payment, a percentage (shown in the chart
below by hotel property size) of Guest Room Usage Fees at such participating
hotel during the balance of each such year, until such time as the Average
Gross Revenue at such hotel exceeds $* per Service-installed Guest Room,
at which threshold the Penetration Rate Incentive Payment shown in
subparagraph 1(A)(iii) would instead apply.
Number of Guest Incent. Pmt. Incent. Pmt. Incent. Pmt.
Rooms Year 1 Year 2 Year 3
--------------------- ------------------ ------------------- ------------------
1,000 + *% *% *
--------------------- ------------------ ------------------- ------------------
500 - 999 *% *% *
--------------------- ------------------ ------------------- ------------------
300 - 499 *% *% *%
--------------------- ------------------ ------------------- ------------------
1 - 299 *% *% *%
--------------------- ------------------ ------------------- ------------------
(iii) In the event the Average Gross Revenue at a participating corporate
owned or managed hotel exceeds $* during each such year, then HHC shall
receive as a Penetration Rate Incentive Payment a percentage (shown in the
chart below by hotel property size) of Guest Room Usage Fees at such
participating hotel, during the balance of each such year until such time as
the Average Gross Revenue at such hotel exceeds $* per Service-installed
Guest Room, at which threshold the Penetration Rate Incentive Payment to HHC
would cease.
* Confidential Treatment Requested. The redacted material has been separately
filed with the Commission.
1
<PAGE>
Number of Guest Incent. Pmt. Incent. Pmt. Incent. Pmt.
Rooms Year 1 Year 2 Year 3
--------------------- ------------------ ------------------- ------------------
1,000 + *% *% *
--------------------- ------------------ ------------------- ------------------
500 - 999 *% *% *
--------------------- ------------------ ------------------- ------------------
300 - 499 *% *% *%
--------------------- ------------------ ------------------- ------------------
1 - 299 *% *% *%
--------------------- ------------------ ------------------- ------------------
2. The Marketing Agreement is further amended by adding new Paragraph 2A as
follows:
2A. Penetration Rate Marketing Fund Incentive.
(i) A Penetration Rate Marketing Fund Incentive Contribution shall be
contributed by CAIS to the Account referred to in Paragraph 2 during certain
years of the Term with respect to those Hotels that are not corporate owned
or managed that participate in the Services.
(ii) In the event the Average Gross Revenue at a participating hotel that is
not corporate owned or managed exceeds $* during each such year, then CAIS
shall contribute to the Account as a Penetration Rate Marketing Fund
Incentive Contribution a percentage (shown in the chart below by hotel
property size) of Guest Room Usage Fees at such participating hotel during
the balance of each such year, until such time as the Average Gross Revenue
at such hotel exceeds $* per Service-installed Guest Room, at which threshold
the Penetration Rate Marketing Fund Incentive Contribution shown in
subparagraph 2(A)(iii) would instead apply.
Number of Guest Incent. Incent. Incent.
Rooms Contribution Contribution Contribution
Year 1 Year 2 Year 3
--------------------- ------------------ ------------------- ------------------
1,000 + *% *% *
--------------------- ------------------ ------------------- ------------------
500 - 999 *% *% *
--------------------- ------------------ ------------------- ------------------
300 - 499 *% *% *%
--------------------- ------------------ ------------------- ------------------
1 - 299 *% *% *%
--------------------- ------------------ ------------------- ------------------
(iii) In the event the Average Gross Revenue at a participating hotel that is
not corporate owned or managed exceeds $* during each such year, then CAIS
shall contribute to the Account as a Penetration Rate Marketing Fund
Incentive Contribution, a percentage (shown in the chart below by hotel
property size) of Guest Room Usage Fees at such participating hotel, during
the balance of each such year until such time as the Average Gross Revenue at
such hotel exceeds $* per Service-installed Guest Room, at which threshold
the Penetration Rate Marketing Fund Incentive Contribution to the Account by
CAIS would cease.
* Confidential Treatment Requested. The redacted material has been separately
filed with the Commission.
2
<PAGE>
Number of Guest Incent. Incent. Incent.
Rooms Contribution Contribution Contribution
Year 1 Year 2 Year 3
--------------------- ------------------ ------------------- ------------------
1,000 + *% *% *
--------------------- ------------------ ------------------- ------------------
500 - 999 *% *% *
--------------------- ------------------ ------------------- ------------------
300 - 499 *% *% *%
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1 - 299 *% *% *%
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the date first above written.
Hilton Hotels Corporation, CAIS, Inc.,
a Delaware corporation a Virginia corporation
By: /s/ Dennis Koci By: /s/ William M. Caldwell, IV
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Name: Dennis Koci Name: William M. Caldwell, IV
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Title: SVP-HHC Title: President
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* Confidential Treatment Requested. The redacted material has been separately
filed with the Commission.
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