TAX SEPARATION AGREEMENT

Exhibit 10.42

TAX SEPARATION AGREEMENT

TAX SEPARATION AGREEMENT, dated as of June 30, 2004, by and among H Group Holding, Inc., a Delaware corporation (“Holding”), Hyatt Corporation, a Delaware corporation (“Hyatt”), CC-Development Group, Inc., a Delaware corporation (“Classic”), and each of their respective direct and indirect Subsidiaries. References herein to a “Party” (or “Parties”) to this Agreement, shall refer to Holding, Hyatt and Classic.

RECITALS

WHEREAS, Holding and its Subsidiaries (including Hyatt and Classic and their respective Subsidiaries, from time to time) have joined in filing consolidated federal Tax Returns and certain consolidated, combined or unitary state, local or foreign Tax Returns;

WHEREAS, Holding, Hyatt and Classic have entered into that certain Master Distribution Agreement, dated as of the date hereof (the “Distribution Agreement”), pursuant to which Holding will distribute all of the outstanding common stock in each of Classic and Hyatt to its stockholders in transactions intended to qualify for tax-free treatment under Code Section 355 (the “Classic Spin-off” and the “Hyatt Spin-off,” respectively, and collectively, the “Spin-offs”);

WHEREAS, pursuant to the Classic Spin-off, Classic and its Subsidiaries will leave the Pre-Spin-off Group;

WHEREAS, pursuant to the Hyatt Spin-off, Hyatt and its Subsidiaries will leave the Pre-Spin-off Group; and

WHEREAS, the Parties hereto wish to provide for (i) allocations of, and indemnifications against, certain liabilities for Taxes, (ii) the preparation and filing of Tax Returns and the payment of Taxes with respect thereto, and (iii) certain related matters.

NOW THEREFORE, in consideration of their mutual promises, the Parties hereby agree as follows:

When used herein the following terms shall have the following meanings:

“ Affiliated Group ” — an affiliated group of corporations within the meaning of Code Section 1504(a) for the Taxable Period or, for purposes of any state income tax matters, any consolidated, combined or unitary group of corporations within the meaning of the corresponding provisions of tax law for the state in question.

“ Classic ” — as defined in the preamble to this Agreement.

“ Classic Group ” — Classic and each corporation that joins with Classic in filing a consolidated federal income Tax Return for any Post-Closing Taxable Period. For purposes of this Agreement, the Classic Group shall exist from the beginning of the day immediately after the Distribution Date.

“ Classic Member ” — a corporation that (i) was a Pre-Spin-off Member and (ii) becomes a member of the Classic Group at the beginning of the day immediately after the Distribution Date.

“ Classic Separate Return Basis ” — the Tax liability (including any minimum tax liability), determined at the end of the Taxable Period or Straddle Period, for the Classic Members (or any specific Classic Member) computed as if such corporations were not part of the Holding Group, but rather a separate Affiliated Group with Classic as the common parent. Such computation shall be made without regard to the income, deductions (including net operating loss and capital loss deductions) and credits of any Holding Member or Hyatt Member. The income, deductions, credits, carryovers and other tax attributes of the Classic Members shall be determined in accordance with all elections used (with the exception of foreign tax credits available) by each Classic Member. In calculating Tax liability on the Classic Separate Return Basis, the separate taxable income or loss of any Classic Member shall be computed as if such member filed a separate income Tax Return for all Taxable Periods and Straddle Periods, except that such member will be allowed to include, without limitation, current capital losses, current Section 1231 losses and current charitable contribution deductions under Section 170 in the computation of its separate taxable income or loss. Such member shall not be entitled to the benefit of any carryover or carry back of any losses or deductions. Any gains or losses on inter-company transactions between Classic Members shall not be taken into account.

“ Classic Transition Services Agreement ” — that certain Transition Services Agreement of even date herewith between Hyatt and Classic.

“ Code ” — the Internal Revenue Code of 1986, as amended, or any successor thereto, as in effect for the Taxable Year in question.

“ Combined Jurisdiction ” — for any Taxable Period, any state, local or foreign jurisdiction in which a Party or a Subsidiary of a Party is included in a consolidated, combined, unitary or similar return for such state, local or foreign Tax purposes.

“ Distribution Agreement ” — as defined in the preamble to this Agreement.

“ Distribution Date ” — the single date on which the Hyatt Spin-off and the Classic Spin-Off are effected by Holding.

“ Estimated Tax Return ” — any Tax Return that is required to be filed with respect to payments of estimated Taxes.

“ Final Determination ” — (i) a decision, judgment, decree, or other order by a court of competent jurisdiction, which has become final and unappealable; (ii) a closing agreement or accepted offer in compromise under Code Sections 7121 or 7122, or comparable agreements under the laws of other jurisdictions; (iii) any other final settlement with the IRS or other Taxing Authority; or (iv) the expiration of an applicable statute of limitations.

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“ Holding ” — as defined in the preamble to this Agreement.

“ Holding Group ” — Holding and each corporation that joins with Holding in filing a consolidated federal income Tax Return for any Post-Closing Taxable Period. For purposes of this Agreement, the Holding Group shall exist from the beginning of the day immediately after the Distribution Date.

“ Holding Member ” — a corporation that (i) was a Pre-Spin-off Member and (ii) becomes a member of the Holding Group at the beginning of the day immediately after the Distribution Date.

“ Holding Transition Services Agreement ” — that certain Transition Services Agreement of even date herewith between Hyatt and Holding.

“ Hyatt ” — as defined in the preamble to this Agreement.

“ Hyatt Group ” — Hyatt and each corporation that joins with Hyatt in filing a consolidated federal income Tax Return for any Post-Closing Taxable Period or Straddle Period. For purposes of this Agreement, the Hyatt Group shall exist from the beginning of the day immediately after the Distribution Date.

“ Hyatt Member ” — a corporation that (i) was a Pre-Spin-off Member and (ii) becomes a member of the Hyatt Group at the beginning of the day immediately after the Distribution Date.

“ Hyatt Separate Return Basis ” — the Tax liability (including any minimum tax liability), determined at the end of any Taxable Period or Straddle Period, for the Hyatt Members (or any specific Hyatt Member) computed as if such corporations were not part of the Holding Group, but rather a separate Affiliated Group with Hyatt as the common parent. Such computation shall be made without regard to the income, deductions (including net operating loss and capital loss deductions) and credits of any Holding Member or Classic Member. The income, deductions, credits, carryovers and other tax attributes of the Hyatt Members shall be determined in accordance with all elections used (with the exception of foreign tax credits available) by each Hyatt Member. In calculating Tax liability on the Hyatt Separate Return Basis, the separate taxable income or loss of any Hyatt Member shall be computed as if such member filed a separate income Tax Return for all Taxable Periods or Straddle Periods, except that such member will be allowed to include, without limitation, current capital losses, current Section 1231 losses and current charitable contribution deductions under Section 170, in the computation of its separate taxable income or loss. Such member shall not be entitled to the benefit of any carryover or carry back of any losses or deductions. Any gains or losses on inter-company transactions between Hyatt Members shall not be taken into account.

“ Information Return(s) ” — with respect to any corporation or Affiliated Group, any and all reports, returns, declarations or other filings (other than Tax Returns) required to be supplied to any Tax Authority.

“ IRS ” — the Internal Revenue Service.

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“ Overpayment Rate ” — the rate of interest imposed by the United States federal government on corporate overpayments of tax for the applicable period.

“ Post-Closing Straddle Period ” — with respect to any Straddle Period, the period beginning on the day after the Distribution Date and ending on the last day of such Taxable Year.

“ Post-Closing Taxable Period ” — a Taxable Year that begins after the Distribution Date.

“ Pre-Closing Straddle Period ” — with respect to any Straddle Period, the period beginning on the first day of such Taxable Year and ending on the close of business on the Distribution Date.

“ Pre-Closing Taxable Period ” — a Taxable Year that ends at or before the close of business on the Distribution Date.

“ Preliminary Transactions ” — those certain transactions occurring on or before the Distribution Date that are defined as “Preliminary Transactions” in the Distribution Agreement.

“ Pre-Spin-off Group ” — Holding and each corporation that joined with Holding in filing a consolidated federal income Tax Return for any Pre-Closing Taxable Period. For purposes of this Agreement, the Pre-Spin-off Group shall terminate at the close of business on the Distribution Date.

“ Pre-Spin-off Member ” — a corporation that was a member of the Pre-Spin-off Group immediately prior to the Spin-offs.

“ Representative ” — with respect to any person or entity, any of such person’s or entity’s directors, officers, employees, agent, consultants, accountants, attorneys and other advisors.

“ Spin-offs ” — as defined in the Preamble to this Agreement.

“ Straddle Period ” — any Taxable Year beginning before and ending after the close of business on the Distribution Date.

“ Subsidiary ” — with respect to any corporation (the “given corporation”), each corporation that is, at the time in question, controlled by the given corporation. For purposes of this definition, “control” means the possession, directly or indirectly, of the requisite ownership such that the corporations would be members of an Affiliated Group.

“ Tax(es) ” — with respect to any corporation or group of corporations, any and all taxes based upon or measured by net income, gross income or gross receipts (when levied in lieu of an income tax) or alternative minimum taxable income, regardless of whether denominated as an “income tax,” a “franchise tax” or otherwise imposed by any Taxing Authority, whether any such tax is imposed directly or through withholding, together with any interest and any penalty, addition to tax or additional amount.

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“ Taxable Period ” — either a Pre-Closing Taxable Period or a Post-Closing Taxable Period.

“ Taxable Year ” — a taxable year (which may be shorter than a full calendar or fiscal year), year of assessment or similar period with respect to which any Tax may be imposed.

“ Tax Benefit(s) ” — (i) in the case of a Tax for which a consolidated federal, or a consolidated, combined or unitary state or local, Tax Return is filed, the amount by which the Tax liability of the Affiliated Group or other relevant group of corporations is actually reduced on a “with and without” basis (by deduction, entitlement to refund, credit, offset or otherwise, whether available in the current Taxable Year, as an adjustment to taxable income in any other Taxable Year or as a carryforward or carryback and including the effect of such reduction on other Taxes), plus any interest received with respect to any related Tax refund, and (ii) in the case of a Tax for which a separate Tax Return is filed, the amount by which the Tax liability of a corporation is actually reduced on a “with and without” basis (by deduction, entitlement to refund, credit, offset or otherwise, whether available in the current Taxable Year, as an adjustment to taxable income in any other Taxable Year or as a carryforward or carryback, and including the effect of such reduction on other Taxes), plus any interest received with respect to any related Tax refund.

“ Taxing Authority ” — the IRS and any other domestic or foreign governmental authority responsible for the administration of any Tax.

“ Tax Return(s) ” — with respect to any corporation or Affiliated Group, all returns, reports, estimates, information statements, declarations and other filings relating to, or required to be filed in connection with, the payment or refund of any Tax.

“ Underpayment Rate ” — the rate of interest imposed by the United States federal government on corporate underpayments of tax for the applicable period.

(a) Preparation and Filing of Tax Returns.

(i) By Holding . Holding shall prepare and timely file (or cause to be prepared and timely filed, pursuant to the Holding Transition Services Agreement or otherwise):

(A) all Tax and Information Returns (including any Estimated Tax Returns) of the Pre-Spin-off Group and any Pre-Spin-off Member that are required to be filed on or before the Distribution Date;

(B) all Tax and Information Returns (including any Estimated Tax Returns) of the Pre-Spin-off Group or any Pre-Spin-off Member for all Pre-Closing Taxable Periods that are not required to be filed on or before the Distribution Date;

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(C) all Tax and Information Returns (including any Estimated Tax Returns) of the Pre-Spin-off Group or any Pre-Spin-off Member for all Straddle Periods that are not required to be filed on or before the Distribution Date;

(ii) By Hyatt . Hyatt shall prepare and timely file (or cause to be prepared and timely filed), all Tax and Information Returns (including any Estimated Tax Returns) of the Hyatt Group and any Hyatt Subsidiary for all Post-Closing Taxable Periods.

(iii) By Classic . Classic shall prepare and timely file (or cause to be prepared and timely filed, pursuant to the Classic Transition Services Agreement or otherwise) all Tax and Information Returns (including any Estimated Tax Returns) of the Classic Group and any Classic Subsidiary for all Post-Closing Taxable Periods.

(b) Provision of Filing Information . Each Party shall cooperate and assist the other Party in the preparation and filing of all Tax and Information Returns subject to Section 2(a)(i), including by submitting and submit to the other Parties (i) all necessary filing information and (ii) all other information reasonably requested by the other Party in connection with the preparation of such Tax and Information Returns promptly after such request.

(c) Taxable Year . Holding, Hyatt and Classic agree that, for Tax purposes, (i) the Hyatt Members and the Classic Members shall be included in the consolidated federal Tax Return of the Pre-Spin-off Group for the Taxable Year that ends at the close of business on the Distribution Date (and in all related consolidated, combined or unitary state or local Tax Returns of the Pre-Spin-off Group for or including such Taxable Year) and (ii) the Hyatt Group and each Hyatt Member, and the Classic Group and each Classic Member, shall begin a new Taxable Year for purposes of such federal and, to the extent permitted by law, state Taxes on the day after the Distribution Date. The Parties further agree that, to the extent permitted by applicable law, all federal, state or other Tax Returns shall be filed consistently with this position.

(d) Straddle Period Taxes . For purposes of this Agreement, Taxes shall be allocated between the Pre- and Post-Closing Straddle Periods, in Holding’s reasonable judgment with the consent of the appropriate Hyatt and Classic personnel, which shall not be unreasonably withheld, on the basis of the actual taxable income for each such period, determined by closing the books of the Pre-Spin-off Group at the close of business on the Distribution Date.

(e) Payment of Taxes . Subject to Section 3, Holding, on behalf of the Pre-Spin-off Members, shall pay to the appropriate Tax Authorities (i) all Taxes shown to be due and payable on all Tax Returns filed by Holding pursuant to Sections 2(a)(i)(A), 2(a)(i)(B) and 2(a)(i)(C) and (ii) all Taxes that shall thereafter become due and payable with respect to all Tax Returns filed pursuant to Sections 2(a)(i)(A), 2(a)(i)(B) and 2(a)(i)(C) as a result of a Final Determination. Hyatt and Classic shall pay all Taxes attributable to all Tax Returns filed by them pursuant to Section 2(a)(ii) or 2(a)(iii), as applicable.

(f) Tax Elections . Nothing in this Agreement is intended to change or otherwise affect any previous tax election made by or on behalf of the Pre-Spin-off Group (including the election with respect to the calculation of earnings and profits under Code

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Section 1552 and the regulations thereunder). Holding, as common parent of the Holding Group, shall continue to have discretion, reasonably exercised, to make any and all elections with respect to all members of the Pre-Spin-off Group for all Pre-Closing Taxable Periods for which it is obligated to file Tax or Information Returns under Section 2(a)(i).

(g) Refunds of Taxes .

(i) Holding shall be entitled to any refund of Taxes and any other Tax Benefits realized as a result of a Final Determination with respect to all Tax Returns filed pursuant to Section 2(a)(i); provided , however , that Holding shall reimburse Hyatt and Classic, as applicable, for the amount of any Tax refunds or other Tax Benefits, including any deposits or pre-paid Taxes, attributable to any Hyatt or Classic Member for all Pre-Closing Taxable Periods that arise as a result of a Final Determination. Any such Tax refunds or other Tax Benefits attributable to a Straddle Period shall be allocated between the Pre-Closing Straddle Period and Post-Closing Straddle Period on a basis consistent with the method used to allocate the Tax liability for such Straddle Period.

(ii) If any Party to this agreement receives a Tax refund or other Tax Benefit to which another Party to this agreement is entitled pursuant to this Agreement, such Party shall pay (in accordance with Section 4) the amount of such Tax refund or other Tax Benefit to the appropriate other Party.

(iii) In the event that on or before June 30, 2005, Holding has not received a Tax refund or other Tax Benefit from the IRS with respect to pre-1992 tax years in the amount of Thirty-Two Million Dollars ($32 million) (inclusive of interest paid by the IRS), Hyatt shall pay such amount to Holding on or before August 1, 2005. Upon receipt of a Tax refund or other Tax Benefit with respect to such tax years, Holding shall pay to Hyatt the Tax refund or other Tax Benefit received (including interest paid by the IRS) in an amount not to exceed $32 million, plus interest at the Overpayment Rate from August 1, 2005.

(iv) Notwithstanding anything to the contrary in this Section 2(g), in the event that as a result of a Final Determination, Holding realizes a Tax Benefit with respect to deductions associated with payment obligations specifically assumed from Hyatt in connection with the Spin-offs, Holding shall pay the amount of such Tax Benefit to Hyatt in accordance with Section 4.

(v) As of the date prior to the Distribution Date, Hyatt and Classic shall be liable to each Hyatt Member or Classic Member with an excess loss account within the meaning of Treasury Regulation Section 1.1502-19 for the amount of such excess loss account. Hyatt and Classic shall discharge such liability by means of contributions to the capital of such Hyatt Members or Classic Members, respectively, as soon as practicable.

(a) By Holding . Except as provided in Section 3(b) and 3(c), Holding shall indemnify and hold Hyatt and the Hyatt Group and Classic and the Classic Group harmless against any and all (i) Taxes shown as due or otherwise attributable to Taxable Years covered by all Tax Returns filed pursuant to Section 2(a)(i), (ii) Taxes attributable to the Spin-offs or the Preliminary Transactions; and (iii) each and every liability for Taxes of the Pre-Spin-off Group under Treasury Regulation Section 1.1502-6 or any similar law, rule or regulation administered by any Taxing Authority.

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(b) By Hyatt . Hyatt shall indemnify and hold Holding and the Holding