Exhibit 10.4

 

EXECUTION VERSION

 

TRANSITION SERVICES AGREEMENT

 

dated as of

 

MAY 11, 2016

 

by and among

 

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

 

and

 

INTERVAL LEISURE GROUP, INC.

 

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Table of Contents

 

 

 

Page

 

 

 

ARTICLE I DEFINITIONS

1

 

 

 

Section 1.1

Defined Terms

1

Section 1.2

Cross References

2

Section 1.3

Interpretation; Exhibits and Schedules

3

 

 

 

ARTICLE II SERVICES

4

 

 

 

Section 2.1

Provision of Services

4

Section 2.2

Cooperation; Access

5

Section 2.3

Books and Records

5

Section 2.4

Service Quality

5

Section 2.5

Uses of Services

6

Section 2.6

Location of Services

6

Section 2.7

No Violation of Laws or Third Party Contracts

7

Section 2.8

Provision of Services

7

Section 2.9

Modification of Procedures

8

Section 2.10

No Transfer of Rights

8

Section 2.11

Security

8

Section 2.12

Personally Identifiable Information

9

 

 

 

ARTICLE III FEES AND EXPENSES

9

 

 

 

Section 3.1

Service Fees

9

Section 3.2

Payment

10

Section 3.3

Taxes

10

Section 3.4

Regulatory Changes

11

 

 

 

ARTICLE IV TERM OF SERVICES

11

 

 

 

Section 4.1

Term and Cancellation of Services

11

Section 4.2

Extension of Term of Services

11

 

 

 

ARTICLE V GOVERNANCE

12

 

 

 

Section 5.1

Project Leads; Functional Leads; Disputes

12

Section 5.2

Steering Committee

12

Section 5.3

Meetings

13

Section 5.4

Audit Rights

13

 

 

 

ARTICLE VI FORCE MAJEURE

14

 

 

 

Section 6.1

Force Majeure Event

14

Section 6.2

Consequences of Force Majeure Event

14

 

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Page

ARTICLE VII LIABILITIES

14

 

 

 

Section 7.1

Limitations of Liability

14

Section 7.2

Indemnity

15

Section 7.3

Entire Obligation

16

 

 

 

ARTICLE VIII TERMINATION

16

 

 

 

Section 8.1

Term of Agreement

16

Section 8.2

Breach of Agreement

16

Section 8.3

Effect of Termination

16

Section 8.4

Survival

17

 

 

 

ARTICLE IX MISCELLANEOUS

17

 

 

 

Section 9.1

Notices

17

Section 9.2

Assignment

18

Section 9.3

Confidentiality

18

Section 9.4

Governing Law

19

Section 9.5

Consent to Jurisdiction; Waiver of Jury Trial

19

Section 9.6

Entire Agreement

20

Section 9.7

Amendments

20

Section 9.8

Waivers

20

Section 9.9

No Third Party Beneficiaries

20

Section 9.10

Severability

20

Section 9.11

Counterparts

21

 

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TRANSITION SERVICES AGREEMENT

 

This TRANSITION SERVICES AGREEMENT, dated as of May 11, 2016 (the “Effective
Date”), is entered into by and between Starwood Hotels & Resorts
Worldwide, Inc., a Maryland corporation (“Starwood”), on behalf of itself and
any of its Affiliates that are Providers hereunder and Interval Leisure
Group, Inc., a Delaware corporation (“Buyer”), on behalf of itself and any of
its Affiliates that are Recipients hereunder.  Starwood and Buyer are sometimes
hereinafter collectively referred to as the “Parties” and individually as a
“Party.”

 

WHEREAS, Starwood, Vistana Signature Experiences, Inc. (“Vistana” or “SpinCo”),
Buyer, and Iris Merger Sub, Inc., a Delaware corporation and wholly-owned
subsidiary of Buyer (“Merger Sub”), have entered into that certain Agreement and
Plan of Merger, dated as of October 27, 2015 (the “Merger Agreement”), pursuant
to which Merger Sub will merge with and into Vistana immediately following the
spin-off of Vistana to Starwood’s stockholders; and

 

WHEREAS, the Merger Agreement provides that, in connection with the consummation
of the transactions contemplated thereby, the Parties will enter into this
Agreement to provide for certain services and other arrangements among Starwood
and/or its Affiliates, on the one hand, and Buyer and its Affiliates, on the
other hand, all as more fully described herein.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the Parties agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1                                    Defined Terms.  For the purposes
of this Agreement, (a) unless otherwise defined herein capitalized terms used
herein shall have the meanings assigned to them in the Merger Agreement and
(b) the following terms shall have the meanings specified below:

 

“Agreement” means this Transition Services Agreement, including the Schedules
and Exhibits hereto.

 

“Applicable Law” means all laws, regulations, ordinances, rules, orders, decrees
and requirements of any Governmental Authority having jurisdiction over the
Services, Recipient, Provider or this Agreement, all as they may be amended from
time to time.

 

“Interest Rate” means an annual rate equal to the lesser of (i) the prime rate
(as published by the Wall Street Journal or, if no longer published, such other
similar source as reasonably selected by Starwood) applicable on the date such
payment is due and on each date thereafter that interest is compounded, plus
eight (8) percentage points and (ii) the highest rate then permitted by
Applicable Law.

 

“Personally Identifiable Information” means any information received by a party
in connection with the Services that can be associated with or traced to any
individual, including an individual’s name, address, telephone number, e-mail
address, credit card information, social

 

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security number, or other similar specific factual information, regardless of
the media on which such information is stored (e.g., on paper or electronically)
and includes certain of such information that is generated, collected, stored or
obtained as part of this Agreement, including transactional and other data
pertaining to users.

 

“Provider” means Starwood or any of its Affiliates, in such Person’s capacity as
a Person providing or causing other Persons to provide Services hereunder.

 

“Recipient” means Buyer or any of its Affiliates, in such Person’s capacity as a
Person receiving Services from a Provider hereunder.

 

“Reference Period” means the period beginning twelve (12) months prior to the
Effective Date, and ending on the Effective Date.

 

“Schedule A” means Schedule A to this Agreement.

 

“Service” or “Services” means, collectively, the Transition Services and the
Migration Services.

 

“Third Party Claims” means all claims or threatened claims, civil, criminal,
administrative, or investigative action or proceeding, demand, charge, action,
cause of action or other proceeding asserted against a party hereto and brought
by a third party.

 

“Transition Service” or “Transition Services” means (i) those services,
(ii) access to those facilities, networks, equipment and software, and
(iii) other assistance, each as listed and described on Schedule A, including
any Omitted Services added to Schedule A by amendment pursuant to
Section 2.1(b).

 

Section 1.2                                    Cross References.  Each of the
following terms is defined in the Section of this Agreement set forth opposite
such term:

 

Term

 

 

Base Service Fees

 

Section 3.1

Consent

 

Section 2.1(c)

Disclosing Party

 

Section 9.3(a) 

Dispute

 

Section 5.1(c)

Effective Date

 

Preamble

Extended Service

 

Section 4.2

Force Majeure Event

 

Section 5.1

Functional Lead

 

Section 5.1(b)

Indemnified Party

 

Section 7.2(a)

Indemnifying Party

 

Section 7.2(a)

Information

 

Section 9.3(a)

Losses

 

Section 7.1

Merger Agreement

 

Recitals

Merger Sub

 

Recitals

Migration Plan

 

Section 2.1(d)

Migration Planning Period

 

Section 2.1(d)

Migration Services

 

Section 2.1(d)

Migration Services Fee

 

Section 3.1(a)

Omitted Services

 

Section 2.1(b)

 

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Omitted Services Fees

 

Section 3.1(e)

Party / Parties

 

Preamble

Receiving Party

 

Section 9.3(a)

Recipient

 

Preamble

Recipient TSA Project Lead

 

Section 5.1(a)

Sales Taxes

 

Section 3.3

Seller

 

Recitals

Service Fees

 

Section 3.1

Service Term

 

Section 4.1

Starwood

 

Preamble

Starwood Auditors

 

Section 5.4(a)

Starwood TSA Project Lead

 

Section 5.1(a)

TSA Project Leads

 

Section 5.1(a)

 

Section 1.3                                    Interpretation; Exhibits and
Schedules.  The table of contents, titles, headings and captions contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.  Unless otherwise indicated to
the contrary herein by the context or use thereof: (a) the words “hereof,”
“hereby,” “herein,” “hereto,” and “hereunder” and words of similar import shall
refer to this Agreement as a whole and not to any particular Section or
paragraph of this Agreement; (b) the words “include,” “includes” and “including”
shall be deemed to be followed by the words “without limitation”; (c) masculine
gender shall also include the feminine and neutral genders, and vice versa;
(d) words importing the singular shall also include the plural, and vice versa;
(e) references to an “Article,” “Section,” “Schedule” or “Exhibit” shall be to
an Article or Section of, or a Schedule or Exhibit to this Agreement; (f) any
agreement, instrument or statute defined or referred to in this Agreement shall
mean such agreement, instrument or statute as from time to time amended,
supplemented or modified; (g) all Exhibits and Schedules to this Agreement are
hereby incorporated in and made a part of this Agreement as if set forth in full
herein, and any capitalized terms used in such Exhibits and Schedules and not
otherwise defined therein shall have the meaning set forth in this Agreement;
(h) “writing,” “written” and comparable terms refer to printing, typing and
other means of reproducing words (including electronic media) in a visible form;
(i) the sign “$” means the lawful currency of the United States of America;
(j) all references to “days” mean calendar days and all references to time mean
Eastern Time in the United States of America, in each case unless otherwise
indicated; and (k) derivative forms of defined terms will have correlative
meanings.  The Parties acknowledge that each Party and its attorney has reviewed
and participated in the drafting of this Agreement and that any rule of
construction to the effect that any ambiguities are to be resolved against the
drafting Party, or any similar rule operating against the drafter of an
agreement, shall not be applicable to the construction or interpretation of this
Agreement.

 

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ARTICLE II

 

SERVICES

 

Section 2.1                                    Provision of Services.

 

(a)                                 Provider shall provide to Recipient the
Services in accordance with the terms, fees, limitations and conditions set
forth herein and on Schedule A. Starwood hereby represents and warrants as of
the date hereof that Provider has not changed the level of services provided by
Provider in respect of the Vistana Business since October 27, 2015 in a manner
that reduced the level or quality of Services provided to Recipient under this
Agreement.

 

(b)                                 During the ninety (90) days after the
Effective Date, in the event that Buyer identifies in writing to Starwood any
services not referenced on Schedule A that were provided by Provider in respect
of the Vistana Business during the Reference Period and that are reasonably
necessary to operate the Vistana Business in the manner conducted as of the
Effective Date (“Omitted Services”), the Parties will promptly negotiate in good
faith the terms governing any such Omitted Service with respect to (i) the
nature and description of such Omitted Service, which shall be consistent with
the descriptions of the Services set forth on Schedule A (to the extent
applicable to such Omitted Service), (ii) the duration such Omitted Service will
be provided, which shall not be longer than the term of this Agreement and
(iii) the fees for such Omitted Service, which shall be set in the same manner
as for the other Services.  In the event the Parties agree to such terms, the
Parties will enter into an amendment to this Agreement amending Schedule A to
reflect such Omitted Service, and such Omitted Service shall be deemed to be
part of this Agreement and shall be deemed one of the “Services” hereunder from
and after the date of such amendment.  Starwood shall have no obligation to
consider any requests for services not listed on Schedule A at any time after
ninety (90) days after the Effective Date.

 

(c)                                  Provider and Recipient shall use
commercially reasonable efforts to obtain in a cost effective manner any
necessary waivers, permits, consents or similar approvals with respect to
agreements with third parties in order for Provider to provide the Services
directly or indirectly (other than the Omitted Services) (any such waiver,
permit, consent or similar approval, a “Consent”).  If after using commercially
reasonable efforts, Provider and Recipient are unable to obtain any Consent, the
Parties shall work together to agree upon, identify and implement an alternative
arrangement in a cost effective manner.  Any license fees, royalties or other
fees, costs or expenses to third parties that may be necessary for Provider to
obtain Consents in a cost effective manner or for Provider to perform, or for
Recipient to receive, the Services will be borne equally by the Recipient and
Provider, and any out-of-pocket costs and expenses reasonably incurred by
Provider in connection with the implementation of any such alternative
arrangements in a cost effective manner shall be borne by Recipient, provided,
that Provider and Recipient shall be equally responsible for the amount by which
the cost of such alternative arrangement exceeds the amount that Recipient would
have paid pursuant to Schedule A, as of the Effective Date, for the applicable
Service.  As long as Provider otherwise complies with this Section 2.1(c),
failure to obtain any Consent, and any resulting failure to provide Services
hereunder, shall not be deemed a breach hereof.

 

(d)                                 Recipient shall be responsible for planning
and preparing the transition of the provision of each of the Services to its own
internal organization or other third-party service providers, and shall prepare,
within thirty (30) days after the Effective Date (“Migration Planning Period”),
a plan in order to transition off of each Service by the end of the term for
such Service (“Migration Plan”); provided, however, that Recipient will not be
deemed to have violated its obligations with respect to preparation of the
Migration Plan if Recipient (i) fails to complete the Migration Plan within the
Migration Planning Period, (ii) has been working, and

 

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thereafter continues to work, in good faith and without undue delay to
expeditiously prepare the Migration Plan and (iii) completes the Migration Plan
no later than sixty (60) days after the Effective Date.  At Recipient’s request,
Provider shall reasonably assist, and shall use commercially reasonable efforts
to cause any third-party provider of Services to reasonably assist, Recipient in
connection with the implementation of Recipient’s transition plan (“Migration
Services”), taking into account the need to minimize the cost of such migration
and the disruption to the ongoing business activities of the Parties and their
Affiliates. For the avoidance of doubt, Migration Services shall not include any
services that, in Provider’s commercially reasonable opinion, do not primarily
effect the separation of Recipient from the Services.

 

Section 2.2                                    Cooperation; Access.  Subject to
the other provisions of this Agreement, Provider and Recipient agree to
reasonably cooperate with each other in all matters relating to the provision
and receipt of the Services.  Each Provider and Recipient shall, and shall cause
any applicable Affiliates to, make available on a timely basis to the other
information and materials requested to the extent reasonably necessary for the
purposes of providing or receiving the Services.

 

Section 2.3                                    Books and Records.  Provider
shall keep books and records relating to the provision of the Services in a
manner consistent with how such books and records were kept by Provider with
respect to the Vistana Business as of the Effective Date, subject to Provider’s
records retention policies (as such policies may be amended or otherwise
modified from time to time).  To the extent reasonably necessary for Recipient
to conduct the Vistana Business as conducted as of the Effective Date, Provider
shall make such books and records in electronic or paper form available to
Recipient, at the cost of Recipient (i) upon reasonable written notice (but no
more often than once each calendar quarter), during normal business hours,
(ii) subject to reasonably imposed security procedures and limitations and
(iii) subject to compliance with Section 8.3 (Effect of Termination).

 

Section 2.4                                    Service Quality.

 

(a)                                 Provider will provide, or cause to be
provided, the Services in accordance with Provider’s standard policies,
procedures and practices in effect with respect to the Vistana Business as of
the Effective Date, as the same may be changed from time to time.  In providing
the Services, Provider shall at all times exercise the same care and skill it
exercises in performing like services for itself and other third parties,
including franchisees.  Recipient acknowledges that Provider is not in the
business of providing the Services and is providing the Services to Recipient
solely for the purpose of facilitating the transactions contemplated by the
Merger Agreement.

 

(b)                                 Notwithstanding anything to the contrary
herein, Provider shall have the right to shut down temporarily for routine
scheduled maintenance purposes (which shall be substantially consistent with
Provider’s operations and maintenance policies as of the Effective Date) the
operation of the facilities, networks and/or systems providing any Service
whenever in its judgment, reasonably exercised, such action is necessary;
provided that Provider shall notify Recipient as much in advance as reasonably
practicable under the circumstances that such shutdown is planned, and such
shutdown shall take place outside normal business hours, or if not so possible,
during a period that does not unduly and adversely affect Recipient’s operations
to

 

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which the provision of such Service relates.  In the event nonscheduled
maintenance is reasonably necessary, Provider shall notify Recipient as much in
advance as reasonably practicable under the circumstances.  Provider shall be
relieved of its obligations to provide Services (and Recipient shall be relieved
of its obligation to pay for such affected Service(s) to the extent such
Services are not performed or have not already been performed by Provider) that
require the use of such facilities, networks or systems only for the period of
time that such facilities, networks and/or systems are so shut down but shall
use commercially reasonable efforts to minimize each period of shutdown for such
purpose and to schedule such shutdown so as not to disrupt the conduct of the
business of Recipient in the ordinary course.  Provider shall consult with
Recipient prior to temporary shutdowns to the extent reasonably practicable or,
if not reasonably practicable, immediately thereafter in order to establish
alternative sources for such Services.  To the extent commercially reasonable,
Provider will afford Recipient the benefit of any arrangements for substitute
services that Provider makes on its own behalf.

 

(c)                                  Provider shall maintain during the term of
this Agreement its corporate level business continuity/disaster recovery plan
(“Recovery Plan”), which plan shall prescribe actions to be taken with respect
to continuation and recovery of any of Provider’s computer resources and network
processes used to provide the Services.   In the event of a business disaster
with respect to Provider that disrupts any “mission critical” computer resources
or network processes used to provide the Services, Provider will use
commercially reasonable efforts to continue and recover such computer resources
and network processes within 24 hours from the occurrence of such business
disaster causing a disruption in the Services, except that Provider’s Data
Warehouse and StarwoodOne systems may require additional recovery times beyond
such 24 hour window but in no event more than a commercially reasonable
timeframe following the occurrence of such business disaster.  For purposes
hereof, “mission-critical” computer resources or network processes are those
which if not operating, would cause the cessation of, or significant adverse
impact upon, the Vistana Business.

 

(d)                                 EXCEPT AS EXPRESSLY SET FORTH IN
Section 2.4(c), THE SERVICES ARE PROVIDED ON AN “AS IS” BASIS AND PROVIDER MAKES
NO REPRESENTATIONS, WARRANTIES OR COVENANTS WITH RESPECT TO THE SERVICES,
WHETHER EXPRESS OR IMPLIED, AND ALL IMPLIED WARRANTIES, INCLUDING THOSE RELATING
TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, CUSTOM OR USAGE IN THE
TRADE AND NON-INFRINGEMENT, ARE HEREBY DISCLAIMED.

 

Section 2.5                                    Uses of Services.  Provider shall
be required to provide Services only to Recipient in connection with Recipient’s
operation of the Vistana Business substantially as conducted as of the Effective
Date.  Recipient shall not resell any Services to any Person whatsoever or
permit the use of the Services by any Person other than its Affiliates in
connection with Recipient’s operation of the Vistana Business.

 

Section 2.6                                    Location of Services.  Provider
will not be required to render any Service in a particular location that would
necessitate that Provider obtain any permits or regulatory approvals, or qualify
to do business, in any location or jurisdiction other than the locations and
jurisdictions where Provider does business or conducted business as of the
Effective Date.  Provider shall obtain and maintain the permits and regulatory
approvals required for providing the Services in good standing during the
provision of the Services; provided,

 

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however that Recipient shall reimburse Provider for all of Provider’s out of
pocket cost of maintaining such permits and regulatory approvals to the extent
such costs are incurred for the purpose of providing the Services.

 

Section 2.7                                    No Violation of Laws or Third
Party Contracts.  Neither Provider nor any third-party service providers shall
be required to provide all or any part of any particular Service to the extent
that Provider determines in good faith, that providing such Service would
require Provider or any third-party service provider to violate any Applicable
Laws, or any agreement to which a Provider is a party or would otherwise
conflict with the rights of any other party with respect thereto.  In such case,
Provider and Recipient shall work together to agree upon, identify and implement
an alternative method of delivering such Service in a cost effective manner that
does not violate any Applicable Laws or agreement or otherwise conflict with any
third party rights.  Any costs and expenses associated with such alternative
method shall be borne by Recipient, provided, that Provider and Recipient shall
be equally responsible for the amount by which the cost of such alternative
arrangement exceeds the amount that Recipient would have paid pursuant to
Schedule A, as of the Effective Date, for the applicable Service.  As long as
Provider otherwise complies with this Section 2.7, failure to arrange for an
alternative method, and any resulting failure to provide Services hereunder,
shall not be deemed a breach hereof.

 

Section 2.8                                    Provision of Services;
Independent Contractor.

 

(a)                                 Recipient acknowledges and agrees that it
has no right to require that Provider perform the Services with specifically
identified employees, provided, in all instances, Provider shall use
commercially reasonable efforts to provide the Services using either the same
employees that performed such duties as of the Effective Date, or employees of
similar skill and qualification, to perform the duties assigned to them in
connection with such Services.

 

(b)                                 Provider shall act under this Agreement
solely as an independent contractor and not as an agent, employee or joint
venture counterparty of Recipient.  All employees and representatives providing
the Services shall be under the direction, control and supervision of Provider
(and not of Recipient), and Provider shall have the sole right to exercise all
authority with respect to such employees and representatives (including the
right to select, hire, utilize and discharge such employees and representatives)
and in no event shall such employees and representatives be deemed to be
employees or agents of Recipient.

 

(c)                                  Certain of the Services will require
Recipient to make decisions based on recommendations made by Provider or
consulting or advisory Services provided by Provider.  Recipient shall be solely
responsible for making all such decisions.

 

(d)                                 Notwithstanding anything to the contrary
contained herein, Provider shall not be liable under this Agreement for
(i) failing to provide or make available a Service as set forth herein if such
failure was the result of personnel of Provider performing the Services in
accordance with instructions provided by Recipient’s Functional Lead or designee
of such Functional Lead (as previously identified by Recipient’s Functional Lead
to a Starwood Functional Lead), (ii) the exercise of reasonable discretion and
independent judgment in the provision of administrative Services (such as data
entry, data management, processing requests and preparing and processing forms)
or (iii) any decisions made by Recipient with respect to any consulting or
advisory Services.

 

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Section 2.9                                    Modification of Procedures.

 

(a)                                 Provider shall be entitled to make changes
from time to time in the manner in which it performs any of the Services;
provided that (i) Provider has furnished Recipient notice (the same notice
Provider provides its own business) thereof; (ii) Provider changes such
practices and procedures for its own business units at the same time; and
(iii) Provider gives Recipient a reasonable period of time for Recipient to
(A) adapt its operations to accommodate such changes or (B) reject such changes.
In the event Recipient fails to accept or reject a proposed change on or before
a reasonable date specified in such notice of change, such failure shall be
deemed to be an acceptance of such change.  In the event Recipient rejects a
proposed change but does not terminate this Agreement, Recipient agrees to pay
any reasonable expenses resulting from Provider’s need to maintain different or
multiple versions of the same system, procedures, technologies, or services or
resulting from requirements of their third party vendors.

 

(b)                                 In the event Recipient makes a change to its
technology environment, software or hardware that renders Provider incapable of
providing the Services or Recipient incapable of using the Services, Provider’s
performance with respect to such affected Service(s) shall be excused, and
Recipient shall be relieved of its obligation to pay for such affected
Service(s) to the extent such Services are not performed or have not already
been performed by Provider, until Recipient has modified its technology to
correct the problem.

 

Section 2.10                             No Transfer of Rights.  Recipient
acknowledges that it will acquire no right, title or interest (including any
license rights or rights of use) in any firmware or software, and the licenses
therefor which are held by Provider, by reason of the provision of the Services
provided hereunder, except to the extent that any such license rights or rights
of use are provided for in a written agreement signed by Provider and Recipient.

 

Section 2.11                             Security.

 

(a)                                 Provider and Recipient shall each maintain
reasonable, current security measures (i) to prevent unauthorized access to its
systems and (ii) with respect to all data contained in its facilities, networks
and systems and used in connection with the Services.  Such measures shall in no
event be less stringent than those used to safeguard such party’s own property,
or industry standard security measures used by companies of a similar size. 
Such measures shall include, where appropriate, use of updated firewalls, virus
screening software, logon identification and passwords, encryption, intrusion
detection systems, logging of incidents, periodic reporting, and prompt
application of current security patches, virus definitions and other updates. 
Recipient shall not install any new equipment, software or technology or modify
the setup of any existing equipment, software or technology that is, or will be,
connected to Provider’s facilities, networks or systems without the prior
consent of Provider.

 

(b)                                 Provider may suspend Recipient’s access (if
any) to the information technology or communications systems used by Recipient
following advance written notice to the extent practicable if, in Provider’s
reasonable opinion (i) the integrity, security or performance of its systems, or
any data stored on them, is being or is likely to be jeopardized by the
activities of Recipient, or (ii) continued access to those information
technology or communications systems by Recipient would expose Provider to
liability.

 

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(c)                                  Each Party reserves the right to terminate
the Agreement, in its sole discretion and without limitation or termination
liability, if the Recipient or Provider, as applicable, remains in breach of
this Section 2.11 five (5) Business Days after receipt of notice of such
breach.  Provider and Recipient acknowledge that the security measures used by
the other as of the Effective Date of this Agreement are in compliance with this
Section.

 

Section 2.12                             Personally Identifiable Information. 
Each party will comply with all applicable privacy and other laws and
regulations relating to protection, collection, use, and distribution of
Personally Identifiable Information.  In no event may a party sell or transfer
Personally Identifiable Information to third parties other than its Affiliates,
or otherwise provide third parties other than its Affiliates with access
thereto, except (i) as may be allowed pursuant to other written agreements
between the Parties, or (ii) in the case of Provider, with any of its
third-party service providers assisting Provider with the performance of the
Services hereunder.  If there is a suspected or actual breach of security
involving Personally Identifiable Information, responsible party will notify the
other party’s Privacy counsel within twenty four (24) hours of a
management-level associate becoming aware of such occurrence.

 

ARTICLE III

 

FEES AND EXPENSES

 

Section 3.1                                    Service Fees.  In consideration
for the provision of the Services, Recipient will pay Provider the fees for each
Service specified on Schedule A, which fees are inclusive of an administrative
service fee (the “Base Service Fees”); provided that the Base Service Fees for
each Service shall be increased by five percent (5%) each year effective as of
the anniversary of the Effective Date.  The Base Service Fees, as may be
adjusted in accordance with this Article III, together with the Migration
Services Fees and any Omitted Services Fees, are referred to herein as the
“Service Fees.”

 

(a)                                 The Migration Services, and any assistance
in the planning of such Migration Services, shall be provided to Recipient
(i) at rates established using the methodology set forth on Schedule B, and
(ii) with respect to any Migration Services provided by any third-party service
providers, at a cost equal to the actual out of pocket payments made by Provider
or its Affiliates to such third-party service provider for performing such
Services (the “Migration Services Fees”).

 

(b)                                 Except to the extent otherwise set forth on
Schedule A or Schedule B, the Services Fees shall be exclusive of (and Recipient
shall pay to Provider) any reasonable, out-of-pocket expenses incurred related
to travel (including long-distance and local transportation, accommodation and
meal expenses and other incidental expenses) by Provider’s personnel in
connection with performing the Services.

 

(c)                                  Notwithstanding anything to the contrary
contained herein, any Services to be performed by a third-party service provider
shall be provided to Recipient at a cost equal to the actual out of pocket
payments made by Provider or its Affiliates to such third-party service provider
for performing such Services (it being understood, for the avoidance of doubt,
that such third party service provider may include a mark-up in what it charges
to Provider and its Affiliates).

 

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(d)                                 Recipient shall be responsible for, and
Provider shall not be required to use or advance its own funds for, any payment
obligation of Recipient (including employee compensation payments, employee
benefit payments and payments to fund checks issued or wire transfer payments
made on behalf of Recipient).

 

(e)                                  Unless otherwise agreed by the Parties, the
Service Fees for any Omitted Services will be determined by Provider on a
pass-through, fully-burdened cost basis, with a fifteen percent (15%) mark-up,
including the allocable cost of any Person performing such activities (the
“Omitted Services Fees”).

 

(f)                                   Any Extended Service shall be provided to
Recipient at the adjusted Base Service Fee set forth on Schedule A for such
extension.

 

Section 3.2                                    Payment.  Recipient shall
compensate Provider only for Services actually provided pursuant to this
Agreement.  Invoices will be rendered each month by Provider to Recipient for
the Service Fee for Services delivered during the preceding month and for any
other sums due under Sections 2.1, 2.3, 3.3, 2.7, and 5.2 and Article IV.  If
any Services are provided by Provider for only part of a calendar month, then
any monthly Services Fees applicable for such month will be prorated for the
portion of such month in which the Services were actually provided.  Each such
invoice shall set forth in reasonable detail a description of such Services and
the amounts charged therefor.  Recipient shall pay all invoiced amounts, which
are not disputed, in immediately available funds within thirty (30) days after
the date of the invoice.  If Recipient in good faith disputes an invoice, it
must notify Provider in writing of the dispute within thirty (30) days after
receipt of the relevant invoice specifying in detail the reason why Recipient
disputes the invoice.  Any undisputed amounts not paid within such 30-day period
shall be subject to interest from the due date until the date of payment,
compounded monthly, at the Interest Rate.  If Recipient disputes an invoiced
amount in good faith and such amount is thereafter determined to be due and
payable, then the foregoing late charges will apply retroactively to the
original due date after which such disputed amounts became delinquent.  Without
limiting any of its other rights and remedies hereunder, Provider may suspend
performance of any Services in the event that Recipient fails to timely pay any
undisputed amounts due under this Agreement within fifteen (15) days after
written notice of non-payment from Provider is received following the end of the
30-day period reflected in such notice.  Recipient may not deduct, set-off,
counterclaim or otherwise withhold any amount owed to it by Provider (on account
of any obligation owed by Provider, whether or not such obligation has been
finally adjudicated, settled or otherwise agreed upon in writing) against the
fees or other amounts payable or expenses owed by such Recipient to Provider
pursuant to this Agreement.

 

Section 3.3                                    Taxes.  Recipient shall pay all
applicable federal, state, local or foreign Taxes (including sales, use,
value-added, and other similar transaction-based Taxes), duties and tariffs and
all other Taxes or charges imposed on the provision of the Services by Provider,
except for taxes based on net income of Provider (collectively, “Sales Taxes”). 
If any such Sales Taxes are levied on Provider or deducted from amounts
otherwise due to Provider hereunder, Recipient shall “gross up” the payments to
Provider so that the net amount received by Provider is equal to the amount
required to be paid to Provider hereunder.  The amounts set forth for each
Service on Schedule A do not include Sales Taxes and will be separately stated
on the relevant invoice to Recipient.  Unless otherwise required by Applicable
Law, Provider shall be solely responsible for remitting payment of all Sales
Taxes to the applicable Governmental

 

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Authority.  Notwithstanding the foregoing, in the case of all Sales Taxes,
Recipient shall not be obligated to pay such Sales Taxes if and to the extent
that Recipient has provided valid exemption certificates or other applicable
documentation that would eliminate or reduce the obligation to collect and/or
pay such Sales Taxes.  Provider shall also be solely responsible for timely
withholding and remitting to the applicable Governmental Authority any
employment, income or other Taxes required to be withheld in respect of
Provider’s employees related to the sale, performance, provision or delivery of
Services.

 

Section 3.4                                    Regulatory Changes.  If at any
time after the Effective Date, any change in Applicable Law or other material
unanticipated change in the operating environment of the Vistana Business
materially increases (directly or indirectly) Provider’s cost of providing the
Services, Provider shall notify Recipient of such increased cost and the Parties
shall promptly negotiate in good faith to adjust the Base Service Fees for each
Service to accurately and fairly account for such increased cost to Provider.

 

ARTICLE IV

 

TERM OF SERVICES

 

Section 4.1                                    Term and Cancellation of
Services.  Each Service shall be provided during the period commencing on the
Effective Date, unless a different commencement date is provided for on Schedule
A for such Service, and expiring on the last day such Service, as set forth on
Schedule A, is required to be provided (with respect to each Service, the
“Service Term”); provided, however, that Recipient may cancel any Service upon
not less than one hundred twenty (120) days’ written notice of cancellation to
Provider, unless a different period is provided for on Schedule A for such
Service; provided that Recipient reimburses Provider for any reasonable,
out-of-pocket third party costs incurred to the extent resulting from the
cancellation of such Service.  For the avoidance of doubt, once Recipient has
cancelled any Service, Recipient shall not be entitled to have such Service
resumed pursuant to this Agreement or otherwise.

 

Section 4.2                                    Extension of Term of Services. 
Specific Services identified on Schedule A may have their Service Term extended
by Recipient for the maximum duration specified on Schedule A (an “Extended
Service”).  Recipient shall make requests for Extended Services in writing not
less than ninety (90) days prior to the end of the Service Term for such
Service.  Notwithstanding the foregoing, if Provider in good faith determines
the extension of any Service Term pursuant to this Section 4.2 will burden
(financially or otherwise) Provider substantially more than anticipated on the
Effective Date, Provider shall notify Recipient at least sixty (60) days prior
to the end of the Service Term for that Service that Recipient cannot extend the
Service Term for that Service.  No other Services may be extended beyond their
Service Term stated on Schedule A.  All Extended Services are subject to
(i) obtaining all Consents necessary for Provider to perform or Recipient to
receive the Service beyond its original Service Term and (ii) any service
limitations set forth in this Agreement.  In no event shall any Services be
provided beyond two (2) years after the Effective Date.

 

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ARTICLE V

 

GOVERNANCE

 

Section 5.1                                    Project Leads; Functional Leads;
Disputes.

 

(a)                                 Starwood designates Ryan Bowes and Todd
Petty as its lead administrative contacts for purposes of this Agreement (the
“Starwood TSA Project Lead”), and Buyer designates Greg Barberio and Jeanette
Marbert as its lead administrative contacts for purposes of this Agreement (the
“Recipient TSA Project Lead” and, together with the Starwood TSA Project Lead,
the “TSA Project Leads”).  Either Party may change its TSA Project Lead upon
written notice to the other Party.  The TSA Project Leads shall meet regularly
or as needed.

 

(b)                                 The initial points of contact for Provider
and Recipient with respect to any day-to-day matters about provision of a
particular Service, including attempting to resolve any issues that may arise
during the performance of such Service, shall be the functional team leaders
designated in the “Contact Information” column opposite such Service on Schedule
A, who shall have the authority to handle such daily operational matters related
to the applicable Service (each such Person, a “Functional Lead”).  Issues that
cannot be resolved by the Functional Leads shall be escalated to the TSA Project
Leads in accordance with this Section 5.1.

 

(c)                                  Prior to initiating any legal action in
accordance with Section 9.4, any dispute, controversy or claim arising out of,
relating to or in connection with the Services or this Agreement (a “Dispute”)
that cannot be resolved by the applicable Functional Leads after a reasonable
period of time (taking into consideration the nature of the Dispute) shall be
submitted first to the TSA Project Leads, and the TSA Project Leads shall seek
to resolve such Dispute through informal good faith negotiation.  In the event
that any Dispute is not resolved by the TSA Project Leads within ten
(10) Business Days after the claiming Party verbally notifies the other Party of
the Dispute (during which time the TSA Project Leads shall meet in person or by
telephone as often as reasonably necessary to attempt to resolve the Dispute),
the TSA Project Leads shall escalate the Dispute to senior executive officers of
each Party for resolution.  In the event the senior executives fail to resolve
the Dispute within an additional twenty (20) Business Days, then either Party
may bring an action in accordance with Section 9.4 and Section 9.5 below to
resolve the Dispute.

 

Section 5.2                                    Steering Committee.  A steering
committee (the “Steering Committee”) comprised of the TSA Project Leads, a
finance executive from each Party (the “Finance Officers”) and corporate counsel
from each Party (the “Legal Officers”) will have overall responsibility for
oversight, administration and issue resolution relating to the performance and
migration of Services under this Agreement.  The Starwood Finance Officer will
be responsible for gathering data required to calculate variable transition
service costs, generating monthly invoices, monitoring receipt of payments, and
monitoring stranded costs.  Both Finance Officers will liaise with the TSA
Project Leads and Functional Leads and the Legal Officers to suggest
modifications to services or their costs (as necessary).  The Legal Officers
will adjust the schedule of Services to reflect changes in scope (as necessary)
and oversee any litigation matters for their respective Parties not resolved
through the dispute resolution process of this Agreement.

 

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Section 5.3                                    Meetings.  The key governance
personnel will meet in person or by video or teleconference in accordance with
the meeting cadence set forth on Exhibit 5.3.

 

Section 5.4                                    Audit Rights.

 

(a)                                 Compliance Audits by Provider.  Upon notice
from Provider, Recipient shall provide Provider, its auditors (including
internal audit staff and external auditors), inspectors, regulators and other
reasonably designated representatives as Provider may from time to time
designate in writing (collectively, the “Starwood Auditors”) with access to, at
reasonable times, any Recipient facility or part of a facility at which
Recipient is using the Services, Recipient personnel, and data and records
relating to the Services for purposes of verifying compliance with this
Agreement.  Provider audits may include security reviews (including Recipient’s
completion of security related questionnaires) of the Services and Recipient’s
systems, including reasonable use of automated scanning tools such as network
scanners, port scanners, and web inspection tools.  Recipient will provide any
assistance that Starwood Auditors may reasonably require with respect to such
audits.  Upon notice from Recipient, Provider shall provide Recipient and its
auditors with access to, at reasonable times, books and records relating to the
Services or this Agreement in order for Recipient to comply with Applicable
Laws.

 

(b)                                 Audits by Buyer.  Buyer shall have the
right, upon at least thirty (30) days’ written notice to Provider, and in a
manner to avoid unreasonable interruption to Provider’s business, to perform
audit procedures over Provider’s internal controls and procedures for the
Services provided by Provider under this Agreement; provided that, such audit
right shall exist solely to the extent required by Buyer’s external auditors to
ensure Buyer’s compliance with the Sarbanes-Oxley Act of 2002, to determine if
Buyer’s financial statements conform to Generally Accepted Accounting Principles
(GAAP), to verify third-party expenses or to the extent required by any
Governmental Authority.  Provider shall provide Buyer and Buyer’s auditors with
appropriate space, furnishings, and telephone, facsimile and photocopy equipment
as Buyer or Buyer’s auditors may reasonably require to perform such audit
procedures.  Provider shall consider in good faith, but shall not be obligated
to make, changes to its controls and procedures to address any findings of such
audits.  Buyer shall pay or reimburse all of Provider’s incremental costs
arising from all such audit-related activities, provision of space, furnishings
and equipment, and analysis and implementation, if any, of any potential changes
in Provider’s controls or procedures described in this Section 5.4(b).

 

(c)                                  Internal Audit Support.  Provider agrees to
provide Recipient a SOC 1 Type 2 Report (conducted by a nationally recognized
firm qualified to perform SOC 1 Type 2 examinations) covering Provider’s general
environment controls over SAP covering the period January 1 to October 31 for
each year during the Term (each, a “SOC 1 Report”).  To the extent the SOC 1
Report does not address the audit needs of Buyer to evaluate the effect of
Provider’s financial controls on Recipient’s internal control over financial
reporting, Provider shall, at Buyer’s cost and expense, provide to Buyer and/or
its designee(s) access at all reasonable times and after reasonable notice to
any facility or part of a facility at which Provider or its Affiliate is
providing the Services, to personnel of Provider or its Affiliate providing the
Services, and to data (in a mutually agreed format), records and systems
relating to the Services, to satisfy Buyer’s annual assessment of internal
controls in accordance with Sarbanes-Oxley and to support the annual attest
audit of Buyer.  In addition, Provider will, at Buyer’s cost and expense,  make
reasonable efforts to provide to Buyer and/or its designee(s) access to third
parties that

 

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perform services on behalf of Provider or its Affiliates relevant to Buyer’s
evaluation of financial reporting, including SOC 1 Reports for third party
systems or services relevant to the Services provided under this Agreement.

 

ARTICLE VI

 

FORCE MAJEURE

 

Section 6.1                                    Force Majeure Event.  Provider
shall not be liable for any interruption, delay or failure to perform any
obligation under this Agreement when such interruption, delay or failure results
from causes beyond its reasonable control (or beyond the reasonable control of
any Person acting on its behalf), including any strikes, lockouts, acts of any
Governmental Authority, riot, insurrection or other hostilities, acts of the
public enemy or terrorism, embargo, fuel or energy shortage, fire, flood,
earthquake, tsunami, or acts of God (any such event, a “Force Majeure Event”). 
In the event of a Force Majeure Event, Provider’s affected obligations hereunder
shall be postponed for such time as its performance is suspended or delayed on
account thereof.  For the duration of such suspension or delay, no fees or
expenses shall be incurred by Recipient for Services that are suspended or
delayed, and Recipient shall have the right, but not the obligation, to obtain
replacement services for the duration of the Force Majeure Event from a
third-party service provider at Recipient’s expense.

 

Section 6.2                                    Consequences of Force Majeure
Event.  Provider shall notify Recipient as soon as reasonably practicable upon
learning of the occurrence of a Force Majeure Event.  If the Force Majeure Event
causes a material failure or delay in the provision of Services by Provider
hereunder, (a) Provider shall use commercially reasonable efforts, which efforts
shall include carrying out the actions set forth in the Recovery Plan, if such
actions are applicable to such Force Majeure event, to remove such Force Majeure
Event as soon as and to the extent reasonably and practicably possible,
(b) Provider will treat Recipient substantially the same as any other internal
or external service recipient (including franchisees) in connection with the
restoration of the affected Services, if any, and (c) at the option of
Recipient, the term and all additional payments owed in respect of any affected
Service shall be tolled to the extent such Services are not provided or have not
already been provided by Provider, until such Service is resumed in accordance
with the standards set forth in Section 2.4(a).  Upon the cessation of the Force
Majeure Event, Provider shall use commercially reasonable efforts to resume its
performance of any affected Service in accordance with the standards set forth
in Section 2.4(a) with the least possible delay.  If any Service is interrupted
or suspended for more than ten (10) consecutive days, Recipient may terminate
the affected Service (including any obligation to pay for such Service), in
whole or in part, upon written notice to Provider.

 

ARTICLE VII

 

LIABILITIES

 

Section 7.1                                    Limitations of Liability.  With
regard to any and all damages, fines, penalties, deficiencies, losses,
liabilities (including settlements and judgments) and expenses (including
interest, court costs, reasonable fees and expenses of attorneys, accountants
and other experts and professionals or other reasonable fees and expenses of
litigation or other

 

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proceedings or of any claim, default or assessment) (collectively, “Losses”)
arising out of a breach of Provider’s obligations in connection with the
provision of Services under this Agreement, other than Losses arising as a
result of the fraud, willful misconduct or gross negligence of Provider or
covered under a Provider indemnity under Section 7.2, Provider’s sole liability
for such Losses shall be to use reasonable commercial efforts to re-perform, or
cause its contractors to re-perform, such Services.  Recipient shall promptly
advise Provider of any such breach of which it becomes aware.

 

Section 7.2                                    Indemnity.

 

(a)                                 Recipient agrees to indemnify, defend and
hold harmless each Provider and its respective officers, directors, employees,
agents, successors, and assigns, from any Losses resulting from Third Party
Claims arising hereunder from (i) Recipient’s breach of its obligations under
Section 2.12 (with respect to Personally Identifiable Information) or with
respect to Provider’s Information under this Agreement, (ii) Recipient’s
violation of Applicable Laws, (iii) Recipient’s failure to comply with any
applicable Payment Card Industry Data Security Standard and any other credit
card company specific security requirements (collectively, “Credit Card Company
Regulations”) (iv) the infringement by Recipient of a third party’s intellectual
property rights, or (v) Recipient’s fraud, willful misconduct or gross
negligence.

 

(b)                                 Provider agrees to indemnify, defend and
hold harmless Recipient and its respective officers, directors, employees,
agents, successors, and assigns, from any Losses resulting from Third Party
Claims arising hereunder from (i) Provider’s breach of its obligations with
respect to Recipient’s Information under this Agreement, (ii) Provider’s
violation of Applicable Laws, (iii) Provider’s failure to comply with any
applicable Credit Card Company Regulations, (iv) the infringement by Provider of
a third party’s intellectual property rights, or (v) Provider’s fraud, willful
misconduct or gross negligence.

 

(c)                                  EXCEPT FOR ITS OBLIGATION TO COMPLY WITH
SECTION 7.2(A) OR SECTION 7.2(B) ABOVE, AS APPLICABLE, EACH OF PROVIDER AND
RECIPIENT SHALL NOT BE LIABLE FOR ANY LOSSES IN CONNECTION WITH THIS AGREEMENT. 
TO THE MAXIMUM EXTENT PERMISSIBLE UNDER APPLICABLE LAW, IN NO EVENT SHALL A
PARTY OR ITS AFFILIATES OR AGENTS BE LIABLE TO ANY INDEMNIFIED PERSON FOR LOSS
OF PROFITS, LOSS OF BUSINESS, OR LOSS OF DATA, OR FOR ANY PUNITIVE, SPECIAL,
CONSEQUENTIAL, EXEMPLARY, INCIDENTAL OR OTHER INDIRECT DAMAGES, IN CONNECTION
WITH THIS AGREEMENT UNLESS SUCH DAMAGES ARE AWARDED AND REQUIRED TO BE PAID BY
AN INDEMNIFIED PERSON TO A THIRD PARTY PURSUANT TO AN ORDER OF A GOVERNMENTAL
AUTHORITY.

 

(d)                                 The party required to indemnify pursuant to
this Article (the “Indemnitor”), upon demand by a party (“Indemnitee”), at
Indemnitor’s sole cost and expense, shall resist or defend such claim (in the
Indemnitee’s name, if necessary), using such attorneys as the Indemnitee shall
approve, which approval shall not be unreasonably withheld. If, in the
Indemnitee’s reasonable opinion, there exists a conflict of interest which would
make it inadvisable to be represented by counsel for the Indemnitor, the
Indemnitor and the Indemnitee shall jointly select acceptable attorneys, and the
Indemnitor shall pay the reasonable fees and disbursements of such attorneys.

 

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(e)                                  No right of indemnification shall exist
under this Agreement with respect to matters for which indemnification may
reasonably be claimed under the Merger Agreement, it being the intent of the
Parties that claims that are addressed under the Merger Agreement shall be
governed solely by the Merger Agreement.  No right of indemnification shall
exist under the Merger Agreement for claims arising out of the performance of
this Agreement, it being the intent of the Parties that such claims shall be
solely governed by the provisions of this Agreement.  Notwithstanding the
foregoing, no claim for indemnification made under this Agreement shall be
denied solely based on the preceding two sentences if such claim was initially
brought under the Merger Agreement and denied because the subject matter of such
claim was reasonably believed to be covered under the indemnification provisions
of this Agreement, and except for the preceding sentence, none of the
indemnifications provided in this Agreement shall in any way be deemed to limit,
or otherwise impair a Party’s right to indemnification under any provision of
the Merger Agreement.

 

Section 7.3                                    Entire Obligation. The foregoing
provisions of this Article VII set forth the full extent of the parties’
liability (monetary or otherwise) under this Agreement for any and all Losses.

 

ARTICLE VIII

 

TERMINATION

 

Section 8.1                                    Term of Agreement.  The term of
this Agreement shall commence on the Effective Date and end on the earlier to
occur of (a) the date on which the provision of all Services has expired or been
canceled or terminated pursuant to Section 6.2, Section 8.2 or Article IV and
(b) the date on which this Agreement is terminated pursuant to Section 8.2.

 

Section 8.2                                    Breach of Agreement.  If Provider
or Recipient causes or suffers to exist any material breach of any of its
obligations under this Agreement, and such party does not cure such breach
within (i) ten (10) Business Days with respect to Recipient’s obligations under
Article III or (ii) thirty (30) days with respect to all other obligations of
Provider or Recipient under this Agreement, after receiving written notice
thereof from the non-breaching party, the Party not in breach (or whose
Affiliate is not in breach) may terminate this Agreement, in whole or in part,
immediately by providing written notice of termination.  In addition, either
Party may terminate this Agreement, effective immediately upon written notice,
if the other Party commences a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar Applicable Law now or
hereafter in effect or seeks the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, or consents to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it, or makes a general assignment for the benefit of creditors
or takes any corporate action to authorize any of the foregoing.

 

Section 8.3                                    Effect of Termination.  In the
event of a termination or expiration of this Agreement, Provider shall be
entitled to all outstanding amounts due from Recipient for the provision of
Services rendered prior to the date of termination or expiration.  Upon
termination, cancellation or expiration of any Service in accordance with this
Agreement,

 

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Provider will have no further obligation to provide such terminated, cancelled
or expired Service.  In the event of a termination or expiration of this
Agreement, (a) Provider will promptly return to Recipient copies of any of
Recipient’s Information that are in Provider’s possession or control, and
(b) Recipient will promptly return to Provider copies of any of Provider’s
Information that are in Recipient’s possession or control; provided that neither
Provider nor Recipient shall be required to erase or extinguish any Information
which is contained in any computer or server system or archived computer system
backup of such party, including in emails, so long as such Information is kept
confidential in accordance with Section 9.3.

 

Section 8.4                                    Survival.  Notwithstanding
anything herein to the contrary, Articles VI and VIII and Section 2.4(c),
Section 3.2, Section 3.3, Section 8.3 and this Section 8.4 shall survive any
termination or expiration of this Agreement.

 

ARTICLE IX

 

MISCELLANEOUS

 

Section 9.1                                    Notices. Except as otherwise
provided herein, all notices, requests, claims, demands, waivers and other
communications hereunder shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopier, facsimile or email transmission (in the case of telecopier,
facsimile or email transmission, with copies by overnight courier service or
registered mail) to the respective Parties as follows (or, in each case, as
otherwise notified by any of the Parties) and shall be effective and deemed to
have been given (i) immediately when sent by telecopier, facsimile or email
between 9:00 A.M. and 6:00 P.M. (New York City time) on any Business Day (and
when sent outside of such hours, at 9:00 A.M. (New York City time) on the next
Business Day) and (ii) when received if delivered by hand or overnight courier
service or certified or registered mail on any Business Day:

 

(a)                                 If to Provider, to:

 

Starwood Hotels & Resorts Worldwide, Inc.

One Star Point

Stamford, CT 06902

Attn.: Chief Financial Officer
Facsimile: (203) 351-2519
Email:  Alan.Schnaid@starwoodhotels.com

 

with a copy (which shall not constitute notice or service of process) to:

 

Starwood Hotels & Resorts Worldwide, Inc.
Attn.:  General Counsel
Facsimile: 203-351-2401
Email:  Kenneth.siegel@starwoodhotels.com

 

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with a copy (which shall not constitute notice) to:

 

Latham & Watkins LLP

885 Third Avenue

New York, New York 10022

Attention: Jennifer Perkins

Facsimile No.: (212) 751-4864

Email:  jennifer.perkins@lw.com

 

(b)                                 if to Recipient, to:

 

Interval Leisure Group, Inc.
6262 Sunset Drive
Miami, Florida 33143
Attn.: Victoria J. Kincke, General Counsel
Facsimile: 305-667-2072
Email: Victoria.Kincke@iilg.com

 

with a copy (which shall not constitute notice or service of process) to:

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY 10153

Attention:  Michael E. Lubowitz

Facsimile No.:  (212) 310-8007

Email: michael.lubowitz@weil.com

 

Notices sent by multiple means, each of which is in compliance with the
provisions of this Agreement will be deemed to have been received at the
earliest time provided for by this Agreement.

 

Section 9.2                                    Assignment.  Neither this
Agreement nor any of the rights or obligations hereunder shall be assigned by
any Party or its Affiliates without the prior written consent of Recipient;
provided, however, that, without the consent of Recipient, Provider may delegate
the performance of all or any part of its obligations under this Agreement,
including the obligation to provide any Service or any portion thereof, to
(a) any Affiliate of Provider or (b) one or more third parties; provided that no
such delegation by Provider to any such Affiliate or third party shall in any
way affect the Recipient’s rights under this Agreement or relieve Provider of
any of its obligations under this Agreement.  Any purported assignment in
violation of this Section 9.2 shall be null and void.

 

Section 9.3                                    Confidentiality.

 

(a)                                 In the course of the provision or receipt of
Services, each Provider or Recipient may need to disclose or make accessible to
the other (for purposes of this Section 9.3(a), the entity disclosing or making
accessible such information shall hereinafter be referred to as the “Disclosing
Party”, and the entity receiving such information shall hereinafter be referred
to as the “Receiving Party”) certain information that is either non-public,
confidential or proprietary in nature (collectively, the “Information”);
provided that for the purposes of this Agreement,

 

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Information shall not include information that (i) becomes generally available
to the public without any action by, or involvement of, the Receiving Party or
its Affiliates or contractors and through no violation of this Agreement,
(ii) is obtained by the Receiving Party without restrictions on use or
disclosure from a third party who, to the Receiving Party’s knowledge, breached
no obligation of confidentiality in disclosing the information, or (iii) is
independently developed by the Receiving Party without reference or access to
any Information of the Disclosing Party.

 

(b)                                 The Receiving Party shall hold in confidence
and not disclose to any third party any Information of the Disclosing Party
received by it in connection with this Agreement, and it shall use all
Information of the Disclosing Party received by it in connection with this
Agreement solely as necessary for the provision or receipt of the Services (and
for no other purpose whatsoever) and it shall take the same care with the
Disclosing Party’s Information as it does with its own, but in no event less
than a reasonable degree of care; provided that Provider may disclose the
Information to those of its Affiliates or to third parties that provide Services
or to any directors, members, officers, employees, agents and advisors
(including, without limitation, attorneys, accountants, consultants and service
providers) of any such Person, but only to the extent necessary for such
Affiliates, third parties, directors, members, officers, employees, agents and
advisors to carry out the Services, and provided they are bound by
confidentiality obligations at least as stringent as those set forth herein. 
Each Provider and Recipient shall keep the terms of this Agreement confidential
and shall not disclose the terms of this Agreement without the other Party’s
prior written consent, except as may be necessary to comply with Applicable Law
(including the rules of any stock exchange) or any financial reporting
obligations or except as otherwise permitted under this Agreement.

 

(c)                                  If the Receiving Party is requested to
disclose any of the Disclosing Party’s Information pursuant to any judicial or
governmental order, or to a regulatory authority or under other operation of
Applicable Law, it will not be in breach of this Section 9.3 to make such
disclosure; provided that the Receiving Party (i) promptly notifies the
Disclosing Party in writing prior to making any such disclosure so that the
Disclosing Party may seek a protective order or other appropriate remedy or, in
its sole discretion, waive compliance with this Section 9.3, and (ii) if the
Disclosing Party is not successful in precluding the requesting legal body from
requiring the disclosure of its Information, limits disclosures to the portion
of Information specifically required to be disclosed and exercises reasonable
efforts to obtain reliable assurances that the Information will be accorded
confidential treatment.

 

Section 9.4                                    Governing Law.  This Agreement
and all claims arising out of or relating to this Agreement and the transactions
contemplated hereby shall be governed by the Applicable Laws of the State of New
York.

 

Section 9.5                                    Consent to Jurisdiction; Waiver
of Jury Trial.

 

(a)                                 Each of the Parties irrevocably submits to
the exclusive jurisdiction of (i) state courts of the State of New York located
in New York County and (ii) the United States District Court for the Southern
District of the State of New York for the purposes of any suit, Action or other
proceeding arising out of or relating to this Agreement or any transaction
contemplated hereby (and agrees not to commence any Action, suit or proceeding
relating hereto except in such courts).  Each of the Parties further agrees that
service of any process, summons, notice or

 

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document hand delivered or sent by U.S. registered mail to such Party’s
respective address set forth in Section 9.1 shall be effective service of
process for any Action, suit or proceeding in New York with respect to any
matters to which it has submitted to jurisdiction as set forth in the
immediately preceding sentence.  Each of the Parties irrevocably and
unconditionally waives any objection to the laying of venue of any Action, suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby in (i) state courts of the State of New York located in New
York County or (ii) the United States District Court for the Southern District
of the State of New York, and hereby further irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such Action,
suit or proceeding brought in any such court has been brought in an inconvenient
forum.  Notwithstanding the foregoing, each Party agrees that a final judgment
in any Action or proceeding so brought shall be conclusive and may be enforced
by suit on the judgment in any jurisdiction or in any other manner provided in
law or in equity.

 

(b)                                 EACH OF THE PARTIES IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT,
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ACTIONS OF THE PARTIES IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

 

Section 9.6                                    Entire Agreement.  This
Agreement, together with the Merger Agreement, constitutes the entire agreement
among the Parties with respect to the subject matter hereof and supersedes any
prior understandings, negotiations, agreements, or representations among the
Parties of any nature, whether written or oral, to the extent they relate in any
way to the subject matter hereof.

 

Section 9.7                                    Amendments.  This Agreement may
not be amended except by a written instrument executed by the Parties.

 

Section 9.8                                    Waivers.  Any agreement on the
part of any Party to any waiver shall be valid only if set forth in an
instrument in writing signed by or on behalf of such Party.  No failure or delay
on the part of any Party hereto in the exercise of any right hereunder shall
impair such right or be construed as a waiver of, or acquiescence in, any breach
of any representation, warranty, covenant or agreement herein, nor shall any
single or partial exercise of any such right preclude other or further exercise
thereof or of any other right.

 

Section 9.9                                    No Third Party Beneficiaries.  No
provision of this Agreement is intended to confer any rights, benefits, remedies
hereunder upon any Person other than the Parties, their Affiliates and their
respective successors and permitted assigns.

 

Section 9.10                             Severability.  If any provision of this
Agreement or the application of any such provision to any Person or circumstance
shall be declared by any court of competent jurisdiction to be invalid, illegal,
void or unenforceable in any respect, all other provisions of this Agreement, or
the application of such provision to Persons or circumstances other than those
as to which it has been held invalid, illegal, void or unenforceable, shall
nevertheless remain in full force and effect and shall in no way be affected,
impaired or invalidated thereby.  Upon such determination that any provision, or
the application of any such provision, is invalid, illegal, void

 

20

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or unenforceable, the Parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the Parties as closely as
possible to the fullest extent permitted by Applicable Law in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to the
greatest extent possible.

 

Section 9.11                             Counterparts.  This Agreement may be
executed in several counterparts, each of which shall be deemed to be an
original, and all of which together shall be deemed to be one and the same
instrument.  Signed counterparts of this Agreement may be delivered by facsimile
and by scanned .pdf image.

 

[Signature pages follow.]

 

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IN WITNESS WHEREOF, each Party has caused this Agreement to be duly executed by
its authorized officer as of the date first above written.

 

 

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

 

 

 

 

 

By:

/s/ Thomas B. Mangas

 

Name:

Thomas B. Mangas

 

Title:

Chief Executive Officer

 

[Signature Page to Transition Services Agreement]

 

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INTERVAL LEISURE GROUP, INC.

 

 

 

 

 

By:

/s/ Jeanette E. Marbert

 

Name:

Jeanette E. Marbert

 

Title:

Executive Vice President and Chief Operating Officer

 

[Signature Page to Transition Services Agreement]

 

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