Exhibit 10.2

LICENSE, SERVICES AND DEVELOPMENT AGREEMENT

BETWEEN

THE RITZ-CARLTON HOTEL COMPANY, L.L.C.

AND

MARRIOTT VACATIONS WORLDWIDE CORPORATION

FOR

RITZ-CARLTON PROJECTS

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TABLE OF CONTENTS

 

          Page   1.   

LICENSE

     2    2.   

NONCOMPETITION AGREEMENT; EXCLUSIVITY AND RESERVED RIGHTS

     3       2.1    Noncompetition Agreement      3       2.2    Exclusivity   
  4       2.3    Licensor’s Reserved Rights      4       2.4    Licensee’s
Reserved Rights      6       2.5    Similar Lines of Businesses      6    3.   

FEES

     7       3.1    Royalty Fees      7       3.2    Usage Fees and Reimbursable
Expenses; Maintenance Costs; Reimbursements of Amounts Due Under RHL
          Agreement      10       3.3    Other Charges; Changes to Fees,
Expenses and Charges; Other Costs      11       3.4    Travel Expenses and
Reimbursement      12       3.5    Marketing and Sales Fees and Charges      12
      3.6    Making of Payments; Delegation of Duties and Performance of
Services      12       3.7    Interest on Late Payments      13      
3.8    Currency and Taxes      13    4.   

TERM

     14       4.1    Initial Term      14       4.2    Extension Term; Tail
Period      14    5.   

EXISTING PROJECTS; DEVELOPMENT RIGHTS AND RESTRICTIONS

     15       5.1    Existing Projects      15       5.2    New Projects      15
      5.3    Undeveloped Parcels Pre-Approved      18       5.4    Projects
Located at Hotels other than Licensor Lodging Facilities      18      
5.5    Prohibitions To Be Included in Future Management Agreements      19      
5.6    Destination Club Projects at Third-Party Owned Ritz-Carlton Hotels     
19       5.7    Limitations on MVW Ritz-Carlton Business; Compliance with
Contractual Restrictions      20       5.8    Delegation of Certain Functions;
Sublicensing of Marketing Functions      20    6.   

SOURCING; DESIGN REVIEW; CONSTRUCTION, CONVERSION AND RENOVATION

     22       6.1    Furniture, Fixtures, Equipment, Supplies, and Signage     
22       6.2    Design Review      22       6.3    Site Inspection      22      
6.4    Construction/Conversion/Renovation      22    7.   

SYSTEM AND STANDARDS

     23       7.1    Brand Standards      23       7.2    Modification of Brand
Standards      23    8.   

OPERATIONS

     26       8.1    Operating the Projects and the MVW Ritz-Carlton Business   
  26       8.2    Employees      27       8.3    Management and Operation of the
Projects      27       8.4    Customer Satisfaction System and Quality Assurance
Audit System      28       8.5    Projects Controlled by Non-Controlled Property
Owners’ Association      29    9.   

RESTRICTIONS AND LIMITATIONS ON CONDUCT OF MVW RITZ-CARLTON BUSINESS

     29   

 

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          Page      9.1    Offers and Sales of Destination Club Units and
Residential Units; Use of MVW Ritz-Carlton Business Customer
          Information      29      

9.2    Transient Rentals of Ritz-Carlton Destination Club Units and Ritz-Carlton
Residential Units

     32      

9.3    No Affiliation with Other Brands/Businesses

     33      

9.4    Destination Club Businesses and Whole Ownership Residential Businesses
Operating Under Other Brands

     33      

9.5    Services and Products Made Available to Members and Marketing and
Exchange Arrangements

     34      

9.6    Changes in Programs, Services or Benefits

     35    10.   

ELECTRONIC SYSTEMS

     35      

10.1    Systems Installation

     35      

10.2    Reservation System

     36      

10.3    Electronic Systems Provided Under License

     36      

10.4    Proposed Enhancements

     37    11.   

LICENSOR SERVICES AND SUPPORT

     37      

11.1    Training

     37      

11.2    Other Services

     38    12.   

REPAIRS AND MAINTENANCE

     39    13.   

PROPRIETARY MARKS AND INTELLECTUAL PROPERTY

     40      

13.1    Licensor’s and Licensee’s Representations and Responsibility Regarding
the Licensed Marks

     40      

13.2    Licensee’s Use of System and Licensor Intellectual Property

     42      

13.3    Licensee’s Use of Other Marks

     47      

13.4    Licensee Website

     47      

13.5    Credit and Debit Cards

     48      

13.6    Use of Licensee Marks

     49      

13.7    Assignment of Certain Intellectual Property to Licensee

     50    14.   

CONFIDENTIAL INFORMATION; DATA PROTECTION LAWS

     50      

14.1    Confidential Information

     50      

14.2    Data Protection Laws; Data Security

     51    15.   

ACCOUNTING AND REPORTS

     52      

15.1    Books, Records, and Accounts

     52      

15.2    Reports

     52      

15.3    Licensor Examination and Audit of Licensee’s Records

     52    16.   

INDEMNIFICATION; CONTRIBUTION IN LIEU OF INDEMNIFICATION; AND INSURANCE

     53      

16.1    Indemnification

     53      

16.2    Insurance Requirements of Licensee

     57      

16.3    Insurance Required During Construction

     59      

16.4    Obligation to Maintain Insurance

     59      

16.5    Contribution

     59    17.   

TRANSFERABILITY OF INTERESTS

     60      

17.1    Transfers by Licensee

     60      

17.2    Transfers by Licensor

     60      

17.3    Proposed Transfers to Lodging Competitors

     61      

17.4    Comfort Letter and Security Interests in This Agreement

     61    18.   

BREACH, DEFAULT, AND REMEDIES

     61      

18.1    Licensee Project-, Sales Facility-, and Member Service Center-Level
Breaches, Defaults, and Remedies

     61      

18.2    Licensee Agreement-Level Defaults

     65   

 

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          Page     

18.3    Licensor Defaults

     69       18.4    Other Breaches      72      

18.5    Extraordinary Events

     72    19.   

POST-TERMINATION OBLIGATIONS; DE-IDENTIFICATION

     73      

19.1    Project De-Identification and Post-Termination Obligations

     73      

19.2    Agreement De-Identification and Post-Termination Obligations

     75    20.   

COMPLIANCE WITH LAWS; LEGAL ACTIONS

     76      

20.1    Compliance with Laws

     76      

20.2    Notice Regarding Legal Actions

     77      

20.3    Block Exemption

     77    21.   

RELATIONSHIP OF PARTIES

     77      

21.1    Reasonable Business Judgment

     77      

21.2    Independent Contractor

     78    22.   

GOVERNING LAW; INJUNCTIVE RELIEF; COSTS OF ENFORCEMENT; ARBITRATION; AND EXPERT
RESOLUTION

     78      

22.1    Governing Law; Venue

     78      

22.2    Injunctive Relief

     78      

22.3    Costs of Enforcement

     79      

22.4    Arbitration

     79      

22.5.    Expert Resolution

     80      

22.6    Waiver of Jury Trial and Punitive Damages

     81    23.   

NOTICES

     81      

23.1    Notices

     81    24.   

CONSTRUCTION AND SEVERABILITY; APPROVALS, CONSENTS AND WAIVERS; ENTIRE AGREEMENT

     82      

24.1    Construction and Severability

     82      

24.2    Approvals, Consents and Waivers

     83      

24.3    Entire Agreement

     84      

24.4    Amendments

     84    25.   

REPRESENTATIONS, WARRANTIES AND COVENANTS

     84      

25.1    Existence and Power; Authorization; Contravention

     84      

25.2    Acknowledgements and Representations Regarding Territorial Restrictions
in Existing Contracts

     84    26.   

MISCELLANEOUS

     85      

26.1    Translations

     85      

26.2    Multiple Counterparts

     85      

26.3    Failure to Close the Spin-Off Transaction

     85    27.   

RCHC MANAGED PROJECTS

     85      

27.1    Provisions of this Agreement That Do Not Apply to RCHC Managed Projects

     85      

27.2    Provisions of this Agreement That Are Modified With Respect to the RCHC
Managed Projects

     86      

27.3    Provisions of this Agreement Applicable to Non-RCHC Managed Projects and
RCHC Managed Projects

     94    28.   

GUARANTY.

     94      

28.1    Guaranty

     94      

28.2    Guarantor Waivers

     95      

28.3    Maximum Liability of Guarantors

     95   

 

EXHIBIT A – DEFINITIONS

 

EXHIBIT B – EXISTING PROJECTS

 

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EXHIBIT  B-1 – UNDEVELOPED PARCELS

 

EXHIBIT  C – MANAGEMENT COMPANY ACKNOWLEDGMENT

 

EXHIBIT  D – FORM OF OPERATING STATEMENT

 

EXHIBIT  E – AFFILIATE SUBLICENSE AGREEMENT

 

EXHIBIT  F – PROVISIONS TO BE INCLUDED IN SUBLICENSE AGREEMENT WITH
NON-AFFILIATES FOR SALES, MARKETING AND RELATED SERVICES

 

EXHIBIT  G – DESIGN REVIEW ADDENDUM

 

EXHIBIT  H – EXISTING PROJECTS AT WHICH LICENSEE HAS NOT ENGAGED IN TRANSIENT
RENTAL

 

EXHIBIT  I – EXISTING GOLF FACILITIES

 

EXHIBIT  J – PERMITTED LICENSEE AFFILIATE NAMES

 

EXHIBIT  K – NEW PROJECT APPLICATION

 

EXHIBIT  L – PURCHASER DISCLOSURE STATEMENT

 

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LICENSE, SERVICES, AND DEVELOPMENT AGREEMENT

This License, Services, and Development Agreement (“License Agreement” or
“Agreement”) is executed on the 17th day of November, 2011, to be effective as
of 12:01 am New York City time on the 19th day of November 2011 (“Effective
Date”) by The Ritz-Carlton Hotel Company, L.L.C., a Delaware limited liability
company (“Licensor”) and Marriott Vacations Worldwide Corporation, a Delaware
corporation (“Licensee”).

RECITALS

A. Licensor owns, or has the right to use and sublicense, the Licensed Marks and
the System.

B. Prior to the Spin-Off Transaction (defined below), Licensee was a
wholly-owned subsidiary of Marriott International, Inc. and through affiliates
has been operating the Destination Club Business and Whole Ownership Residential
Business by developing, selling, marketing, operating and financing Destination
Club Projects and Residential Projects under the Licensed Marks and the System
since 1999 pursuant to an inter-company arrangement between Licensor and/or its
Affiliates and Licensee.

C. As a result of the planned spin-off of Licensee pursuant to the Separation
and Distribution Agreement (the “Spin-Off Transaction”), Licensee will no longer
be a wholly-owned subsidiary of MII and will be a separate entity.

D. Licensee desires to continue operating the MVW Ritz-Carlton Business,
including developing New Projects under the Licensed Marks and the System, and
wishes to obtain a license to use the System and the Licensed Marks for these
purposes.

E. Licensee desires to operate the Non-RCHC Managed Projects and wishes to
obtain a license to use the System and Licensed Marks for these purposes.

F. Licensee or its Affiliates have or will engage Licensor or its Affiliates to
manage the RCHC Managed Projects under separate RCHC Management Agreements and
will not obtain a license to use the System or Licensed Marks with respect to
the on-site operation of RCHC Managed Projects. Certain provisions of this
Agreement will not apply, or may apply in a different manner, to RCHC Managed
Projects, as contemplated herein, including in Section 27.

G. Licensor or its Affiliates will provide certain services to Licensee and its
Affiliates with respect to the MVW Ritz-Carlton Business in accordance with the
terms hereof.

H. Contemporaneously with the execution of this Agreement, Marriott
International, Inc. and Marriott Worldwide Corporation (collectively,
“Marriott”) and Licensee are entering into a License, Services, and Development
Agreement (the “Marriott License Agreement”) under which, among other things,
Licensee will be granted the right to the develop and operate Destination Club
Projects and Residential Projects under the Marriott name and trademarks.
Licensee acknowledges and agrees that the Marriott License Agreement shall
govern the relationship between Marriott and Licensee with respect to such
matters, and, except for the indemnity in Section 16.1.A., this Agreement shall
not apply to such relationship.

I. All capitalized terms used in this Agreement shall have the meanings ascribed
to such terms in Exhibit A.

 

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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, Licensee and Licensor agree
as follows:

1. LICENSE

A. Subject to all of the reservations of rights and exceptions to and
limitations on exclusivity set forth in this Agreement, the Noncompetition
Agreement, and, with respect to the RCHC Managed Projects, Sections 1.B. and
27., Licensor hereby grants to Licensee within the Territory, and Licensee
accepts, under the terms hereof:

(i) (w) a limited, exclusive license during the Term to use the names and marks
described in (i) through (iv) and in (vii) of the definition of Licensed Marks
and the System for the activities described in (i) through (vi) of the
definition of Destination Club Business; (x) a limited, exclusive license during
the Term to use the names and marks described in (i) and (ii) of the definition
of Licensed Marks for the activities described in (vii) of the definition of
Destination Club Business; (y) a limited, exclusive license during the Term to
use the names and marks described in (iv) of the definition of Licensed Marks
for the activities described in (vii) of the definition of Destination Club
Business, subject, however, to Licensor’s and its Affiliates’ right to use the
names and marks described in (iv) of the definition of Licensed Marks as set
forth in the last sentence of Section 2.3.C; and (z) a limited, non-exclusive
license during the Term to use the names and marks described in (iii) and
(vii) of the definition of Licensed Marks and the System for the activities
described in (vii) of the definition of Destination Club Business, all in
connection with the operation of the Ritz-Carlton Destination Club Business,
including the operation of Existing Projects and the development and operation
of New Projects, in accordance with the System and this Agreement; and

(ii) (x) a limited, non-exclusive license during the Term to use the names and
marks described in (iii) through (vii) of the definition of Licensed Marks and
the System for the Whole Ownership Residential Business, in connection with the
operation of the Ritz-Carlton Whole Ownership Residential Business, including
the operation of Existing Projects and the development and operation of New
Projects, in accordance with the System and this Agreement and (y) a limited,
exclusive license during the Term to use the Licensed Project Names for the
Whole Ownership Residential Business, in connection with the operation of the
Ritz-Carlton Whole Ownership Residential Business, including the operation of
Existing Projects and the development and operation of New Projects, in
accordance with the System and this Agreement;

provided, however, that with respect to the license granted in this Section 1,

(a) Licensee shall have no right (subject to Section 13.1.E.) to use the
Licensed Marks or the System in the Excluded Area and shall not have the right
to any indemnity under Section 16.1.B. with respect to third-party claims
resulting from Licensee’s or its Affiliates’ use of the Licensed Marks or the
System in the Excluded Area, and any third-party claim related to the use of the
Licensed Marks or the System in the Excluded Area shall be subject to
indemnification by Licensee pursuant to Section 16.1.A; and

(b) Licensee shall have no right under this Agreement to develop, own, operate,
or manage, as applicable, any Ritz-Carlton Destination Club Products other than
as Leisure/Vacation Products.

 

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Such limited license grant in this Section 1 also includes any nonexclusive uses
of Licensor Intellectual Property permitted during the “tail period” as set
forth in Section 4.2. Except for the rights granted exclusively in this
Agreement, the rights granted in this Agreement are non-exclusive.

B. Notwithstanding anything to the contrary in Section 1.A., the license granted
in Sections 1.A(i) and (ii) does not include the right to conduct on-site
operations of RCHC Managed Projects under the designated Licensed Marks or the
System since such on-site operations are conducted by Licensor or its Affiliate
under the applicable RCHC Management Agreement.

C. The limited license grant herein also includes the non-exclusive right by
Licensee to use the name and mark “Ritz-Carlton” as part of “Ritz-Carlton Golf”
(but not the name “Ritz-Carlton” used by itself or with other words, terms,
designs or other elements) in connection with the operation of golf facilities,
including the Existing Golf Facilities, under the “Ritz-Carlton Golf” name and
in connection with the development and operation of future golf facilities that
are located at or in the general vicinity of New Projects and that have been
approved in writing by Licensor in accordance with the terms and conditions of
this Agreement. All such golf facilities shall be developed and operated in
accordance with the Brand Standards. If Licensor or its Affiliates provide
support or services to Licensee or its Affiliates in connection with such golf
facilities operating under the “Ritz-Carlton Golf” name, Licensee shall pay the
applicable fees to Licensor or its Affiliates for such services and/or support.
Such fees will be fair, commercially reasonable, and, if applicable, consistent
with fees charged to third parties for similar services and support related to
such facilities.

D. Licensee shall have no right to use the Licensed Marks or Branded Elements in
connection with the development or sales or the marketing, operating, managing
or financing of units in a Condominium Hotel.

E. The parties acknowledge that Licensor is party to the RHL Agreement with RHL,
under which Licensor has the right to use and sublicense the name “Ritz” as part
of the names and marks described in (i) through (ii) and (iv) through (vi) of
the definition of Licensed Marks. With respect to the RHL Territory, Licensor is
sublicensing to Licensee its right under the RHL Agreement to use the name
“Ritz” as part of such Licensed Marks referenced herein, and the grant of rights
set forth in this Agreement are subject to the RHL Agreement. Licensor will
provide Licensee with a true and correct copy of the RHL Agreement and any
amendments thereto promptly after execution thereof. Licensee must comply with
all terms and provisions in the RHL Agreement with respect to Licensee’s and its
Affiliates’ activities in the RHL Territory.

2. NONCOMPETITION AGREEMENT; EXCLUSIVITY AND RESERVED RIGHTS

2.1 Noncompetition Agreement.

In partial consideration for the parties’ agreement to enter into this
Agreement, Marriott International, Inc. and Licensee have entered into a
Noncompetition Agreement (“Noncompetition Agreement”) contemporaneously herewith
under which Licensor and Marriott International, Inc. have agreed to certain
noncompetition covenants. Licensee hereby agrees to comply with the terms of the
Noncompetition Agreement, and Licensor hereby agrees to comply with the terms of
the Noncompetition Agreement as if Licensor were Marriott International, Inc.
thereunder.

 

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2.2 Exclusivity.

A. Subject to the Noncompetition Agreement, the Marriott License Agreement, and
Sections 2.3, 2.5, and 8.3. during the Term, neither Licensor nor its Affiliates
will within the Territory:

(i) use, or license any third party to use, the Licensed Marks or the name and
mark “Ritz-Carlton” (other than as part of one or more corporate names of
Licensor or its Affiliates) or the Branded Elements in connection with
(u) developing or operating Destination Club Projects; (v) developing, selling,
marketing, managing, operating, or financing Destination Club Products or
Destination Club Units; (w) developing, selling, marketing, or operating
Exchange Programs; (x) managing rental programs associated with Destination Club
Products; (y) establishing or operating sales facilities for Destination Club
Products; or (z) managing member services related to Destination Club Products.

(ii) use, or license any third party to use, (x) the marks identified in (i),
(ii), and (iv) of the definition of the Licensed Marks in connection with
managing any businesses or services that are ancillary to the Destination Club
Business or the Whole Ownership Residential Business or (y) the marks identified
in (i), (ii), and (iv) of the definition of the Licensed Marks (subject,
however, to the last sentence of Section 2.3.C.) in connection with managing any
businesses or services that are ancillary to the Lodging Business, such as
travel insurance, or amenities of a Destination Club Project, Residential
Project, or Licensor Lodging Facility, such as country clubs, spas, golf
courses, food and beverage outlets, gift and sundry shops; but, for the
avoidance of doubt, this provision does not prohibit Licensor from engaging in
such businesses or providing such services under “Ritz-Carlton,” the Lion &
Crown Logo in any form, or other names or marks not contained within (i), (ii),
and (iv) of the definition of the Licensed Marks; or

(iii) use, or license any third party to use, the MVW Ritz-Carlton Business
Customer Information in connection with the marketing or selling of interests in
Destination Club Units; provided, however, that to the extent that Customer
Information concerning Licensor’s Lodging Business includes MVW Ritz-Carlton
Business Customer Information, such Customer Information may be used in such
marketing or selling so long as such customers’ ownership of Ritz-Carlton
Destination Club Products is not used specifically to target such customers in
connection with such marketing and sales activities.

B. Neither Licensor nor its Affiliates will use the Licensed Project Names in
connection with any Destination Club Project, Residential Project, or as the
primary brand name for a Licensor Lodging Facility; provided, however, that
Licensor and its Affiliates have no obligation to prohibit or otherwise restrict
third-party owners, developers, managers, licensees or franchisees of Licensor
Lodging Facilities from using such words in connection with a Destination Club
Project or Residential Project if such words are already in use or established
prior to Licensor’s involvement with the Project, whether it is a part of, or
adjacent to, any such Licensor Lodging Facility or otherwise.

2.3 Licensor’s Reserved Rights.

A. Licensee agrees that, except as set forth in Section 2.2, in the Marriott
License Agreement, and in the Noncompetition Agreement, Licensor and its
Affiliates expressly retain the right to (i) engage in any Destination Club
Business under existing brands and brands that Licensor or its Affiliates may
develop or acquire in the future, without restriction of any kind, and to use
and sublicense the use of the Licensor Intellectual Property in connection
therewith; (ii) engage in any Whole Ownership Residential Business under
existing brands and brands that Licensor or its Affiliates may develop or
acquire in the future, without restriction of any kind, and to use and
sublicense the use of the Licensor

 

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Intellectual Property in connection therewith; (iii) accept advance deposits or
payments for stays at Licensor Lodging Facilities; or (iv) accept multi-year
advanced bookings for stays at Licensor Lodging Facilities (provided that any
such multi-year advance bookings relate to specific, identified Licensor Lodging
Facilities and not on a systemwide basis); all provided that, unless Licensee
otherwise agrees in writing, no such activities above may involve or utilize in
any way the Licensee Intellectual Property.

B. For avoidance of doubt, Licensor and its Affiliates expressly retain the
right to use the name and mark “Ritz-Carlton” (but not the name and mark
“Ritz-Carlton Destination Club”, in such exact order and form) and/or the Lion &
Crown Logo in any form in connection with branding a passenger ship or cruise
line or lodging facilities on a passenger ship or cruise line, provided, that
Licensor and its Affiliates shall not use the Branded Elements for developing,
selling, marketing, managing, operating, or financing Destination Club Products
or Destination Club Units on a passenger ship or cruise line.

C. Licensee agrees that Licensor and its Affiliates expressly retain the right
to (i) engage in the Lodging Business and any other business operations except
the exclusively licensed aspects of the Destination Club Business, subject to
the Noncompetition Agreement, the Marriott License Agreement, and Sections 2.2
and 2.5; (ii) allow other Licensor Lodging Facilities operated, licensed, or
franchised by Licensor or its Affiliates to use various components of the System
(including the Reservation System) that are not used exclusively in connection
with the Destination Club Business; and (iii) use the name and mark
“Ritz-Carlton” in any form (but not the name and mark “Ritz-Carlton Destination
Club”, in such exact order and form, and subject to the last sentence in
Section 2.3.C, not the name and mark “Ritz-Carlton Club”, in such exact order
and form), the Lion & Crown Logo in any form and Branded Elements in connection
with developing, selling, marketing, managing, operating, and financing units in
a Condominium Hotel; all provided that, unless Licensee otherwise agrees in
writing, no such activities above may involve or utilize in any way the Licensee
Intellectual Property. Without limiting Section 2.2, Licensee acknowledges that
Licensor and its Affiliates use the “Ritz-Carlton Club” name and mark and
Branded Elements in connection with services and facilities provided at
Ritz-Carlton Hotels, and Licensee shall not challenge the use of “Ritz-Carlton
Club” and Branded Elements for concierge/executive levels; golf clubs, tennis
clubs, health clubs, or other sports clubs; restaurants, bars, lounges, day
clubs, night clubs, or spas, all at or in connection with or in the general
vicinity of existing and future Ritz-Carlton Hotels or Ritz-Carlton Residential
Projects, or other uses that exist as of the Effective Date by Licensor or its
Affiliates of “Ritz-Carlton Club” at or in connection with existing or future
Ritz-Carlton Hotels or Ritz-Carlton Residential Projects; provided, however,
that Licensor and its Affiliates will not use the name “Ritz-Carlton Club” (in
such exact order and form) to brand condominiums at Condominium Hotels or
Residential Projects, or in connection with the marketing or sale thereof.

D. Licensor reserves all rights in the Licensor Intellectual Property not
expressly and exclusively granted to Licensee in this Agreement, including
without limitation any individual elements or components thereof.

E. Licensee acknowledges and agrees that, notwithstanding anything in this
Agreement to the contrary, Licensor shall not be restricted in any manner from
using the terms “vacation”, “resort”, “club”, “lodge”, “villa”, “destination”,
or similar terms in connection with the development, promotion, or operation of
any of Licensor’s businesses or any geographic or locational aspect or
designation that is part of a Licensed Project Name, for example, Licensor and
its Affiliates would not be prohibited from using the term “Bachelor Gulch” or
“Gulch”, even though “Bachelor Gulch” is a Licensed Project Name.

 

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F. The Ritz-Carlton Destination Club Business licensed hereunder excludes any
passenger cruise ship or cruise line interests, usage rights, products or
services; provided, however, that (i) in the event that Licensor acquires the
right to offer cruise services using the Licensed Marks in the RHL Territory,
then at Licensee’s request, Licensor shall engage in good faith discussions with
Licensee regarding the use by Licensee of the Licensed Marks for Destination
Club Units on passenger cruise ships, and (ii) Licensee shall have the right to
offer usage rights on third party passenger cruise ships through an Exchange
Program associated solely with Ritz-Carlton Destination Club Products provided
to Members.

2.4 Licensee’s Reserved Rights.

A. Licensor agrees that, except as set forth in the Noncompetition Agreement and
the Marriott License Agreement, Licensee and its Affiliates expressly retain the
right to engage in the Lodging Business; all subject to Section 9.3.B. and
provided that, unless Licensor otherwise agrees in writing, no such activities
above may involve or utilize in any way the Licensor Intellectual Property or
the Branded Elements.

B. Licensor agrees that, except with respect to such limitations as are set
forth in this Agreement solely with respect to the MVW Ritz-Carlton Business and
in the Marriott License Agreement with respect to the Marriott Licensed
Business, Licensee and its Affiliates expressly retain the right to (i) engage
in any Destination Club Business, including under existing Licensee brands and
brands that Licensee or its Affiliates may develop or acquire in the future,
without restriction of any kind, and to use and sublicense the use of the
Licensee Intellectual Property in connection therewith; and (ii) engage in any
Whole Ownership Residential Business, including under existing Licensee brands
and brands that Licensee or its Affiliates may develop or acquire in the future,
without restriction of any kind, and to use and sublicense the use of the
Licensee Intellectual Property in connection therewith; all provided that,
unless Licensor otherwise agrees in writing, no such activities above may
involve or utilize in any way the Licensor Intellectual Property or the Branded
Elements, other than in connection with the MVW Ritz-Carlton Business and the
Marriott Licensed Business.

C. Licensee reserves all rights in the Licensee Intellectual Property, including
without limitation any individual elements or components thereof.

D. Licensor acknowledges and agrees that, other than as set forth in
Section 2.5.B, Licensee shall not be restricted in any manner from using the
terms “hotel”, “inn”, or similar terms in connection with the development,
promotion, or operation of any of Licensee’s businesses.

2.5 Similar Lines of Businesses.

A. Subject to the Permitted Territorial Restrictions, nothing in this Agreement
or in the Noncompetition Agreement is intended to prevent Licensor or its
Affiliates from remaining competitive in its core Lodging Business due to the
evolution of such business over time. Licensee agrees that Licensor and its
Affiliates shall have the right to develop, offer, operate, market and promote
products, benefits, services and rewards under any of the Proprietary Marks
(other than the names and marks “Ritz-Carlton Destination Club” or, subject to
the acknowledgment in the last sentence of Section 2.3.C., “Ritz-Carlton Club”,
each in such exact order and form) and using the Branded Elements that fall
within the definition of “Ritz-Carlton Destination Club Business”, but only to
the extent that such products, benefits, services and rewards are substantially
similar to the products, benefits, services and rewards that are not currently,
but may in the future be, provided by other international hotel operators or
franchisors as part of their hotel business (and not as a separate line of
business). Licensor must give prior notice to Licensee if it intends to offer
such products, benefits, services or rewards at least thirty (30)

 

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days prior to offering such products, benefits, services or rewards. Licensor
and its Affiliates shall not call or refer to any of its properties (or any such
products, benefits, services or rewards) as “timeshare”, “fractional” “vacation
club”, or “destination club” or similar terms commonly used for Destination Club
Projects.

B. Subject to the Permitted Territorial Restrictions and Section 8.3, nothing in
this Agreement or in the Noncompetition Agreement is intended to prevent
Licensee or its Affiliates from remaining competitive in its core Destination
Club Business due to the evolution of such business over time. Licensor agrees
that Licensee and its Affiliates shall have the right to develop, offer,
operate, market and promote products, benefits, services and rewards under the
Licensed Marks that do not fall within the definition of Ritz-Carlton
Destination Club Business, but only to the extent that that such products,
benefits, services and rewards are substantially similar to the products,
benefits, services and rewards that are not currently, but may in the future be,
provided by other developers or operators in the Destination Club Business at a
quality level equivalent to the Luxury Brand Segment, as part of their
Destination Club Business (and not as a separate line of business). Licensee
must give prior notice to Licensor if it intends to offer such products,
benefits, services or rewards at least thirty (30) days prior to offering such
products, benefits, services or rewards. Licensee and its Affiliates shall not
(i) operate, manage, license, or franchise properties that are primarily
operated as hotels (i.e., facilities containing dedicated rooms for transient
rental, except as specifically provided in Section 9.2) as part of the MVW
Ritz-Carlton Business, (ii) call or refer to any Ritz-Carlton Destination Club
Projects or Ritz-Carlton Residential Projects as “hotels”, “inns” or similar
terms commonly used for hotels, except as specifically approved in writing by
Licensor or as referred to on Licensor’s or its Affiliates’ websites or in
collateral or Marketing Content prepared by Licensor and its Affiliates;
provided, however, that the foregoing shall not be construed to impact
classification of Ritz-Carlton Destination Club Projects for zoning, licensing
or other regulatory purposes, even if such use is characterized as “hotel use”
or “transient use” for such purposes (Licensor acknowledges that the foregoing
shall not restrict Licensee from using any of the following terms commonly used
for Destination Club Projects: “resort”, “club”, “villa”, “chateau”, “house”,
“manor”, “tower”, “lodge”, “residence” or similar terms), or (iii) engage in
activities that would breach any Permitted Territorial Restrictions.

C. In the event that Licensor’s or its Affiliates’ exercise of their rights
under Section 2.5.A. has a material adverse effect on the Ritz-Carlton
Destination Club Business, or Licensee’s or its Affiliates’ exercise of their
rights under Section 2.5.B. has a material adverse effect on Licensor’s or its
Affiliates’ hotel business (or either party notifies the other that the exercise
of such rights has the potential to have a material adverse effect on the other
party’s business), then the parties shall meet to discuss alternative approaches
to mitigating such effect, or agree to some other arrangement acceptable to both
parties. In the event the parties are unable to agree on such an arrangement,
then either party shall have the right to have the matter decided by a panel of
three (3) Experts pursuant to Section 22.5; provided, that any remedy shall be
limited to a reduction or increase, as applicable, in the Royalty Fees payable
hereunder from and after the date of the resolution by the Experts (and not
retroactively for fees already paid or due).

3. FEES

3.1 Royalty Fees.

A. Licensee shall pay to Licensor a Destination Club Royalty Fee in an amount
equal to:

(i) (a) two percent (2%) of the Gross Sales Price with respect to initial sales
of interests held by Licensee, its Affiliates, or entities in which Licensee or
its Affiliates hold an

 

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Ownership Interest, in Ritz-Carlton Destination Club Units, whether directly or
through the issuance of beneficial interests, other ownership interests, use
rights, or other entitlements (whether the value of which is denominated as
points, weeks, or any other currency), including interests in a land trust or
similar real estate vehicle, and (b) one percent (1%) of the Gross Sales Price
with respect to re-sales of such interests held by Licensee, its Affiliates, or
entities in which Licensee or its Affiliates hold an Ownership Interest, in
Ritz-Carlton Destination Club Units, plus

(ii) (a) two percent (2%) of the Gross Commissions with respect to initial sales
by Licensee or its Affiliates on behalf of unrelated third parties of interests
held by such unrelated third parties in Ritz-Carlton Destination Club Units,
whether directly or through the issuance of beneficial interests, other
ownership interests, use rights, or other entitlements (whether the value of
which is denominated as points, weeks, or any other currency), including
interests in a land trust or similar real estate vehicle (and Licensee or its
Affiliates have no ownership or other beneficial interest in the interest
conveyed and are making such sales only on a commission basis) and (b) one
percent (1%) of the Gross Commissions with respect to re-sales by Licensee or
its Affiliates on behalf of unrelated third parties of such interests held by
such unrelated third parties in Ritz-Carlton Destination Club Units (and
Licensee or its Affiliates have no ownership or other beneficial interest in the
interest conveyed and are making such sales only on a commission basis).

For purposes of clarification, any sale or re-sale that is subject to a royalty
pursuant to Section 3.1.A(i) shall not be subject to a royalty pursuant to
Section 3.1.A(ii).

B. Licensee shall pay to Licensor a Residential Royalty Fee in an amount equal
to:

(i) (a) two percent (2%) of the Gross Sales Price with respect to initial sales
of interests held by Licensee, its Affiliates, or entities in which Licensee or
its Affiliates hold an Ownership Interest, in Ritz-Carlton Residential Units,
whether directly or through the issuance of beneficial interests, or other
ownership interests, in a land trust or similar real estate vehicle, and (b) one
percent (1%) of the Gross Sales Price with respect to re-sales of interests held
by Licensee, its Affiliates, or entities in which Licensee or its Affiliates
hold an Ownership Interest, in Ritz-Carlton Residential Units, plus

(ii) (a) two percent (2%) of the Gross Commissions with respect to initial sales
by Licensee or its Affiliates on behalf of unrelated third parties of interests
held by such unrelated third parties in Ritz-Carlton Residential Units (and
Licensee or its Affiliates have no ownership or other beneficial interest in
such Ritz-Carlton Residential Units and are making such sales only on a
commission basis) and (b) one percent (1%) of the Gross Commissions with respect
to re-sales by Licensee or its Affiliates on behalf of unrelated third parties
of interests held by such unrelated third parties in Ritz-Carlton Residential
Units (and Licensee or its Affiliates have no ownership or other beneficial
interest in such Ritz-Carlton Residential Units and are making such sales only
on a commission basis).

For purposes of clarification, any sale or re-sale that is subject to a royalty
pursuant to Section 3.1.B(i) shall not be subject to a royalty pursuant to
Section 3.1.B(ii).

C. (i) The sale of interests that were previously sold to end-user customers and
are subsequently repurposed as other types of interests (for example, interests
that are initially sold in the form of a weeks-based Destination Club Product
and are subsequently repurposed in the form of a trust-based beneficial interest
Destination Club Product or interests that are initially sold as interests in
Residential Units and are subsequently repurposed as interests in Destination
Club Units) shall be considered a re-sale for purposes of Section 3.1.A and
3.1.B.

 

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(ii) A sale occurs with respect to the initial sale or re-sale of an interest in
Ritz-Carlton Destination Club Units or Ritz-Carlton Residential Units when all
of the following conditions have been satisfied:

(a) A written agreement (“Purchase Contract”) is executed by a purchaser and has
been accepted by Licensee or its Affiliates pursuant to which such purchaser
contractually commits to acquire such interest;

(b) With respect to purchase money financing provided by or through Licensee or
its Affiliates, if any, such purchaser has duly executed all applicable sales
and purchase money financing documents in respect of such Purchase Contract;

(c) Such purchaser has duly tendered payment of the full purchase price in
respect of such Purchase Contract (or full installment thereof in the case of
purchase money financing, as applicable) by cash, by check which has cleared, or
by credit card which has been duly processed) to either (x) Licensee or its
Affiliates or (y) a fiduciary, escrow agent, trustee or other independent
third-party designated by Licensee or its Affiliates, as may be required by law;

(d) All rescission periods applicable to such Purchase Contract have expired,
without any such right of rescission having been exercised; and

(e) All pre-conditions set forth in such Purchase Contract and any legal
requirements under Applicable Law in order to close the transaction which is the
subject of the Purchase Contract as set forth in such Purchase Contract shall
have been duly satisfied, without the purchaser having exercised any right of
cancellation afforded such purchaser under the terms of such Purchase Contract
or under Applicable Law.

(iii) The conversion of interests that were previously sold to end-user
customers on an equivalent value basis into other types of interests that derive
their value from the interests being converted (for example, interests that are
initially sold in the form of a weeks-based Destination Club Product and are
subsequently converted to a trust-based beneficial interest Destination Club
Product) shall not be considered an initial sale or a re-sale for purposes of
Section 3.1.A.

(iv) The exchange of interests that were previously sold to end-user customers
for initial developer inventory (whether weeks-based, points-based, or
otherwise) shall be considered an initial sale of such initial developer
inventory for purposes of Section 3.1.A.

(v) The exchange of interests that were previously sold to end-user customers
for inventory that had been previously sold to an end-user customer (whether
weeks-based, points-based, or otherwise) shall be considered a re-sale of such
inventory for purposes of Section 3.1.A.

D. The Gross Sales Price shall, for purposes of calculating the Royalty Fees
under Sections 3.1.A and 3.1.B, include the amount of any newly-created initial
or ongoing, recurring, or installment fees or charges that may be imposed by
Licensee or its Affiliates after the Effective Date that are currently included,
free of separate charge, for the rights, benefits and services currently
obtained by purchasers of interests in Ritz-Carlton Destination Club Units and
Ritz-Carlton Residential Units, respectively, upon payment of the purchase price
thereof (other than promotional or trial features for

 

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which separate fees or charges may be contemplated), or the amount by which any
other fees existing as of the Effective Date are increased after the Effective
Date, as a direct or indirect offset to any decrease in the purchase price of an
interest in a Ritz-Carlton Destination Club Unit. In the event any such new or
changed fee or charge is implemented, the Royalty Fee shall be restructured such
that the amount of the Royalty Fee Licensor receives is not reduced as a result
of the implementation of such new or changed fee or charge, which restructuring
may, by agreement of the parties, include adding to the Gross Sales Price the
net present value of fees or charges that are paid on an ongoing, recurring, or
installment basis discounted by discount rate of ten percent (10%).

E. The Gross Sales Price shall, for purposes of calculating the Royalty Fees
under Sections 3.1.A and 3.1.B, exclude the amount attributable to a gross up
for imputed interest associated with a zero percent (0%) or below market
interest rate program used in relation to financing a purchaser’s acquisition of
interests in Ritz-Carlton Destination Club Units or Ritz-Carlton Residential
Units, but only where the Gross Sales Price is offered at different amounts to
the customers on a programatic basis, depending on the financing or payment
terms selected by the customer.

F. The Royalty Fees shall be earned as and when a contract for the sale of an
interest in a Ritz-Carlton Destination Club Unit or a Ritz-Carlton Residential
Unit, as applicable, is closed, regardless of when, or whether, any part of the
Gross Sales Price or Gross Commissions, as applicable, are actually paid to, or
received by or on behalf of, Licensee and/or its Affiliates. For the avoidance
of doubt, the Royalty Fees shall not be due for any interests in Ritz-Carlton
Destination Club Units or Ritz-Carlton Residential Units for which the sales
contracts were signed prior to 12:01 am Eastern Standard Time on December 3,
2011, regardless of when such sales contracts actually close.

3.2  Usage Fees and Reimbursable Expenses; Maintenance Costs; Reimbursements of
Amounts Due Under RHL Agreement.

A. Licensee shall pay to Licensor or its Affiliates the Licensor Usage Fees for
ongoing services provided by Licensor and/or its Affiliates, including the use
of certain Electronic Systems and other systems, copyrights, and other materials
owned by Licensor or its Affiliates, as applicable, under this Agreement and the
related reimbursable expenses in accordance with the practices of the parties as
of the date of the Spin-Off Transaction, to be documented by the parties. If
Licensee fails to pay to Licensor or its Affiliates any Licensor Usage Fees or
related reimbursable expenses, Licensor may provide notice to Licensee of
Licensor’s intention to offset any amounts that Licensor may owe to Licensee
hereunder by the amount of the Licensor Usage Fees or reimbursable expenses owed
by Licensee or its Affiliates. If Licensee notifies Licensor in writing that it
disputes that such amounts are due within ten (10) business days following the
date on which Licensor provided the notice of its intention to offset such
amounts, Licensor will not offset such amounts until such dispute is resolved.
If Licensee does not dispute that such amounts are owed within such timeframe,
Licensor may offset such amounts. Licensor’s offset of such amounts shall be
deemed a waiver by Licensor and its Affiliates of damages and extra-contractual
remedies arising out of or related to Licensee’s failure to pay such amounts. If
Licensor elects to offset such amounts, and Licensee requests supporting
documentation in writing, Licensor will provide Licensee with documentation
evidencing in reasonable detail the amount of, and the manner of calculating,
such offset.

B. With respect to any systems and materials that Licensee owns and licenses to
Licensor, Licensor will pay to Licensee the applicable usage fee as determined
by Licensee on a fair, commercially reasonable and non-discriminatory basis.
Licensor will have the right to offset any amounts that Licensor may owe to
Licensee under this Section 3.2.B against amounts that Licensee owes to Licensor
under this Agreement, in which case Licensor shall provide notice to Licensee of
Licensor’s election to offset such amounts not less than fifteen (15) business
days prior to the date on which the

 

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payment from Licensee to be offset is due. If Licensor fails to pay to Licensee
or its Affiliates (or provide an offset as contemplated in the immediately
preceding sentence for) any amounts owed under this Section 3.2.B, Licensee may
provide notice to Licensor of Licensee’s intention to offset any amounts that
Licensee may owe to Licensor hereunder by the amount owed by Licensor or its
Affiliates to Licensee or its Affiliates under this Section 3.2.B. If Licensor
notifies Licensee in writing that it disputes that such amounts are due within
ten (10) business days following the date on which Licensee provided the notice
of its intention to offset such amounts, Licensee will not offset such amounts
until such dispute is resolved. If Licensor does not dispute that such amounts
are owed within such timeframe, Licensee may offset such amounts. Licensee’s
offset of such amounts shall be deemed a waiver by Licensee and its Affiliates
of damages and extra-contractual remedies arising out of or related to
Licensor’s failure to pay such amounts. If Licensee elects to offset such
amounts, and Licensor requests supporting documentation in writing, Licensee
will provide Licensor with documentation evidencing in reasonable detail the
amount of, and the manner of calculating, such offset.

C. Licensee shall reimburse Licensor and its Affiliates for all royalty,
license, and other fees and other amounts due to RHL under the RHL Agreement in
connection with the development, use, lease, marketing, and/or sale of interests
in Ritz-Carlton Destination Club Units and Ritz-Carlton Residential Units at
Projects within the RHL Territory. Licensor will not agree to an amendment of
the RHL Agreement (i) to increase such fees without Licensee’s prior written
consent, unless Licensor agrees to pay the amount of any increase in such fees,
as and when due, or (ii) in a manner that will otherwise materially adversely
affect Licensee’s rights hereunder.

3.3 Other Charges; Changes to Fees, Expenses and Charges; Other Costs.

A. Licensee must pay to Licensor or its Affiliates an amount specified by
Licensor for (i) any training (including tuition, supplies, and Travel Expenses
and allocations of internal costs and overhead of Licensor and its Affiliates)
in which Licensee participates, (ii) purchasing, staging, programming,
installing, interfacing and upgrading of Hardware and Software for Electronic
Systems as set forth in Section 10.1, (iii) any goods or services purchased,
leased or licensed by Licensee from Licensor or an Affiliate of Licensor, and
(iv) any programs of Licensor or its Affiliates in which Licensee participates.

B. Charges for items described in Sections 3.2 and 3.3.A. will be calculated as
follows: (i) where participation is mandatory or necessary for the operation of
the MVW Ritz-Carlton Business such charges (including expenditures made by a
marketing fund) will be determined on a fair and commercially reasonable basis
and in a manner consistent with the manner in which such charges are made with
respect to the Licensor Lodging Facilities receiving the services or
participating in the programs and systems to which such fees, expenses or costs
are applicable and, where appropriate, shall take into account the manner and
extent to which such services, programs, or systems are used by the MVW
Ritz-Carlton Business; and (ii) where such participation is optional or is not
necessary for the operation of the MVW Ritz-Carlton Business, such charges will
be determined in a manner consistent with the manner in which such charges are
made with respect to the Licensor Lodging Facilities receiving the services or
participating in the programs or systems to which such fees, expenses, or costs
are applicable. Licensor may change the fees, expenses, and costs payable under
Sections 3.2 or 3.3.A. for services that Licensee receives and programs and
Electronic Systems in which Licensee participates to reflect the following:
(i) any increase or decrease in the costs and expenses of providing the relevant
service; (ii) any change in the method Licensor uses to determine allocation of
the applicable payments; or (iii) any change as a result of competition in the
business which is the subject of the MVW Ritz-Carlton Business, including
changes to the basis for charging for the Usage Fees for Electronic Systems.
Licensor will notify Licensee of any such change in the ordinary course of
business.

 

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3.4 Travel Expenses and Reimbursement.

Licensee must pay to Licensor all Travel Expenses for: (i) individuals who
provide initial, ongoing, and remedial training under this Agreement; and
(ii) Licensor’s and its Affiliates’ corporate and regional representatives
visiting any of the Projects or Licensee’s corporate offices for re-inspections
following any failed inspection conducted under the Quality Assurance Program.
In addition to such Travel Expenses, Licensee must reimburse Licensor, or such
other Person designated by Licensor, for the salary and other compensation of
any individuals providing training with respect to any Project or the MVW
Ritz-Carlton Business or conducting re-inspections, and arrange for lodging at
the Project (or, if space is unavailable at the Project, at another lodging
facility of comparable quality to Licensor Lodging Facilities) for any inspector
on official duty for such time as may be reasonably necessary and to Licensor’s
representatives or independent auditors while conducting and completing audits
pursuant to Section 15.3. Licensee shall not be obligated to provide
accommodations or pay Travel Expenses in excess of what would be required under
Licensor’s internal travel reimbursement policies; provided, however, that such
reimbursements shall not include first class air travel.

3.5 Marketing and Sales Fees and Charges.

A. Licensor may propose marketing or sales programs in which Licensee may elect
to participate. If Licensee elects to participate in any such program, Licensee
shall pay the applicable fees and charges for Licensee’s participation in such
program. The determination of the fees and charges for Licensee’s participation
in such programs shall, where appropriate, take into account the relevant
differences between the MVW Ritz-Carlton Business and the other participants in
such programs.

B. Licensee may propose marketing or sales programs in which Licensor may elect
to participate. If Licensor elects to participate in any such program, Licensor
shall pay the applicable fees and charges for Licensor’s participation in such
program. Licensee acknowledges that the funds Licensor uses to pay any such fees
or charges for participation in any such program may be derived from Licensor
Lodging Facilities or marketing fund(s) to which Licensor Lodging Facilities
contribute. The determination of the fees and charges for Licensor’s
participation in such programs shall, where appropriate, take into account the
relevant differences between the Licensor’s Lodging Business and the other
participants in such programs.

3.6 Making of Payments; Delegation of Duties and Performance of Services.

A. The Royalty Fees payable under Section 3.1 shall be paid within fifteen
(15) days following the end of each calendar quarter during the Term and during
the tail period contemplated in Section 4.2.B for the immediately preceding
Accounting Period quarter along with any reports required under Section 15.2.
All other payments required by this Agreement, whether payable by Licensee or
its Affiliates to Licensor or its Affiliates or by Licensor or its Affiliates to
Licensee or its Affiliates, will be made within thirty (30) days after receipt
by Licensee or its Affiliate or Licensor or its Affiliate, as the case may be,
of each statement for such payment. Payments due to either party or their
respective Affiliates, unless otherwise agreed, will be paid by wire transfer of
immediately available funds by Licensee to Licensor or by Licensor to Licensee,
as applicable, in the United States to the accounts designated by the receiving
party.

B. Licensor has the right to have any service or obligation of Licensor under
this Agreement be performed by an Affiliate of Licensor, and Licensee agrees to
accept performance by such Affiliate. Licensor may designate that payment be
made to one of its Affiliates instead of Licensor, and Licensee and its
Affiliates must make such payments as designated; provided, however, that
Licensee and its Affiliates shall have no obligation to pay more than it
otherwise would have paid had Licensor not made such designation.

 

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C. To the extent that Licensee has the right under this Agreement to have any
service or obligation of Licensee under this Agreement be performed by an
Affiliate of Licensee, Licensor agrees to accept performance by such Affiliate.
Licensee may designate that payment be made to one of its Affiliates instead of
Licensee, and Licensor and its Affiliates must make such payments as designated;
provided, however, that Licensor and its Affiliates shall have no obligation to
pay more than it otherwise would have paid had Licensee not made such
designation.

3.7 Interest on Late Payments.

If any payment due under this Agreement is not received by the party to which
such payment is due on or before its due date, such payment will be deemed
overdue, and paying party must pay to the receiving party, in addition to the
overdue amount, interest on such overdue amount which will accrue at a rate per
annum equal to the Interest Rate from the date such overdue amount was due until
paid. Interest is not in lieu of any other remedies the receiving party may
have.

3.8 Currency and Taxes.

A. All amounts payable to Licensor or Licensee or their respective Affiliates
under this Agreement, the Electronic Systems License Agreement, and the Design
Review Addendum and, except as expressly otherwise agreed to by the parties, any
other payments required for services provided to Licensee or its Affiliates by
Licensor or its Affiliates pursuant to this Agreement, including those provided
under Section 11.2 (including any judgment or arbitral award) must be paid in
United States Dollars (collectively, “Payment Obligations”).

B. Licensee and its Affiliates must promptly pay when due all Taxes levied or
assessed against Licensee and its Affiliates by any Tax authority relating to
the Projects and the MVW Ritz-Carlton Business, Licensee, its Affiliates, this
Agreement, the Payment Obligations, or in connection with the operation of the
Projects or the MVW Ritz-Carlton Business.

C. Subject to Section 3.8.D., Licensor and its Affiliates must promptly pay when
due all Taxes levied or assessed against Licensor and its Affiliates by any Tax
authority relating to the Projects and the MVW Ritz-Carlton Business, Licensor,
its Affiliates, this Agreement, the Payment Obligations, or in connection with
the operation of the Projects or the MVW Ritz-Carlton Business.

D. Except with respect to the Royalty Fees required to be paid under
Section 3.1, any amount to be paid or reimbursed under this Agreement to
Licensor or Licensee or their respective Affiliates, for reimbursable expenses,
including Travel Expenses, shall be made free and clear and without deduction
for any Taxes so that the amount actually received in respect of such payment
(after payment of Taxes) equals the full amount stated to be payable in respect
of such payment. To the extent any Applicable Law requires or allows deduction,
payment or withholding of Taxes to be paid by the paying party directly to a
governmental authority, the paying party must account for and pay such amounts
promptly and provide to the receiving party receipts or other proof of such
payment promptly upon receipt.

 

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4. TERM

4.1 Initial Term.

The initial term of this Agreement begins on the Effective Date and expires
December 31, 2090 (the “Initial Term”).

4.2 Extension Term; Tail Period.

A. With respect to the Non-RHL Territory,

(i) Licensee shall have the right to obtain two (2) additional extension terms
of thirty (30) years each (each, an “Extension Term”). Licensee must meet the
following conditions in order to obtain each Extension Term: (a) Licensee must
provide Licensor with notice of its desire to obtain the applicable Extension
Term not earlier than January 1, 2050 or later than December 31, 2080 for the
first Extension Term and not earlier than January 1, 2080 or later than
December 31, 2110 for the second Extension Term; (b) Licensee must obtain an
extension term with respect to the Marriott License Agreement pursuant to the
terms and conditions thereof corresponding to the Extension Term obtained under
this Agreement; and (c) the sale of interests in Ritz-Carlton Destination Club
Units and Ritz-Carlton Residential Units during the twelve (12) months
immediately preceding the date of such notice must have generated twenty-five
million dollars ($25,000,000) or more in revenues from the Gross Sales Prices.

(ii) For a “tail period” of thirty (30) years following the end of the Initial
Term (if Licensee does not exercise its right to obtain an Extension Term), the
first Extension Term (if Licensee does not exercise its right to obtain a second
Extension Term), or the second Extension Term, as applicable (but not following
any termination of this Agreement under Section 18), Licensee shall be entitled
(but not required) to continue to operate the then-existing Ritz-Carlton
Destination Club Projects and Ritz-Carlton Residential Projects (including any
New Projects under development as contemplated in (y) below) in the Territory
(provided, however, Licensee shall have no right (subject to Section 13.1.E.) to
use the Licensed Marks or the System in the Excluded Area and shall not have the
right to any indemnity under Section 16.1.B. with respect to third-party claims
resulting from Licensee’s or its Affiliates’ use of the Licensed Marks or the
System in the Excluded Area, and any third-party claim related to the use of the
Licensed Marks or the System in the Excluded Area shall be subject to
indemnification by Licensee pursuant to Section 16.1.A.), provided that such
operation is in compliance with the terms and conditions of this Agreement. The
parties agree that (x) the exclusivity granted in Section 1.A. and the
restrictions and limitations on Licensor and its Affiliates in Section 2.2 shall
immediately cease and be of no further force or effect as of the first day of
the tail period and (y) Licensee shall have no right to propose New Projects
during the tail period (but will have the right to continue and complete the
development of any New Projects that have been approved by Licensor pursuant to
this Agreement prior to the commencement of the tail period). All other
applicable terms and conditions of this Agreement, including, without
limitation, the requirement to pay the Royalty Fees and other amounts under
Sections 3 and 11, shall remain in place and be applicable during the tail
period.

B. With respect to the RHL Territory, Licensee shall have the same extension
rights provided for in Section 4.2.A., but only to the extent that the term of
the RHL Agreement is so extended. If such RHL Agreement term extension is
obtained after January 1, 2078, Licensee shall have five (5) years after
Licensee receives notice of such extension in order to provide notice to
Licensor of its election to obtain the first Extension Term. If the RHL
Agreement expires or is terminated for any reason prior to expiration or
termination of this Agreement and if such expiration or termination of the RHL
Agreement results in Licensor losing the ability to license the Licensed Marks
to Licensee in the RHL Territory, then

 

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the license of the Licensed Marks and the System with respect to the RHL
Territory shall expire on the date on which the RHL Agreement expires or is
terminated, Licensee shall have no right to operate under the Licensed Marks or
the System within the RHL Territory during any “tail period” following such
expiration or termination, and Licensee shall also have the right to terminate
this Agreement with respect to the Non-RHL Territory in connection with the
expiration or termination of the RHL Agreement upon notice to Licensor, which
Licensee must provide to Licensor within one hundred eighty (180) days following
the date on which the license of the Licensed Marks and the System with respect
to the RHL Territory expires pursuant to this sentence.

5. EXISTING PROJECTS; DEVELOPMENT RIGHTS AND RESTRICTIONS

5.1 Existing Projects.

A. The Existing Projects are listed on Exhibit B to this Agreement. Licensee may
continue to operate the Existing Projects under the System and Brand Standards
in accordance with the terms and conditions of this Agreement. Each Existing
Project may operate only under the applicable Project name set forth in Exhibit
B, which Project name may be changed only in accordance with the naming protocol
set forth in the Brand Standards.

B. In the event that Licensee delegates (or prior to the Effective Date has
delegated) the authority to operate an Existing Project to an Affiliate,
Licensee shall sublicense to such Affiliate the right to operate the applicable
Existing Project under the form of sublicense agreement attached as Exhibit E,
under which such Affiliate will be required to operate the Existing Project in
accordance with the sublicense agreement and the terms and conditions of this
Agreement, and such Affiliate will agree to be bound by the same
responsibilities, limitations, and duties of Licensee under this Agreement with
respect to such Existing Project. Licensee shall provide Licensor with a
fully-executed copy of each sublicense agreement entered into hereunder promptly
following its execution and will notify Licensor in writing upon the termination
or expiration of any sublicense agreement. Except to the extent required by
Applicable Law, Licensee shall not amend or otherwise modify any such sublicense
agreement without Licensor’s prior written approval.

5.2 New Projects.

A. Licensee shall provide Licensor with an application (“New Project
Application”) in the form attached hereto as Exhibit K for each proposed New
Project. The form of New Project Application may be modified by Licensor as
required for compliance with Applicable Law or as mutually agreed by the parties
hereto.

B. Licensor may reject a proposed New Project only if:

(i) Licensor determines that the proposed New Project does not meet the
applicable Brand Standards related to construction and design or that the
location of the proposed New Project does not meet applicable Brand Standards or
is otherwise not appropriate for the proposed New Project;

(ii) Licensor determines that the development of the proposed New Project would
breach, or be reasonably likely to breach, any Permitted Territorial
Restrictions or restrictions imposed by Applicable Law on Licensor and its
Affiliates;

(iii) Licensor determines that it is unable, or it is not feasible for Licensor,
to manage the proposed New Project in compliance with Brand Standards (other
than a proposed New Project that meets the requirements of Section 8.3.B(ii) and
that a Management Company approved by Licensor will manage as a Non-RCHC Managed
Project);

 

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(iv) the proposed New Project will involve a co-investor with Licensee and such
co-investor is (a) a Lodging Competitor of Licensor, (b) is known in the
community as being of bad moral character, (c) has been convicted in any court
of a felony or other offense that could result in imprisonment for one (1) year
or more or a fine or penalty of one million dollars ($1,000,000) (as adjusted
annually after the Effective Date by the GDP Deflator) or more (or is in control
of or controlled by Persons who have been convicted in any court of felonies or
such offenses), or (d) is, or has an Affiliate that is, a Specially Designated
National or Blocked Person;

(v) Licensee or its Affiliate, as applicable, fails or refuses to undertake at
the time that the New Project Application is submitted to execute an RCHC
Management Agreement for such proposed New Project under which Licensor or its
Affiliate will provide on-site management of the proposed New Project at least
thirty (30) days prior to the opening of the applicable New Project to the
public for business and, in fact, execute such RCHC Management Agreement within
such timeframe, unless such proposed New Project is a Non-RCHC Managed Project
pursuant to Section 8.3.B. The fee payable to Licensor or its Affiliate under
such RCHC Management Agreement must be consistent with past practice and the
then-prevailing market conditions; or

(vi) Licensee or its Affiliate fails or refuses to undertake at the time that
the New Project Application is submitted to execute an operating agreement with
the applicable Property Owners’ Association at least thirty (30) days prior to
the opening of the applicable New Project to the public for business and, in
fact, execute such operating agreement within such timeframe. Such operating
agreement shall not include any material changes from the form of operating
agreement that is generally in use as of the Effective Date that are materially
adverse to Licensee or Licensor as reasonably determined by Licensor, and such
operating agreement must accommodate the then-current RCHC Management Agreement
template.

Any proposed New Projects that are Non-RCHC Managed Projects pursuant to
Section 8.3.B. and that are located in a larger development that includes
Destination Club Units or Residential Units that has a separate identifying name
shall be identified using the following (or substantially similar) convention:
“The [Ritz-Carlton Club][Ritz-Carlton Residences] at [name of project in which
units are located].”

If Licensor does not approve the proposed New Project under Sections 5.2.B(i),
(ii), (iii), (iv), (v), or (vi) above and Licensee disagrees with such
determination, then Licensee may refer the matter for Expert resolution pursuant
to Section 22.5. The Expert shall make its determination based upon whether
Licensor’s rejection was reasonable, given the market positioning and Brand
Standards applicable to the proposed New Project. Additionally, if Licensor did
not approve the proposed New Project based on its determination that the
location of the proposed New Project did not meet applicable Brand Standards or
was otherwise not appropriate for the proposed New Project, the Expert shall
determine whether the proposed location would be appropriate for Ritz-Carlton
Hotels based on the market positioning and brand standards applicable to
Ritz-Carlton Hotels, and if the Expert determines that the proposed location
would be so appropriate, then the proposed location shall be deemed appropriate
for the proposed New Project.

C. Each New Project may operate only under the applicable Project name agreed to
by the parties in accordance with the naming protocol set forth in the Brand
Standards, which Project name may be changed only in accordance with the naming
protocol set forth in the Brand Standards.

 

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D. (1) In the event that Licensee delegates the authority to develop a New
Project to an Affiliate, Licensee shall sublicense to such Affiliate the right
to develop such New Project under the form of sublicense agreement attached as
Exhibit E, under which such Affiliate will be required to develop the New
Project in accordance with the sublicense agreement and the terms and conditions
of this Agreement, and such Affiliate will agree to be bound by the same
responsibilities, limitations, and duties of Licensee under this Agreement with
respect to such New Project.

(2) In the event that Licensee delegates the authority to operate a New Project
to an Affiliate, Licensee shall sublicense to such Affiliate the right to
operate such New Project under the form of sublicense agreement attached as
Exhibit E, under which such Affiliate will be required to operate the New
Project in accordance with the sublicense agreement and the terms and conditions
of this Agreement, and such Affiliate will agree to be bound by the same
responsibilities, limitations, and duties of Licensee under this Agreement with
respect to such New Project.

(3) Licensee shall provide Licensor with a fully-executed copy of each
sublicense agreement entered into hereunder promptly following its execution and
will notify Licensor in writing upon the termination or expiration of any
sublicense agreement. Except to the extent required by Applicable Law, Licensee
shall not amend or otherwise modify any such sublicense agreement without
Licensor’s prior written approval.

E. If the offer or execution of the sublicense agreement for any Existing
Project or proposed New Project (including any New Project that is to be
developed through a third party) results in a requirement for Licensee to comply
with regulatory requirements, including, without limitation, the preparation and
provision to the Project developer of a disclosure document or filing of the
disclosure document or other documents with regulatory authorities, Licensee
shall comply with such regulatory requirements at its sole cost and expense and
provide Licensor with evidence satisfactory to Licensor of Licensee’s compliance
therewith within the timeframe required by the applicable regulations. If
Licensor determines that Licensor is required to comply with such regulatory
requirements in connection with any Existing Project or proposed New Project,
Licensee will fully cooperate with Licensor with respect to Licensor’s
compliance requirements, and Licensor will not charge Licensee any amounts for
costs incurred by Licensor in connection with Licensor’s compliance
requirements.

F. Notwithstanding anything in Section 5.2.B. to the contrary, Licensor has the
right to approve or reject proposed New Projects that include Ritz-Carlton
Residential Units in Licensor’s sole discretion; provided, however, that,
instead of Licensor’s sole discretion, the approval conditions in Section 5.2.B.
shall apply if Licensee wishes to pursue the development, sale, marketing,
operation, or financing of Ritz-Carlton Residential Units as part of a
Ritz-Carlton Destination Club Project (“Mixed-Use Project”), where both (i) the
number of Ritz-Carlton Destination Club Units in such Mixed-Use Project is at
least thirty-five percent (35%) of the combined number of Ritz-Carlton
Destination Club Units and Ritz-Carlton Residential Units in such Mixed-Use
Project, and (ii) the total number of Ritz-Carlton Residential Units in such
Mixed-Use Project is thirty-five (35) or fewer. Additionally, Licensor hereby
pre-approves Residential Units to be developed at Licensee’s Existing Projects,
subject to such Residential Units meeting the then-current Design Guide for new
Ritz-Carlton Residential Units.

G. All New Projects that are added to Licensed Non-Site Specific Destination
Club Programs must initially be operated under the Licensed Marks in accordance
with the System and this Agreement, it being acknowledged that such New Projects
are subject to being Deflagged in accordance with the terms of this Agreement.
At Licensor’s request, Licensee’s rights to include a Non-Site Specific
Destination Club Ownership Vehicle as part of a Licensed Non-Site Specific
Destination Club Program shall be discontinued if at any time the aggregate
interests in Ritz-Carlton Destination Club Units that are held by such Non-Site
Specific Destination Club Ownership Vehicle is less than one-half (1/2) of the
aggregate interests in all Destination Club Units that are held by such Non-Site
Specific Destination Club Ownership Vehicle.

 

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H. Pursuant to Section 5.2.G. of the Marriott License Agreement, Licensee shall
have the right to include inventory of Destination Club Units in Existing
Projects and Residential Units in Existing Projects as part of Licensed
Destination Club Products (as defined in the Marriott License Agreement) under
the Marriott License Agreement, provided, that Licensee provide prior notice to
Licensor thereof.

I. With respect to any new Ritz-Carlton Residential Projects, Licensor will
agree not to develop, operate, or authorize a third-party to develop or operate
a Ritz-Carlton Residential Project for a period of four (4) years from the
commencement of residential sales, or the initial sale of all of the
Ritz-Carlton Residential Units in such Project, whichever comes first, within a
geographic area to be agreed to by the parties on a case-by-case basis based on
market characteristics and other relevant factors. Licensee shall only have the
right to develop and sell one (1) such Mixed-Use Project within any such
territorial area for the term of the territorial restriction.

5.3 Undeveloped Parcels Pre-Approved.

Parcels owned by Licensee or its Affiliates but which have not been developed as
of the Effective Date are listed on Exhibit B-1 (“Undeveloped Parcels”).
Licensor hereby approves the Undeveloped Parcels as sites for Projects;
provided, however, that Projects developed on any such Undeveloped Parcel must
be developed and operated in accordance with the terms and conditions of this
Agreement, including, without limitation, Section 6.3 and the then-current Brand
Standards related to construction and design for New Projects.

5.4 Projects Located at Hotels other than Licensor Lodging Facilities.

A. Licensee will not develop any New Projects that are located in, co-located in
conjunction with, or are otherwise a part of a hotel (“Co-Located Hotel”) that
is not a Licensor Lodging Facility without using commercially reasonable efforts
to secure for Licensor a right to negotiate with the owner of the Co-Located
Hotel for the management of the Co-Located Hotel by Licensor or its Affiliate
(if Licensee does not intend to manage the Co-Located Hotel). Additionally, if
Licensee or one of its Affiliates is the owner of the Co-Located Hotel, Licensee
or its Affiliate will negotiate with Licensor in a commercially reasonable
manner to enter into a management agreement with Licensor or its Affiliate (if
Licensee does not intend to manage the Co-Located Hotel) on Licensor’s or its
Affiliate’s then-current form of management agreement with such changes as
Licensee and Licensor or its Affiliate agree. Licensee shall provide Licensor
with notice (the “Negotiation Opportunity Notice”) of any such proposed New
Project and the opportunity for Licensor to negotiate for the management of the
Co-Located Hotel.

B. Notwithstanding the foregoing, subject to Licensor’s approval of the New
Project, which approval may be granted or withheld in Licensor’s reasonable
business judgment, Licensee shall have the right to develop any New Project that
is located in, co-located with, or are otherwise a part of (i) a Co-Located
Hotel that is subject to a hotel management or other agreement which would
preclude Licensor and its Affiliates from managing or franchising such
Co-Located Hotel; (ii) a Co-Located Hotel with respect to which Licensor does
not wish to enter into a management agreement; or (iii) a Co-Located Hotel with
respect to which Licensor and the hotel owner cannot agree on the terms of a
management agreement within sixty (60) days after the date on which Licensor
receives the Negotiation Opportunity Notice. In such event, Licensor may require
that Licensee and the hotel owner agree to reasonable restrictions on the
sharing of entrances, signage, facilities and services to ensure a level of
brand separation sufficient to avoid customer confusion as to the relationship
between the Project and the Co-

 

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Located Hotel as determined by Licensor in its reasonable business judgment
having regard to (x) what restrictions are practicable and feasible based on the
physical configuration of the Project, the Co-Located Hotel, the development in
which they are situated, and any applicable ingress and egress constraints and
(y) exceptions to such restrictions then in effect that Licensor customarily has
agreed to in previous similar situations.

C. The provisions of Sections 5.4.A and 5.4.B shall not apply to any Co-Located
Hotel that is or has been Deflagged as a Licensor Lodging Facility. Upon the
Deflagging as a Licensor Lodging Facility of a Co-Located Hotel, Licensor and
Licensee will use good faith efforts to agree to reasonable parameters for
providing appropriate brand separation to the extent commercially feasible.

D. Any disputes regarding this Section 5.4 shall be subject to Expert resolution
pursuant to Section 22.5.

5.5 Prohibitions To Be Included in Future Management Agreements.

A. Licensor will include in the initial draft of future Ritz-Carlton Hotel
management and operating agreements with third-party hotel owners and in future
license and development agreements for Residential Projects to be operated under
the Proprietary Marks, prohibitions on the operation, promotion and sale of
interests in Destination Club Projects, other than Ritz-Carlton Destination Club
Projects, at the applicable hotel or Residential Project and attempt to persuade
such third-party hotel owners to agree to retain such prohibitions in the
applicable agreements. However, Licensor will not be required to offer any
concessions to such third-party hotel owners in order to retain such
prohibitions in the applicable agreements.

B. Licensee acknowledges and agrees that, provided Licensor meets the
requirements of Section 5.5.A. as expressly set forth therein, neither Licensor
nor its Affiliates will have any liability under this Agreement for failure to
obtain such prohibitions in such agreements under this Section 5.5. This
Section 5.5 shall not affect any other obligations of Licensor and its
Affiliates hereunder.

5.6 Destination Club Projects at Third-Party Owned Ritz-Carlton Hotels.

If a third-party developer of a Ritz-Carlton Hotel desires to have a Destination
Club Project as a component of or adjacent to such Ritz-Carlton Hotel project
(the “Co-Located Ritz-Carlton Hotel”), Licensor will use commercially reasonable
efforts to secure for Licensee a right to negotiate with such developer
regarding Licensee’s involvement in such Destination Club Project. Licensor
shall provide Licensee with notice (the “Negotiation Opportunity Notice”) of any
opportunity for Licensee to negotiate regarding Licensee’s involvement in such
Destination Club Project. If Licensee declines to participate or cannot reach
agreement with such developer and Licensor regarding Licensee’s involvement in
such Destination Club Project within sixty (60) business after the date on which
Licensee receives the Negotiation Opportunity Notice, then Licensor will have
the right to proceed (and permit such developer to proceed) with such
Destination Club Project without Licensee’s involvement. Licensor shall not use
or permit the use of any of the Licensed Marks or Branded Elements in connection
with such Destination Club Project; provided, however, that (x) the marketing,
offering, and selling of units in any such Destination Club Project at the
Co-Located Ritz-Carlton Hotel to any Person, including guests of the Co-Located
Ritz-Carlton Hotel, whether or not such guest is a member of any Brand Loyalty
Program, provided, that such Destination Club Project is not affiliated with a
Destination Club Competitor (y) the placing of overflow guests of the Co-Located
Ritz-Carlton Hotel in such Destination Club Project on a transient basis, and
(z) the offering of potential customers of such Destination Club Project stays
at the Co-Located Ritz-Carlton Hotel in connection with the marketing and sale
of the units of such adjacent Destination Club Project, shall not be deemed to
be a violation hereof.

 

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5.7 Limitations on MVW Ritz-Carlton Business; Compliance with Contractual
Restrictions.

A. Licensor shall not enter into any contract or agreement that purports to
limit or restrict Licensee’s or its Affiliates’ right to engage in the
Ritz-Carlton Destination Club Business or the Ritz-Carlton Whole Ownership
Residential Business. Provided, that the Agreed Territorial Protections (defined
below) contain an express carve-out for the Ritz-Carlton Destination Club
Business and the Ritz-Carlton Whole Ownership Residential Business, (i) nothing
in this Section 5.7.A will restrict or limit Licensor’s or its Affiliates’
ability to grant territorial protections (“Agreed Territorial Protections”)
solely with respect to hotels, resorts and other lodging facilities to owners,
developers, operators, lessees, licensees, or franchisees of any Licensor
Lodging Facilities, and (ii) Licensor will not be in breach of this Agreement as
a result of the grant of such Agreed Territorial Protections or the enforcement
or the attempted enforcement of such Agreed Territorial Protections against
Licensee or its Affiliates by such owners, developers, operators, lessees,
licensees, or franchisees.

B. Licensee agrees to abide by (i) all territorial and other contractual
restrictions applicable to Licensor and/or its Affiliates relating to the
Ritz-Carlton Destination Club Business and Ritz-Carlton Whole Ownership
Residential Business that are in effect as of the Effective Date and (ii) all
territorial and other contractual restrictions that are agreed to after the
Effective Date with Licensee’s consent (the restrictions described in clauses
(i) and (ii) above are referred to as “Permitted Territorial Restrictions”).
Neither Licensor nor its Affiliates will agree to an extension of the duration,
or a broadening of the scope, of any Permitted Territorial Restriction without
Licensee’s consent; provided, however, that nothing herein shall prohibit
Licensor or its Affiliates from extending or renewing agreements containing such
Permitted Territorial Restrictions in accordance with the terms of such
agreements, even if such extension or renewal has the effect of extending the
duration of any such Permitted Territorial Restriction.

C. Licensee shall not enter into any contract or agreement that purports to
limit or restrict Licensor’s or its Affiliates’ right to develop, operate, sell,
market, license, or franchise Licensor Lodging Facilities or Residential Units,
except as otherwise provided hereunder, or any other activity or business of
Licensor or its Affiliates, other than as set forth in any hotel management
agreement entered into between Licensee and Licensor, or their respective
Affiliates.

5.8 Delegation of Certain Functions; Sublicensing of Marketing Functions.

A. Licensee may delegate property-level, non-management functions of the MVW
Ritz-Carlton Business related to recreational activities at Non-RCHC Managed
Projects to vendors without Licensor’s consent, provided, that (i) such
delegated or subcontracted functions are conducted in accordance with the Brand
Standards and this Agreement; (ii) such delegated or subcontracted functions are
covered by insurance policies that satisfy the applicable requirements of
Sections 16.2 and 16.4; and (iii) any party to which such function has been
delegated or subcontracted and that will have access to any Licensor
Confidential Information agrees to keep such Licensor Confidential Information
confidential in accordance with this Agreement.

B. Licensee may delegate non-management functions of the MVW Ritz-Carlton
Business involving regional and/or local sales and marketing (including
brokerage arrangements) of Ritz-Carlton Destination Club Products and
Ritz-Carlton Residential Units for Ritz-Carlton Residential Projects to any
Affiliate or unrelated third party, provided, that (i) Licensee must ensure such
functions

 

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are conducted in accordance with the Brand Standards and this Agreement;
(ii) such functions are covered by insurance policies that satisfy the
applicable requirements of Sections 16.2 and 16.4; (iii) any party to which such
function has been delegated or subcontracted and that will have access to any
Licensor Confidential Information agrees to keep such Licensor Confidential
Information confidential in accordance with this Agreement; (iv) any Affiliate
to which such function has been delegated or subcontracted will agree to be
bound by the same responsibilities, limitations, and duties of Licensee
hereunder that have been delegated to such party, and any third party to which
such function has been delegated will agree to be bound by certain terms and
conditions as set forth in the applicable sublicense and undertaking; and
(v) where the sublicense of the right to use the Licensed Marks and System is
required in Licensor’s judgment, (i) if the sublicensee is an Affiliate of
Licensee, Licensee shall sublicense to such Affiliate the right to use the
Licensed Marks and the System, as necessary to fulfill such function(s) under a
sublicense agreement in a form substantially similar to the form attached hereto
as Exhibit E and (ii) if the sublicensee is an unrelated third party, Licensee
shall sublicense to such third party the right to use the Licensed Marks, as
necessary to fulfill such function(s) under an undertaking and sublicense that
contains provisions in a form substantially similar to the provisions set forth
in Exhibit F. Such delegation shall not result in a novation of any of
Licensee’s obligations under this Agreement. Licensee shall provide Licensor
with a fully-executed copy of each sublicense agreement and undertaking entered
into hereunder promptly following their execution and will notify Licensor in
writing upon the termination or expiration of any sublicense agreement or
undertaking. Licensee shall not, without Licensor’s prior consent in Licensor’s
sole discretion, delegate such functions to an unrelated third party who is
known in the community as being of bad moral character; has been convicted in
any court of a felony or other offense that could result in imprisonment for one
(1) year or more or a fine or penalty of one million dollars ($1,000,000) (as
adjusted annually after the Effective Date by the GDP Deflator) or more (or is
in control of or controlled by Persons who have been convicted in any court of
felonies or such offenses); is a Specially Designated National or Blocked
Person; or is a Lodging Competitor.

Licensee acknowledges that RHL may have certain consent rights with respect to
Licensee’s sublicensing as described above within the RHL Territory.

C. Notwithstanding Section 5.8.B. and subject to Section 8.3.,

(i) Except as provided in Section 5.8.A., no property-level, non-management
functions of the MVW Ritz-Carlton Business at Projects, such as housekeeping and
security, that do not involve the sales or marketing of Ritz-Carlton Destination
Club Products or Ritz-Carlton Residential Units may be delegated without
Licensor’s prior consent, which consent Licensor may grant or withhold in its
sole discretion.

(ii) Licensee may not delegate any of the key functions of the MVW Ritz-Carlton
Business, including Member services, brand-level marketing, and substantially
all of the consumer financing servicing function of the notes for which Licensor
or any of its Affiliates is a guarantor, without Licensor’s consent in
Licensor’s reasonable business judgment.

Notwithstanding Sections 5.8.A. and B., subject to Section 8.3.B(iv), Licensee
may not delegate to any person who is not a Related Party any of the key
functions of the MVW Ritz-Carlton Business, including Member services, senior
management of any Project, brand-level marketing, and substantially all of the
consumer financing servicing function of the notes for which Licensor or any of
its Affiliates is a guarantor, without Licensor’s consent in Licensor’s
reasonable business judgment. For avoidance of doubt, Licensee shall be
permitted to delegate any of the functions of the MVW Ritz-Carlton Business to a
Related Party without Licensor’s consent, subject in each case to execution of a
sublicense agreement in accordance with Section 5.1, 5.2, and 5.8 hereof to the
extent required

 

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thereunder. For purposes of this Section 5.8.C, “Related Party” means (i) any
wholly-owned subsidiary of Licensee or (ii) any Affiliate of Licensee in which
an unrelated third-party holds a passive, minority interest in such Affiliate
and such unrelated third-party will not be involved in the performance of any of
the key functions of the Licensed Business that are delegated to such Affiliate.

6. SOURCING; DESIGN REVIEW; CONSTRUCTION, CONVERSION AND RENOVATION

6.1 Furniture, Fixtures, Equipment, Supplies, and Signage.

Licensee will use at the Projects only such signs, supplies, fixtures and other
items that conform to the Brand Standards. If Licensor or its Affiliates have
contracts in effect as of the Effective Date with any supplier under which
developers, owners, managers, franchisees, or licensees of Licensor or its
Affiliates must purchase particular items, Licensee must purchase such item(s)
from such supplier(s). However, Licensee will not be obligated to participate in
any such purchasing or supply arrangements which are initiated following the
Effective Date.

6.2 Design Review.

The plans and specifications for each New Project shall be subject to Licensor’s
review and, upon reasonable notice, inspection to ensure that they are in
compliance with Brand Standards (subject to Project-specific variations to the
Brand Standards that may be agreed to by the parties) and with Licensee’s
obligations hereunder in accordance with the Design Review Addendum, the form of
which is attached hereto as Exhibit G, and each such Project shall be submitted
to Licensor’s design review process for review, comment, and approval. Licensee
shall pay (or cause to be paid) to Licensor or its Affiliate a fixed fee for
such review activities in accordance with the Design Review Addendum. Licensee
agrees that, as between Licensee and its Affiliates on the one hand and Licensor
and its Affiliates on the other hand, Licensee and its Affiliates (and not
Licensor and its Affiliates) are responsible for: (i) ensuring that any design,
construction documents, specifications, and any work related to the Projects
complies with all Applicable Laws, including any requirements relating to
disabled persons; (ii) any errors or omissions; or (iii) discrepancies of any
nature in any drawings or specifications. Licensee further acknowledges and
agrees that: (a) any review by Licensor or its Affiliates of plans for any
Project is limited solely to determining whether the plans comply with the Brand
Standards; and (b) Licensor and its Affiliates will have no liability or
obligation with respect to the construction, conversion, renovation, upgrading
or furnishing of the Projects other than as set forth in the Design Review
Addendum.

6.3 Site Inspection.

For each New Project that Licensor approves, Licensor will have the right to
visit (at Licensor’s cost) the job site in order to observe and inspect the work
solely to ensure compliance with the Brand Standards and this Agreement.

6.4 Construction/Conversion/Renovation.

Licensee shall construct, convert or renovate (or cause to be constructed,
converted or renovated), as the case may be, each New Project in accordance with
the Design Review Addendum, the Brand Standards, and this Agreement, and such
construction, conversion, or renovation shall not be at Licensor’s or its
Affiliates’ cost or expense.

 

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7. SYSTEM AND STANDARDS

7.1 Brand Standards.

A. Licensee shall comply with the Brand Standards in all matters with respect to
the operation of the MVW Ritz-Carlton Business, including, without limitation,
the following to the extent each relates to the MVW Ritz-Carlton Business: the
use of the Licensed Marks; the provision of Member services; employee training;
the development, construction, equipping, maintaining, and operating of all
Ritz-Carlton Destination Club Projects and Ritz-Carlton Residential Projects;
and all sales and marketing activities.

B. Without limiting the foregoing, all usage of the Licensed Marks shall be in
strict accordance with the then-current Brand Style and Communications Standards
to the extent such use is described in the Brand Style and Communications
Standards; provided, however, nothing in this sentence shall limit Licensor’s
right to modify the Licensed Marks in accordance with Section 13.2(B)(3).
Otherwise, such usage shall be in strict accordance with the Brand Standards
related to the Licensed Marks, which shall be subject to modification in
Licensor’s sole discretion. Licensor shall make available to Licensee the Brand
Standards related to the Licensed Marks as well as any modifications thereto.
Licensee shall have a reasonable period of time determined by Licensor to
implement any modifications made by Licensor to the Brand Standards related to
the Licensed Marks, such as being permitted to exhaust current supplies of
collateral, taking into consideration Licensee’s contractual commitments and the
applicable Ritz-Carlton Hotel implementation schedule with respect to such
modifications.

C. Licensor shall have the right to review (on a periodic basis) Marketing
Content and other communications using Licensed Marks and to review significant
changes in such programs implemented throughout the MVW Ritz-Carlton Business
and significant changes in templates that are widely-used in the MVW
Ritz-Carlton Business, all of which must be in compliance with the Brand
Standards at all times. The distribution, marketing and advertising channels for
all Projects shall be consistent with the positioning of the MVW Ritz-Carlton
Business and Ritz-Carlton Hotels. The parties agree to conduct reviews of such
channels no less often than annually at the annual meeting contemplated in
Section 11.2.E.

D. Licensee will (i) house on its system the Brand Standards described in the
definition of “Brand Standards” to be housed by Licensee and (ii) provide
Licensor with access to such Brand Standards at all times. Licensor will
(i) house on its system the Brand Standards described in the definition of
“Brand Standards” to be housed by Licensor and (ii) provide Licensee with access
to such Brand Standards at all times.

7.2 Modification of Brand Standards.

A. Licensor and Licensee recognize that they are each leaders in the Lodging
Business and the Destination Club and Whole Ownership Residential Businesses,
respectively, and that the Brand Standards should reflect the parties’ expertise
in their respective businesses.

B. (i) Licensor expressly reserves the right to modify the Brand Standards to
make appropriate changes consistent with changes to Licensor’s brand standards
for Ritz-Carlton Hotels, but only to the extent applicable to the MVW
Ritz-Carlton Business and with appropriate modifications to reflect appropriate
differences between hotel service levels and service levels applicable to the
Ritz-Carlton Destination Club Business and the Ritz-Carlton Whole Ownership
Residential Business. Licensor shall provide notice to Licensee of any such
modifications proposed by Licensor.

 

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(ii) Prior to any such modifications to the Brand Standards taking effect, such
modifications shall be subject to Licensee’s prior written consent, which shall
not be unreasonably withheld; provided, however, that Licensee shall have no
right to consent to modifications: (1) in fire and life safety components of the
Brand Standards (although Licensee may request that Licensor’s life safety
committee consider such exceptions as Licensee may propose); (2) to Brand
Standards related to food safety, and global safety and security; (3) in the
Electronic Systems Standards, subject, however, to Section 10.1.B (provided that
such modifications do not conflict with Data Protection Laws that apply to the
MVW Ritz-Carlton Business, and if such conflicts would result from the
modification, the parties will seek to resolve such conflict, and Licensee will
comply with a standard that does not conflict with Licensee’s obligations under
Data Protections Laws that most closely addresses the requirements of the
modified Brand Standard); (4) to the cross-selling standards and protocols
applicable to all Licensor Lodging Facilities as such standards and protocols
apply to inventory in the Reservation System; (5) the Brand Standards related to
any of the Licensed Marks described in (vii) of the definition of Licensed Marks
and/or the appearance, including the color, font, stylization, script, or
format, of the Lion and Crown Logo or the words “Ritz-Carlton” used as part of
the Licensed Marks, subject in each case to the requirements of
Section 13.2.B(3); or (6) that are required by Applicable Law. Licensor agrees
that if Licensor changes the cross-sell standards or protocol, Licensor will do
so only if there is a bona fide commercial basis for such change that is
consistent with Licensor’s reasonable business judgment as set forth in
Section 21.1 and is not motivated by a desire to reallocate or shift business
away from Licensee, even though such effect might result from such change. For
the avoidance of doubt, if Licensor or its Affiliates acquires or develops a
Licensor Lodging Facility brand or changes the segment or brand positioning of
an existing Licensor Lodging Facility brand, Licensor may place such new, or
existing but repositioned, Licensor Lodging Facility brand in a higher priority
in the cross-sell protocol than it is as of the Effective Date relative to the
positioning of the Projects.

(iii) With respect to modifications for which Licensee’s prior written consent
is not required pursuant to Section 7.2.B(ii), such modifications shall take
effect within a reasonable period of time after Licensee’s receipt of Licensor’s
notice pursuant to section 7.2.B.(i), taking into account applicable factors and
circumstances, such as the importance of the modifications to safety and
security, whether such modifications are required or restricted by Applicable
Law, the need to obtain approval and/or funding from Property Owners’
Associations, the sequencing of such modifications into the renovation and
refurbishment schedules of existing Projects, and the applicable Ritz-Carlton
Hotel implementation schedule with respect to such modifications.

(iv) With respect to modifications that are subject to Licensee’s prior written
consent pursuant to Section 7.2.B(ii), Licensee shall notify Licensor within
thirty (30) days of receipt of Licensor’s notice pursuant to Section 7.2.B(i) of
Licensee’s consent or objection to any such modifications. With respect to
modifications for which Licensee has provided its written consent, such
modifications shall take effect within a reasonable period of time agreed to by
the parties after Licensee has provided its written consent, taking into account
applicable factors and circumstances, such as whether such modifications are
required or restricted by Applicable Law, the need to obtain approval and/or
funding from Property Owners’ Associations, the sequencing of such modifications
into the renovation and refurbishment schedules of existing Projects, and the
applicable Ritz-Carlton Hotel implementation schedule with respect to such
modifications. If the parties cannot agree to a timeline for implementation of
the modification within thirty (30) days following receipt of Licensor’s notice
pursuant to Section 7.2.B(i), then Licensee may object to the proposed
modification on that basis. If Licensee does not consent or object to such
proposed modifications to the Brand Standards within thirty (30) days following
receipt of Licensor’s notice pursuant to Section 7.2.B(i), such proposed
modifications shall be deemed consented to by Licensee and will take effect as
set forth in the immediately preceding sentence.

 

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C. Licensee may from time to time propose modifications to the Brand Standards
with respect to any aspect of the MVW Ritz-Carlton Business. Licensee shall
provide notice to Licensor of any such modifications proposed by Licensee. Prior
to any such modifications to the Brand Standards taking effect, such
modifications shall be subject to Licensor’s prior written consent, which (i) in
the case of modifications to the Brand Standards described in
Section 7.2.B(ii)(1) through (6), may be granted or withheld in Licensor’s sole
discretion and (ii) in the case of modifications to all other Brand Standards,
including those that are part of the Operational Brand Standards, the Design
Guide, the Brand Style and Communication Standards (except if the proposed
change conflicts with the Brand Standards related to the Licensed Marks that
Licensor may modify without Licensee’s consent in accordance with
Section 7.2.B(ii)(5)), and the Quality Assurance Program (including the Customer
Satisfaction System and the Quality Assurance Audit System), shall not be
unreasonably withheld. Licensor shall notify Licensee within thirty (30) days of
receipt of Licensee’s notice pursuant to this Section 7.2.C of Licensor’s
consent or objection to any such modifications. With respect to modifications
for which Licensor has provided its written consent, such modifications shall
take effect within a reasonable period of time agreed to by the parties after
Licensor has provided its written consent, taking into account applicable
factors and circumstances, such as whether such modifications are required or
restricted by Applicable Law, the need to obtain approval and/or funding from
Property Owners’ Associations and the sequencing of such modifications into the
renovation and refurbishment schedules of existing Projects. If the parties
cannot agree to a timeline for implementation of the modification within thirty
(30) days following receipt of Licensee’s notice pursuant to this Section 7.2.C,
then Licensor may object to the proposed modification on that basis. If Licensor
does not consent or object to such proposed modifications to the Brand Standards
within thirty (30) days following receipt of Licensee’s notice pursuant to this
Section 7.2.C, such proposed modifications shall be deemed consented to by
Licensor and will take effect as set forth in the immediately preceding
sentence.

D. Except as provided in Section 7.2.E, in the event of a dispute regarding
proposed modifications to any aspect of the Brand Standards with respect to
which either party has consent rights under Section 7.2.B or 7.2.C (other than
consents that may be granted or withheld in Licensor’s sole discretion), either
party may refer the matter to an Expert for resolution pursuant to Section 22.5.

(i) For modifications regarding physical aspects of the Brand Standards proposed
by Licensor, the Expert will determine whether Licensor’s proposed modifications
are consistent with changes to the Luxury Brand Segment and otherwise applicable
to, and appropriate for, the MVW Ritz-Carlton Business.

(ii) For modifications proposed by Licensee, the Expert will determine whether
Licensor’s objection to Licensee’s proposed modifications is reasonable, taking
into account Licensor’s brand standards for Ritz-Carlton Hotels , the
applicability of such standards to Ritz-Carlton Destination Club Projects and
Ritz-Carlton Residential Projects, the appropriate differences between hotel
service levels and service levels applicable to the Ritz-Carlton Destination
Club Business and the Ritz-Carlton Whole Ownership Residential Business, and
whether the failure to implement such modifications will or may adversely affect
Ritz-Carlton Hotels.

If the Expert determines that any such proposed modifications are appropriate,
such modifications shall take effect within a reasonable period of time after
the Expert’s determination, taking into account applicable factors and
circumstances, such as whether such modifications are required or restricted by
Applicable Law, the need to obtain approval and/or funding from Property Owners’
Associations, the sequencing of such modifications into the renovation and
refurbishment schedules of existing Projects, and the applicable Ritz-Carlton
Hotel implementation schedule with respect to such modifications. If the Expert
determines that such proposed modifications are not appropriate, then the Brand
Standards will not be modified to reflect such modifications with respect to the
MVW Ritz-Carlton Business.

 

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E. In the event that Licensee does not consent to modifications to any service
aspect of the Brand Standards proposed by Licensor with respect to which
Licensee has consent rights under Section 7.2.B, and customer satisfaction
levels at the Projects decrease greater than five (5) percentage points during
the twelve (12) month period immediately following the date on which such change
was to have been implemented, the parties shall investigate the reason(s) for
the decrease. If the failure to implement one or more proposed modifications to
any service aspect of the Brand Standards is determined to be a material reason
for any such decrease, then Licensee shall promptly implement such
modifications, taking into account applicable factors and circumstances, such as
whether such modifications are required or restricted by Applicable Law, the
need to obtain approval and/or funding from Property Owners’ Associations, the
sequencing of such modifications into the renovation and refurbishment schedules
of existing Projects, and the applicable Ritz-Carlton Hotel implementation
schedule with respect to such modifications.

F. For the avoidance of doubt, nothing herein shall limit in any manner
Licensor’s or its Affiliates’ ability to modify or change any standards
applicable to Licensor’s Lodging Business or Whole Ownership Residential
Business, or any other business or activity in which Licensor or its Affiliates
may engage from time to time, other than the Ritz-Carlton Destination Club
Business or the Ritz-Carlton Whole Ownership Residential Business.

8. OPERATIONS

8.1 Operating the Projects and the MVW Ritz-Carlton Business.

Licensee will operate the Projects and the MVW Ritz-Carlton Business in
compliance with this Agreement, the System, and the Brand Standards, subject to
Applicable Law and the rights and duties of the applicable Property Owners’
Associations, and Licensee will:

(1) permit the duly authorized representatives of Licensor to: (i) enter
facilities utilized by Licensee in the MVW Ritz-Carlton Business (including the
Projects and Sales Facilities) and inspect such facilities at all reasonable
times to confirm that Licensee is complying with the terms of this Agreement,
the System, and the Brand Standards; and (ii) test any and all equipment, food
products, and supplies located at the Projects. Licensor has no duty or
obligation to conduct ongoing inspections of the Projects or other facilities
utilized by Licensee in the MVW Ritz-Carlton Business;

(2) not knowingly permit gambling to take place at any Project (except for a
limited number of reputable charitable events permitted by Applicable Law) or
use any Project for any casino, lottery, or other type of gaming activities, or
otherwise directly or indirectly associate with any gaming activity, unless such
activities are approved in writing by Licensor’s Casino Oversight Committee;

(3) provide all food and beverage service in the Projects in conformity with the
Brand Standards and Applicable Law; and

(4) with respect to transient rentals for overnight accommodation at Projects
offered or made through the Reservation System, participate in travel agent
programs, Brand Loyalty Programs, and any complaint resolution programs as
Licensor may establish in its discretion, all to the extent applicable to the
MVW Ritz-Carlton Business.

 

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  8.2 Employees.

Licensee will employ suitably qualified individuals sufficient to staff all
positions at the Projects and with respect to the MVW Ritz-Carlton Business.
Licensee will use its best efforts to ensure that Licensee’s employees at all
times comply with the Brand Standards.

 

  8.3 Management and Operation of the Projects.

A. (i) The parties acknowledge and agree that, except as set forth in
Section 8.3.B, it is the express intention of the parties that all Projects (the
“RCHC Managed Projects”), at all times, be managed by Licensor or one of its
Affiliates pursuant to a separate on-site management agreement in the form
agreed to by the parties as of the Effective Date, as it may be modified by
agreement of the parties thereafter and to reflect the specific circumstances of
a particular Project (in each case, the “RCHC Management Agreement”) for each
Project between Licensor or its Affiliate and the appropriate entity or entities
for the Projects, which may be Licensee, one of its Affiliates, and/or the
Property Owners’ Association for such Project. Certain provisions of this
Agreement do not apply to RCHC Managed Projects, and certain provisions may
apply to RCHC Managed Projects in a different manner than those provisions apply
to Non-RCHC Managed Projects, as set forth herein, including Section 27.

(ii) In no event shall Licensor or its Affiliate be required to perform any
additional services or provide any additional assistance not specifically
provided for herein that might require Licensor or its Affiliate to register as
a broker-dealer under Applicable Law.

B. Notwithstanding Section 8.3.A(i),

(i) The Existing Project named “Ritz-Carlton Residences at Kauai Lagoons” will
continue to be operated by Licensee or one of its Affiliates unless Licensor has
consented in writing to a third-party management company that is not an
Affiliate of Licensee (“Management Company”) to operate such Project, which
consent may be granted or withheld in Licensor’s sole discretion and withdrawn
at any time if Licensor determines that such Management Company is no longer
qualified to manage such Project. If at any time such Project has more than
fifteen (15) Ritz-Carlton Destination Club Units and/or Ritz-Carlton Residential
Units, Licensor may require that such Project be managed by Licensor or its
Affiliate under an RCHC Management Agreement; and

(ii) If Licensee proposes a New Project with no more than fifteen
(15) Destination Club Units and/or Residential Units, a Management Company
consented to by Licensor (which may by Licensee or one of its Affiliates), which
consent may be granted or withheld in Licensor’s sole discretion and withdrawn
at any time if Licensor determines that such Management Company is no longer
qualified to manage such Project, may manage such Project.

The Ritz-Carlton Residences at Kauai Lagoons and any New Project that is managed
by Licensee, one of its Affiliates, or a Management Company pursuant to
(ii) shall be referred to herein as a “Non-RCHC Managed Project”. Any Management
Company engaged to manage the Non-RCHC Managed Projects under (i) or (ii) must
execute and deliver to Licensor for each such Project a Management Company
Acknowledgment in the form required by Licensor, the current form of which is
attached hereto as Exhibit C.

Licensee acknowledges that, in addition to the consent rights of Licensor with
respect to Management Companies as set forth above, RHL may have certain consent
rights with respect to Licensee’s engagement of Managements Companies for
Non-RCHC Managed Projects located within the RHL Territory.

 

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C. Subject to Sections 8.3.A. and B. and any limitations in the RHL Agreement,
Licensor acknowledges that (i) certain functions of Projects may be delegated or
subcontracted to third parties in accordance with Section 5.8; (ii) certain
aspects of certain Projects may be subject to shared service and integrated
facility arrangements with co-located lodging properties and other facilities
and (iii) Licensee may delegate to Licensee’s Affiliates the authority to
operate certain Projects in accordance with Sections 5.1.B. and 5.2.D.

 

  8.4 Customer Satisfaction System and Quality Assurance Audit System.

A. Licensee has provided to Licensor, and Licensor has reviewed and consented
to, the form of Customer Satisfaction System. Licensee shall administer the
Customer Satisfaction System, using Licensee’s Customer Satisfaction System as
of the Effective Date, as it may be subsequently modified in accordance with
Sections 7.2.B, C, D or F. The results of the Customer Satisfaction System
surveys shall be provided to Licensor on a periodic basis, but not less than
once every three (3) months. Licensee shall pay all costs for such Customer
Satisfaction System.

B. Licensee has provided to Licensor, and Licensor has reviewed and consented
to, the form of Quality Assurance Audit System. Licensee shall administer the
Quality Assurance Audit System, using Licensee’s Quality Assurance System as of
the Effective Date, as it may be subsequently modified in accordance with
Sections 7.2.B, C, D or F. Licensee shall conduct audits of each Project under
the Quality Assurance Audit System no less than annually, unless Licensor
consents to a longer period in writing. Licensee shall pay all costs for such
Quality Assurance Audit System.

C. Licensor has the right to periodically audit Licensee’s Customer Satisfaction
System and Quality Assurance Audit System process and results in order to
confirm the reliability of the process and results, that Licensee’s Customer
Satisfaction System is sufficient to accurately measure customer satisfaction,
and that Licensee’s Quality Assurance Audit System is sufficient to accurately
measure compliance with the Brand Standards at the Projects. Audits of the
Customer Satisfaction System or the Quality Assurance Audit System shall be at
Licensor’s expense, unless such audit reveals a material deficiency in the
Customer Satisfaction System or the Quality Assurance Audit System that
adversely affects the reliability of the process or results or the accuracy of
measuring customer satisfaction or compliance with Brand Standards at the
Projects, as applicable (in either case, a “Deficiency”), in which case the
audit expense shall be borne by Licensee.

D. If Licensor determines that there is a Deficiency in the Customer
Satisfaction System or the Quality Assurance Audit System, Licensor will notify
Licensee of the Deficiency, provide Licensee with reasonable detail regarding
the Deficiency, and the parties will work together to identify potential
resolutions for, and agree on the measures that Licensee will take to resolve,
such Deficiency. If the parties fail to agree on a process to resolve the
Deficiency within sixty (60) days following such notice, or, if the Deficiency
is not resolved within one hundred eighty (180) days following such notice,
Licensor has the right to require that Licensee implement a customer/guest
satisfaction program or quality assurance system designed or approved by
Licensor, in which event, Licensee will (i) provide Licensor with all Customer
Satisfaction System or the Quality Assurance Audit System material that is not
included in the documentation to which Licensor has been provided access,
including, without limitation, underlying Brand Standards that are referred to
but are not included in Quality Assurance Audit System questionnaires and forms
and (ii) be required to pay the fees and charges applicable to such program. If
Licensee fails to implement such customer/guest satisfaction program or quality
assurance system designed or approved by Licensor, such failure shall be deemed
a default and Licensor may terminate this Agreement immediately upon notice to
Licensee under Sections 18.2.A.(v) and 18.2.A(vi), as applicable.

 

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E. The parties will discuss changes that Licensor has made to the customer/guest
satisfaction program or quality assurance system that Licensor uses for Licensor
Lodging Facilities no less often than annually at the annual meeting
contemplated in Section 11.2.E.

F. Licensor acknowledges that Licensee may include questions as part of the
Customer Satisfaction System survey process that are not intended to measure
customer satisfaction but instead intended to capture customer preference, gauge
customer interest, and other market research functions and that such questions
shall not be considered for purposes of measuring customer satisfaction
hereunder.

G. Licensee acknowledges that Licensor has the right to inspect and monitor all
sales and marketing or promotional activity related to the offer and sale of
interests in Destination Club Units and Residential Units as part of the MVW
Ritz-Carlton Business at Licensor’s cost, in any manner Licensor deems necessary
or appropriate in Licensor’s reasonable business judgment and as permitted by
Applicable Law, including “blind” shopping.

 

  8.5 Projects Controlled by Non-Controlled Property Owners’ Association.

If any Project that is controlled by a Non-Controlled Property Owners’
Association fails to develop, operate, maintain, or renovate the Project in
compliance with this Agreement, the System, or the Brand Standards (whether by
failure to provide adequate funds to comply therewith or otherwise), Licensee
shall promptly request that the Non-Controlled Property Owners’ Association cure
the failure (i) for Existing Projects, within the applicable cure periods set
forth in the agreements governing such Existing Project (or any longer period
required by Applicable Law) or (ii) for New Projects, within the shorter of
(x) the applicable cure periods set forth in Section 18 or (y) the applicable
cure periods set forth in the agreements governing such New Project (or any
longer period required by Applicable Law), after notice of the failure,
provided, that if the failure is not susceptible of being cured within the
applicable period, Licensee shall have the right to extend such period for such
additional period as is reasonable under the circumstances if cure is being
diligently pursued, and, in no event, will such additional period be more than
three hundred sixty five (365) days. If the Non-Controlled Property Owners’
Association does not cure such failure within the applicable cure period,
Licensee shall promptly issue default notices to the Non-Controlled Property
Owners’ Association and promptly take such actions as are required to Deflag the
Project in accordance with the agreements governing such Project or as otherwise
required by Applicable Law. If the Non-Controlled Property Owners’ Association
cures such failure prior to Deflagging in accordance with any cure rights
provided in the agreements governing such Project or Applicable Law, Licensee
will have the right to cease Deflagging the Project and maintain the Project as
part of the MVW Ritz-Carlton Business.

 

  9. RESTRICTIONS AND LIMITATIONS ON CONDUCT OF MVW RITZ-CARLTON BUSINESS

 

  9.1 Offers and Sales of Destination Club Units and Residential Units; Use of
MVW Ritz-Carlton Business Customer Information.

A. Licensee must comply with the System, Brand Standards, and Applicable Law in
connection with the offer and sale of interests in Destination Club Units and
Residential Units as part of the MVW Ritz-Carlton Business. Without limiting the
foregoing, Licensee shall be required to (i) comply with appropriate and
commercially reasonable procedures and processes established by, or

 

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acceptable to, Licensor to prevent Licensee from doing business with prospective
customers, Members, purchasers or other persons in contravention of Applicable
Law; (ii) comply in all material respects with applicable existing and future
condominium, association and trust agreements, CC&Rs, zoning and land use
restrictions, and property management agreements; (iii) comply with Permitted
Territorial Restrictions relating to or associated with hotels, resorts, lodging
facilities and Residential Projects operated under brands owned or controlled by
Licensor or its Affiliates that are in place as of the Effective Date; and
(iv) comply in all material respects with Licensor’s applicable customer and
data privacy and security standards and protocols that Licensor uses in the
conduct of its business as such standards and protocols apply to the MVW
Ritz-Carlton Business.

B. The applicable condominium and/or timeshare documentation, including the
condominium declaration, public offering statement, form of purchase and sale
agreement, condominium association formation documents, rules and regulations,
and all related documents and instruments (collectively, the “Offering
Documents”), shall be subject to Licensor’s review upon reasonable notice (on a
periodic audit basis) for the purpose of ensuring that the Offering Documents
properly reflect the relationship between Licensor and Licensee and Licensee’s
rights to use the Licensed Marks hereunder. If the Offering Documents do not
properly reflect the relationship between Licensor and Licensee and Licensee’s
rights to use the Licensed Marks hereunder, Licensor will provide notice to
Licensee thereof, which notice shall identify the deficiencies in the Offering
Documents. Licensee shall promptly make changes to the Offering Documents to
address such deficiencies and provide the revised Offering Documents to Licensor
for Licensor’s review and approval of the changes. Licensee shall not use the
revised Offering Documents (or permit the revised Offering Documents to be used)
until such changes have been approved by Licensor (for purposes of
clarification, the foregoing shall not prohibit Licensee from using the existing
Offering Documents until the revised Offering Documents are approved by Licensor
and applicable governmental authorities).

C. Licensee shall, as part of the sales process, provide disclosure to each
prospective purchaser in the form attached as Exhibit L, subject to
modifications required by governmental authorities for the subject jurisdiction
or that are necessary to properly describe the subject Project, and have each
purchaser acknowledge receipt of such disclosure in writing, which, among other
things, discloses to prospective purchasers that (i) the MVW Ritz-Carlton
Business is owned and managed by Licensee; (ii) neither Licensor nor any of its
Affiliates is the seller of the interests in the Ritz-Carlton Destination Club
Units or Ritz-Carlton Residential Units, as applicable; and (iii) that the
Ritz-Carlton name is used by Licensee pursuant to a license, and that if such
license is revoked, terminated, or expires, Licensee shall no longer have the
right to use the Licensed Marks in connection with the MVW Ritz-Carlton Business
or the relevant Project. Licensee shall be permitted to incorporate such
disclosure with other disclosures Licensee makes to prospective purchasers.
Licensee will communicate the license arrangement to existing Members of the
Existing Projects either within the disclosure circular or in a supplementary
disclosure in a form acceptable to Licensor.

D. All MVW Ritz-Carlton Business Customer Information, whether acquired,
obtained or developed prior to or after the Effective Date, shall be used solely
for engaging in the MVW Ritz-Carlton Business or the Marriott Licensed Business,
and for no other use or purpose whatsoever. Other than as permitted under this
Agreement, Licensee will not have, claim, or assert any right against or to such
MVW Ritz-Carlton Business Customer Information. Within sixty (60) days after the
end of each calendar year during the Term, Licensee shall provide Licensor with
a written certification (in the form required by Licensor) signed by Licensee’s
chief executive officer and chief information officer, that Licensee and its
Affiliates have maintained, in all material respects, effective internal control
over the maintenance and security of MVW Ritz-Carlton Business Customer
Information in accordance with the terms of this Agreement related to the
treatment and use of MVW Ritz-Carlton Business Customer Information during the
immediately preceding calendar year. After the expiration of the Term or

 

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termination of this Agreement, all MVW Ritz-Carlton Business Customer
Information shall be used only as set forth in Section 19.2(7). Licensor
acknowledges that Property Owners’ Associations, boards, and Members have
certain rights to MVW Ritz-Carlton Business Customer Information for their
respective Projects and that MVW Ritz-Carlton Business Customer Information is
in the public record in some jurisdictions and may be compiled or derived by
third parties. Without limitation of the forgoing, Licensee shall not sell any
MVW Ritz-Carlton Business Customer Information to third parties, and Licensee
shall not disclose or otherwise provide any MVW Ritz-Carlton Business Customer
Information to any third-parties other than in connection with the operation of
the MVW Ritz-Carlton Business and in accordance with this Agreement. Licensor
acknowledges that MVW Ritz-Carlton Business Customer Information may be used by
Licensee in connection with the Marriott Licensed Business pursuant to the terms
and conditions of the Marriott License Agreement.

E. If Licensee acquires a third-party customer list (“Third-Party List”)
following the Effective Date, Licensee may use such list in connection with,
and/or transfer such list to, the MVW Ritz-Carlton Business and/or Licensee’s
other business(es). Such list can be used independently in connection with the
MVW Ritz-Carlton Business and/or any of Licensee’s other business(es), but if
the information in the Third-Party List evolves based on, or otherwise becomes
supplemented with, MVW Ritz-Carlton Business Customer Information as a result of
its transfer to, or use by, the MVW Ritz-Carlton Business (the “Modified
Third-Party List”), then the Modified Third-Party List may not thereafter be
used for, or transferred to, (i) any of Licensee’s or its Affiliates’ other
businesses or (ii) any other third party for use other than solely for engaging
in the MVW Ritz-Carlton Business. Licensee and its Affiliates shall not be
permitted or required to cross-check any Customer Information or customer list
of any of Licensee’s or its Affiliates’ other businesses with the MVW
Ritz-Carlton Business Customer Information. Any Customer Information obtained by
Licensee on or after the date of the Spin-Off Transaction in connection with
Licensee’s other businesses unrelated to the MVW Ritz-Carlton Business that is
not used in, or in connection with, the MVW Ritz-Carlton Business may be used by
Licensee and its Affiliates for any purpose, including (i) and (ii) above.

F. Licensee will be permitted to sell interests in Ritz-Carlton Destination Club
Units or Ritz-Carlton Residential Units to vacation/destination/timeshare clubs
or other travel programs that are consistent with the luxury positioning of the
Projects (“Competing Entities”) without Licensor’s prior written consent,
provided, that Licensee shall take all commercially reasonable actions required
by Licensor to ensure that such Competing Entities will be prohibited to the
maximum extent legally permissible from using any of the Licensor Intellectual
Property in connection with the marketing, sales, rental, or other use of such
units. Licensor hereby consents to arrangements that Licensee has in place as of
the Effective Date with respect to the foregoing and Licensee may continue such
arrangements after the Effective Date with respect to the Projects covered
thereby; provided, however, that Licensee shall not enter into any new or
additional such arrangements that do not meet the requirements of this
Section 9.1.F, and Licensor does not waive any claims Licensor may have against
such Competing Entities with respect to the improper use of Licensor
Intellectual Property.

G. Licensee will be permitted to use the Licensed Marks on logoed collateral
merchandise, such as golf shirts, other apparel and promotional items
(collectively, “Logoed Merchandise”) that is provided solely to promote the
Projects and solely through gift or retail shops located at Projects or Sales
Facilities or through Licensee’s Website, all in a manner that is consistent
with Licensee’s or its Affiliates’ use of the Licensed Marks in such respect as
of the Effective Date and with an overall level of quality of Logoed Merchandise
that is consistent with the Luxury Brand Segment. Licensee acknowledges and
agrees that (i) Licensor has not applied for and does not maintain registrations
for the Licensed Marks covering some or all of the Logoed Merchandise in any
jurisdiction and has no obligation to apply for or maintain such registrations
in the future; (ii) Licensor makes no representations or warranties regarding
Licensee’s ability to use the Licensed Marks on Logoed

 

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Merchandise in any jurisdiction or that Licensee’s use of the Licensed Marks on
Logoed Merchandise in any jurisdiction will not infringe, dilute or otherwise
violate the trademark or other rights of any third party; (iii) Licensee’s use
of the Licensed Marks on Logoed Merchandise shall be at Licensee’s sole risk and
without recourse against Licensor or its Affiliates; (iv) Licensee shall not
knowingly engage in any act or omission which may diminish, impair or damage the
goodwill, name or reputation of Licensor or its Affiliates or the Licensed
Marks, including without limitation by utilizing any facility which manufactures
or assembles Logoed Merchandise in violation of the laws of the country in which
such facility is located (“Illegal Facilities”); (v) Licensee will comply, at
its sole expense, with all Applicable Laws in connection with the manufacture,
sale, marketing, and promotion of the Logoed Merchandise in the countries where
such activities take place, including without limitation any prohibitions
against Illegal Facilities; (vi) at Licensor’s request, Licensee will promptly
provide to Licensor representative samples of then-current Logoed Merchandise
and any associated packaging and displays; (vii) at Licensor’s request, Licensee
will promptly make any changes to its Logoed Merchandise or its uses of the
Licensed Marks on Logoed Merchandise that do not comply with this
Section 9.1.G.; (viii) Licensee will use the Licensed Marks on Logoed
Merchandise in accordance with the then-current Brand Standards; (ix) Licensee
must comply with the applicable terms of the RHL Agreement, including providing
information for purposes of Licensor’s compliance obligations with the RHL
Agreement; and (x) Licensee shall promptly cease use, distribution, promotion,
marketing and sale of Logoed Merchandise bearing the Licensed Marks in any
jurisdiction where Licensor requests such use to cease as a result of a claim or
challenge raised by a third party or if Licensor in its sole discretion believes
such use diminishes, impairs or damages the goodwill, name or reputation of
Licensor or its Affiliates or the Licensed Marks. Licensee shall reimburse
Licensor or its Affiliates for any fees or other amounts due to RHL or its
Affiliates under the RHL Agreement as a result of the offer and sale by Licensee
and its Affiliates of Logoed Merchandise hereunder.

 

  9.2 Transient Rentals of Ritz-Carlton Destination Club Units and Ritz-Carlton
Residential Units.

A. Subject to Section 10.2, Licensee shall have the right to engage in the
transient rental of inventory of Ritz-Carlton Destination Club Units and
Ritz-Carlton Residential Units, respectively, (i) that is held for development
and sale and owned by Licensee, its Affiliates, a Property Owners’ Association
or a third party with which Licensee or its Affiliates has entered into a
development agreement; (ii) that is controlled by Licensee or its Affiliates as
a result of Member participation in programmatic elements of Ritz-Carlton
Destination Club Products (e.g., exchange, banking, borrowing, Brand Loyalty
Program trade, and similar programs); and (iii) that is controlled by Licensee,
its Affiliates or a Property Owners’ Association as a result of Member default
(e.g., maintenance fee defaults or financing defaults) pending foreclosure or
cure in the ordinary course of business, in each case so long as such transient
rental would not violate any then-existing Permitted Territorial Restriction.

B. With respect to Existing Projects at which Licensee has not engaged in
transient rental and for which Licensee has not notified Licensor prior to the
Effective Date of Licensee’s intention to engage in transient rentals (each of
which is identified in Exhibit H), prior to engaging in any transient rental
activity, Licensee shall give notice of Licensee’s intent to engage in transient
rental activity to Licensor. If Licensor determines that any transient rental
activity would violate any then-existing Permitted Territorial Restriction, then
Licensor shall so notify Licensee, and Licensee shall not be permitted to engage
in such transient rental activity to the extent such transient rental activity
would violate such Permitted Territorial Restriction and for so long as such
Permitted Territorial Restriction remains in effect.

C. With respect to New Projects, Licensor will evaluate the territorial or other
contractual or legal restrictions applicable to Licensor or its Affiliate in
connection with the New Project Application process described in Section 5.2. If
Licensor determines that any transient rental activity at a

 

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New Project would violate any then-existing Permitted Territorial Restriction,
then Licensor shall so notify Licensee, and Licensee shall not be permitted to
engage in such transient rental activity to the extent such transient rental
activity would violate such Permitted Territorial Restriction and for so long as
such Permitted Territorial Restriction remains in effect.

 

  9.3 No Affiliation with Other Brands/Businesses.

A. Licensee shall not affiliate with or use the Licensor Intellectual Property
in conjunction, or association, with any brand, trademark, product, service, or
business other than the MVW Ritz-Carlton Business which is the subject of this
Agreement, or use the Licensor Intellectual Property in a way that could
reasonably be interpreted as endorsing, or suggesting affiliation with, any
other brand, mark, product, service or business, other than marketing alliances
and exchange affiliations that are consistent with the practice of Licensee and
its Affiliates during the period from January 1, 2005 until the Effective Date,
as reasonably demonstrated by Licensee, and other marketing alliances, exchange
affiliations and similar arrangements permitted under Section 9.5.

B. Subject to the Noncompetition Agreement, nothing in this Agreement is
intended to prevent Licensee or its Affiliates from creating, developing,
operating, licensing, or managing its own brand or system for (1) Destination
Club Projects or Destination Club Products or (2) a Lodging Business; provided,
however, that as set forth in this Agreement, Licensee shall not use Licensor
Confidential Information, the Branded Elements, or the MVW Ritz-Carlton Business
Customer Information in connection with any business other than the MVW
Ritz-Carlton Business.

C. Licensee shall not establish or operate a Sales Facility at any hotel or
resort owned, operated, or franchised by a Lodging Competitor without Licensor’s
prior written consent. In the event that a Licensor Lodging Facility in which a
Sales Facility is located is Deflagged and becomes a hotel or resort operated
under a Lodging Competitor Brand, Licensee may continue to operate such Sales
Facility in such hotel or resort until the expiration or termination of the
arrangement under which the Sales Facility is operating; provided, however, that
Licensee shall not renew, extend, or enter into any new arrangement with respect
to such Sales Facility at such hotel or resort without Licensor’s prior consent.

 

  9.4 Destination Club Businesses and Whole Ownership Residential Businesses
Operating Under Other Brands.

Subject to Sections 9.3 and 13.2.A(4), Licensee may engage in a Destination Club
Business and a Whole Ownership Residential Business under or in connection with
brands other than the Licensed Marks, provided that no Existing Projects may be
operated except under the Licensed Marks unless: (i) such Existing Project is
removed from the System by Licensee in good faith for failure of a
Non-Controlled Property Owners’ Association to comply with the management
agreement (whether by failure to provide adequate funds to maintain the Brand
Standards or otherwise), or if Licensee makes a commercially reasonable
determination (and Licensor agrees with such determination) that such project no
longer adequately represents the then-current Ritz-Carlton Destination Club
Project or Ritz-Carlton Residential Project, as applicable, brand positioning;
(ii) a Non-Controlled Property Owners’ Association terminates its management
agreement with Licensee or its Affiliate or refuses to renew the management
agreement on the then-current terms and conditions; or (iii) Licensor terminates
Licensee’s right to operate such Existing Project in accordance with this
Agreement. A Project is removed from the System for purposes of this Section 9.4
when no customer-facing sales assets or facilities that contain or display any
of the Licensor Intellectual Property are used by Licensee at or for such
Project (including phone numbers, websites, domain names, screen names, social
networking names, email addresses, and customer information) and no Branded
Elements or Licensor Intellectual Property (including any

 

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corporate name containing the word “Ritz-Carlton”) are used to promote, market
or sell any other product or service at or for the Project. Licensee’s failure
to comply with subsections 9.4(i) through (iii) shall be a default under this
Agreement and will result in Licensee failing to have met the conditions
precedent to converting the Project to another brand.

 

  9.5 Services and Products Made Available to Members and Marketing and Exchange
Arrangements.

A. Licensee may only enter into marketing arrangements with respect to the MVW
Ritz-Carlton Business with third parties, and may only make available to Members
those products and services (including Exchange Programs), (i) that are
consistent with the brand positioning of the MVW Ritz-Carlton Business and, with
respect to such marketing arrangements, are in compliance with the Brand
Standards or (ii) that are in place as of the Effective Date or that are
consistent with Licensee’s practice during the period from January 1, 2005 until
the Effective Date, as reasonably demonstrated by Licensee. Licensor may object
if Licensor becomes aware of any such practice that Licensor believes is
inconsistent with the Brand Standards. Licensor will notify Licensee of such
objection, and the parties will engage in discussions and attempt to agree on
modifications to such practice(s) so that such practice(s) will be in compliance
with the Brand Standards. For local marketing alliances, the positioning of the
Project in the local market shall be the governing standard.

B. Licensee shall have the right to seek prior written confirmation from
Licensor on a confidential basis that any proposed program or arrangement is
consistent with applicable Brand Standards and will not result in a breach of
Licensee’s obligations under this Agreement. With respect to programs or
arrangements undertaken by Licensee with respect to the MVW Ritz-Carlton
Business and for which Licensee has not received Licensor’s prior written
confirmation (“New Licensee Program”), Licensor shall have the right to object
to any such program or arrangement in the event Licensor believes that such
program or arrangement is inconsistent with applicable Brand Standards. In the
event Licensee and Licensor are not able to come to agreement on the issue, then
either party may refer the matter for Expert resolution pursuant to
Section 22.5, or if Licensee initiates a New Licensee Program without first
seeking confirmation that the New Licensee Program is consistent with the Brand
Standards and Licensor determines that such New Licensee Program is not
consistent with the Brand Standards, then Licensor may refer the matter for
Expert resolution pursuant to Section 22.5. In either case, if the Expert finds
in favor of Licensor, then Licensor’s prior written consent shall be required
for each New Licensee Program that is implemented on a system-wide or
region-wide (e.g., throughout the United States, Europe, the Middle East, Latin
America, Asia Pacific or a substantial portion thereof) basis for the
twenty-four (24) month period following any such determination.

C. Licensee shall not allow its Members of any Project to exchange their right
to use and occupy Ritz-Carlton Destination Club Units for stays (or other
benefits) at luxury or upscale hotels other than those operated or franchised by
Licensor or its Affiliates, except through general Exchange Programs or through
tour operator arrangements that are in compliance with Licensor’s Brand
Standards related to approved distribution channels; provided that Licensee
shall be permitted to include hotels that are neither Licensor Lodging
Facilities nor a part of a Lodging Competitor’s hotel system in its Explorer,
Club Connections, or similar program in locations where a Licensor Lodging
Facility of the same brand segment and of a suitable experience type (e.g.,
resort) is not available. Licensor will not object to the Exchange Program and
tour operator arrangements that Licensee has in place as of the Effective Date
as not being in compliance with Brand Standards, and Licensee may continue such
arrangements after the Effective Date with respect to the Projects covered
thereby; provided, however, that Licensee shall not enter into any new or
additional such arrangements that do not meet the Brand Standards, and Licensor
does not waive any claims related to misuses of the Licensed Marks. Licensee
shall have the right to operate its own Exchange Programs. Licensee may use the
Licensed Marks as part of a branded

 

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Exchange Program name approved in writing by Licensor. Branded Exchange Programs
operated by Licensee or its Affiliates in which both Ritz-Carlton Destination
Club Units and other Destination Club Units participate shall be subject to
commercially reasonable safeguards to be agreed by Licensor and Licensee, such
as a prohibition on prominently featuring or marketing products under brands
other than the Licensed Marks in such a way as to imply endorsement of such
other brands by, or affiliation with, Licensor, and limits on the right of
Licensee to use the MVW Ritz-Carlton Business Customer Information to benefit
such Exchange Programs. At Licensor’s request, use of the Licensed Marks as part
of a branded Exchange Program name shall be discontinued if (i) at any time the
aggregate number of Ritz-Carlton Destination Club Units that participate in such
branded Exchange Program is less than one-half (1/2) of the total number of all
Destination Club Units that participate in such branded Exchange Program or
(ii) Licensee permits Destination Club Units operated under any Hilton Brand,
Starwood Brand, or Four Seasons Brand to participate in such Exchange Program,
provided that if clause (ii) is implicated, Licensee shall, in no event, be
required to discontinue such use until the fifth (5th) anniversary of the
Effective Date.

D. Licensee shall not list, promote, rent or sell any Ritz-Carlton Destination
Club Unit or Ritz-Carlton Residential Unit inventory for transient rental that
is controlled or owned by Licensee or its Affiliates through any distribution
channels of a Lodging Competitor.

E. Licensee shall comply with all restrictions and requirements set forth in
Licensor’s then-existing promotional, marketing or other alliance programs in
place as of the Effective Date to the extent they apply to Licensee following
the Effective Date.

 

  9.6 Changes in Programs, Services or Benefits.

Prior to making any significant systemic changes in the Ritz-Carlton Destination
Club Business or the Ritz-Carlton Whole Ownership Residential Business (for
example, conversion to a points program), Licensee shall have the right to seek
prior written confirmation from Licensor, on a confidential basis, that any such
change is consistent with the Brand Standards and will not result in a breach of
Licensee’s obligations under this Agreement. In the event of a dispute regarding
whether any such change is inconsistent with the Brand Standards or would result
in a breach (whether or not Licensee sought prior confirmation that the proposed
change is consistent with the Brand Standards), the dispute will be referred for
Expert resolution pursuant to Section 22.5.

 

  10. ELECTRONIC SYSTEMS

 

  10.1 Systems Installation.

A. Licensee will, as a cost of the MVW Ritz-Carlton Business, arrange for the
purchase or lease, installation, maintenance, and use at the Projects of all
Electronic Systems that Licensor reasonably requires or that Licensee chooses to
use in connection with the MVW Ritz-Carlton Business, in accordance with the
Brand Standards and specifications provided by or on behalf of Licensor and may
not use such Electronic Systems for anything not specifically related to the
Projects and the MVW Ritz-Carlton Business.

B. Notwithstanding the foregoing, Licensee may use any electronic system that,
in Licensor’s judgment, is comparable to a particular required Electronic System
and performs the same functions as such Electronic System and is compatible, and
interfaces, with Licensor’s Electronic Systems.

 

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  10.2 Reservation System.

A. Licensor will make the Reservation System available to Licensee in connection
with the MVW Ritz-Carlton Business, including for reservations relating to
Member usage, marketing usage, transient rental usage, and other usages of
Ritz-Carlton Destination Club Units and Ritz-Carlton Residential Units. All
Ritz-Carlton Destination Club Units and Ritz-Carlton Residential Units inventory
made available by Licensee for transient rental stays of thirty (30) days or
less must be listed in the Reservation System, but such inventory shall not be
included in Lodging Competitors’ distribution channels, provided that for the
purposes hereof, any distribution channels included within Licensor’s channel
standards or otherwise approved by Licensor shall not be deemed Lodging
Competitors’ distribution channels. Licensee will comply with all Brand
Standards applicable to the MVW Ritz-Carlton Business related to participation
in the Reservation System, including, without limitation, the prohibitions on
the inclusion of transient rental inventory other than inventory in Licensor
Lodging Facilities or in Projects in elements of the Reservation System visible
by customers, travel agents, and other members of the public. For purposes of
the foregoing, Licensor and Licensee acknowledge that the seasonal nature of the
Ritz-Carlton Destination Club Business and Member use patterns (including
increased Member use in high demand seasons) and leisure-based use patterns
(including higher weekend occupancy and lower weekday occupancy) create
transient rental inventory availability patterns that may differ from those for
Licensor Lodging Facilities. As such, certain Brand Standards relating to
participation in the Reservation System may not be suitable for the Ritz-Carlton
Destination Club Business (such as minimum room availability requirements for
Brand Loyalty Program redemptions or the “50% Off Associate Rate” winter offer).

B. If Licensee is in material breach of this Agreement and does not cure the
breach as required by Licensor’s notice of breach, Licensor may, in addition to
any other remedies it may have and in accordance with Section 18.4, suspend
Licensee’s right to use the Reservation System at one (1) or more of the
Projects (or a part of any Project) with respect to transient rentals of
Ritz-Carlton Destination Club Units and/or Ritz-Carlton Residential Units until
the breach is cured. In the event such breach relates to one (1) or more
Projects, Licensor may exercise its right to suspend Licensee from the
Reservation System under this Section 10.2.B. with respect to the applicable
Project(s). In the event such breach relates to the MVW Ritz-Carlton Business
apart from specific individual Projects or to all or substantially all of the
Projects, Licensor may suspend the entire MVW Ritz-Carlton Business and all of
the Projects from the Reservation System under this Section 10.2.B. Licensee
covenants not to bring any damages claims against Licensor and its Affiliates
arising from Licensee’s suspension from the Reservation System under
Section 18.4, other than claims that Licensee is not in breach of this
Agreement.

C. Licensee will have the right to make proposals regarding the Reservation
System to Licensor’s Reservation Users Group. The parties will agree on a
reasonable process for keeping Licensee apprised of initiatives of Licensor’s
Reservation Users Group that will affect the MVW Ritz-Carlton Business.

 

  10.3 Electronic Systems Provided Under License.

A. The Electronic Systems not purchased by Licensee will remain the sole
property of Licensor or any third party vendors, as applicable. Licensee will at
all times treat the Electronic Systems as confidential. As a condition to using
the Electronic Systems, Licensee must execute the Electronic Systems License
Agreement.

B. Licensee acknowledges that the Electronic Systems will be modified, enhanced,
replaced, or become obsolete, and that new Electronic Systems may be created to
meet the needs of the System and the continual changes in technology and that
any such new Electronic Systems will be subject to the terms of the Electronic
Systems License Agreement.

 

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C. Licensee will have the right to make proposals regarding the Electronic
Systems to the appropriate group within Licensor’s organization that is
responsible for strategic initiatives related to Electronic Systems. The parties
will agree on a reasonable process for keeping Licensee apprised of initiatives
regarding the Electronic Systems that will affect the MVW Ritz-Carlton Business.

 

  10.4 Proposed Enhancements.

Licensor will reasonably consider changes to the Electronic Systems proposed by
Licensee which address issues specifically relevant to the MVW Ritz-Carlton
Business (including any enhancements to the Electronic Systems needed to
implement such changes). Licensor shall respond to such requests within one
hundred twenty (120) days following Licensor’s receipt of the written request.
Licensor may condition its consent to changes to the Electronic Systems
suggested by Licensee based on factors such as: Licensee’s payment of the costs
related to such implementation, including, without limitation, incremental
internal or out-of-pocket design costs and operating costs (and the allocation
thereof on a fair and commercially reasonable basis to other users of the
applicable Electronic Systems who benefit from the change); the difficulties of
designing or administering such changes; the impact of such changes on the
Electronic Systems generally; third party consent requirements; the
prioritization of other Electronic Systems projects; the general feasibility of
implementing and maintaining such changes over time; and considerations relating
to owners and franchisees associated with Licensor Lodging Facilities.

 

  11. LICENSOR SERVICES AND SUPPORT

 

  11.1 Training.

A. Licensor will provide Licensee’s personnel that are designated by Licensee
(and approved by Licensor as being qualified to provide training programs)
training on certain aspects of the System, including the Electronic Systems,
that Licensee elects to participate in, as necessary to comply with the Brand
Standards. Licensor will also provide training material to such personnel to
facilitate the provision of such training by such personnel to other personnel
of Licensee and its Affiliates. Licensee shall deliver such programs in
accordance with the terms and conditions, and within the time frame, established
by Licensor.

B. Licensor will have the right to require that the management personnel
involved with the Projects attend or complete specific initial, ongoing, and
remedial training program(s) as necessary to comply with the Brand Standards.
Such training courses will be conducted at such time and place as Licensor may
designate; provided, however, that Licensor may authorize Licensee’s personnel
who Licensor has determined are qualified to provide certain training programs
to such management personnel at the Projects. Licensee must conduct such
training for Licensee’s employees as is required for them to properly operate,
administer and manage the Projects in accordance with the Brand Standards.
Licensor may also offer, and Licensee may elect to participate in, optional
training courses for personnel engaged in operating or managing the Projects.

C. Licensor shall provide Licensee’s sales and marketing executives with
training sessions relating to any significant changes to the Ritz-Carlton brand
and the Brand Standards and periodic “refresher” training sessions as reasonably
required by Licensor (but not more often than once every two (2) years).
Licensor shall have the right to require any third party marketing and
advertising agencies used by Licensee to satisfactorily complete brand immersion
sessions as a condition to Licensor’s approval of such agencies. The frequency
and timing of such sessions shall be as mutually agreed to Licensor and Licensee
(but not more frequently than annually).

 

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D. Licensor will have the right to charge tuition, fees or reimbursements
described in Section 3.3 for all training programs and brand immersion sessions
that Licensor offers, which must be paid before receiving training materials or
attending training. For all programs and activities under this Section 11,
Licensee will be responsible for paying all Travel Expenses and the salary and
other compensation for individuals attending such training. Licensor reserves
the right to require that employees of Licensee or its Affiliates and other
individuals receiving training execute confidentiality agreements in form and
substance satisfactory to Licensor.

 

  11.2 Other Services.

A. Licensor or its Affiliates will provide certain services to, and cooperate
with, and provide access to certain systems to Licensee, and its Affiliates in
connection with the MVW Ritz-Carlton Business substantially in accordance with
the practices of Licensor or its Affiliates as of the date of the Spin-Off
Transaction, as set forth in the Services Manual and subject to the provisions,
terms, conditions, restrictions and costs as set forth in the Services Manual.
Those services and systems include services and systems relating to: (i) sales
services, including global incentives and gift cards, the centralized travel
agent commission program, the TMC/consortia program, travel agency and
intermediary training programs, wholesale sales programs, and national group
sales; (ii) marketing services, including global partnerships and alliances,
global promotions, portfolio brand strategy services, facilitation of marketing
opportunities at Licensor Lodging Facilities, brand programs and customer
research; (iii) data access services, including MVW Ritz-Carlton Business
Customer Information; (iv) global engineering services, including energy
management and training; (v) data communications, reservations,
telecommunications support, and IMS system access; (vi) operational audit
systems; (vii) food and beverage training, procedures and specifications;
(viii) e-commerce and information resources services (as set forth in the
exhibit to the Electronic Systems License Agreement); and (ix) real estate tax
appeals services in certain jurisdictions. Licensee or its Affiliates will
provide certain services to, and cooperate with, and provide access to certain
systems, to Licensor and its Affiliates in connection with the MVW Ritz-Carlton
Business, Licensor’s Lodging Business or other businesses as the parties may
agree, substantially in accordance with the practices of Licensee or its
Affiliates as of the date of the Spin-Off Transaction, as set forth in the
Services Manual and subject to the provisions, terms, conditions, restrictions
and costs as set forth in the Services Manual. The Services Manual may not be
amended, modified or supplemented except as expressly permitted herein,
including in Section 11.2.C. Licensor and its Affiliates will provide such
services in accordance with the applicable standard for the provision of such
services as set forth in the Services Manual.

B. Licensor or its Affiliates will also provide Licensee or its Affiliates with
the following:

(i) Access to Brand Loyalty Programs, including the Ritz-Carlton Rewards program
pursuant to this Agreement and the Rewards Agreement between Licensor and
Licensee;

(ii) The opportunity to participate in supply procurement programs to the extent
they are generally available to Licensor Lodging Facility franchisees and
licensees and are relevant to the MVW Ritz-Carlton Business; and

(iii) The opportunity to participate in credit card payment processing
arrangements to the extent they are generally available to Licensor Lodging
Facility franchisees and licensees and are relevant to the MVW Ritz-Carlton
Business.

 

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C. The parties acknowledge and agree that future changes in and/or replacements
of Licensor and its Affiliates’ and/or Licensee’s and its Affiliates’
technologies, systems, business processes, programs and/or business partners
over the Term of this Agreement (“Business Changes”), including changes required
by Applicable Law or the interpretation or enforcement thereof, could make it
more difficult, costly, commercially impractical, or even impossible to continue
to provide one or more services provided by Licensor or its Affiliates or
Licensee or its Affiliates hereunder (the “Affected Services”), or could
otherwise necessitate changes to the Affected Services. In the event of such a
Business Change, Licensee and Licensor agree to discuss, in good faith, making
commercially reasonable changes to the Affected Services, including changes to
the manner, method, scope, delivery, timing and cost of the Affected Services,
or substitution of a similar service that accomplishes the principal underlying
purpose or function of the Affected Service, in order to permit the Affected
Services to continue on a commercially reasonable basis (such changes, “Service
Modifications”). The parties understand and agree that the party receiving an
Affected Service shall bear the reasonable incremental expense of any Service
Modification, including any increased costs required for the providing party to
continue to provide the Affected Service as so modified. If the parties cannot
agree upon commercially reasonable Service Modifications, taking into
consideration any offer made by the party receiving such service to pay the
incremental costs of any Service Modification, then the provider of the Affected
Service shall no longer be obligated to provide the Affected Service.
Notwithstanding the foregoing, in the event that Licensor or its Affiliates
generally discontinue any Affected Service that Licensor or its Affiliates had
previously offered or provided in connection with Licensor’s and its Affiliates’
Lodging Business, to Licensor Lodging Facility franchisees or to other third
parties, Licensor and its Affiliates shall no longer be required to provide that
Affected Service to Licensee or its Affiliates, and in such case Licensor or its
Affiliates shall, at Licensee’s request, cooperate with Licensee and its
Affiliates to transition any such Affected Service to another service provider
or to Licensee or its Affiliates, such transition costs to be at Licensee’s
expense.

D. Following the closing of the Spin-Off Transaction, Licensor and Licensee will
each designate, and notify each other in writing of, an individual within their
respective organizations at the vice president level or above (“Contact Person”)
that will serve as the key contact person for the other party. Although neither
party will be obligated to communicate with the other party exclusively through
the other party’s Contact Person, each such Contact Person will have the
authority to communicate on behalf of their organization. Either party may
change the individual designated as its Contact Person at any time upon notice
to the other party.

E. Licensor and Licensee shall hold an annual meeting not later than April 1 of
each calendar year to discuss compliance, customer satisfaction, development
issues, sales and marketing and cooperation issues, and any significant systemic
program or system changes proposed by Licensee. Either party may request
additional meetings if desired, and the other party shall reasonably consider
such request.

F. The parties acknowledge that Licensor is currently providing and may continue
to provide at specific Projects management services and/or shared services with
respect to those Projects under separate RCHC Management Agreements or shared
services agreements, as applicable, related to those Projects.

 

  12. REPAIRS AND MAINTENANCE

A. Licensee will (or, as applicable, will request that Property Owners’
Associations) maintain the Projects in good repair and first-class condition and
in conformity with Applicable Law and the Brand Standards. Licensee or its
Affiliates must fund the cost of all repairs and alterations at the

 

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Projects (or, as applicable, request that Property Owners’ Associations fund
such costs). Any significant alterations, renewals, replacements, or additions
to any Project, including those that affect the design, character, appearance or
fire and life safety elements of any Project, will be carried out in accordance
with the process set forth in the Design Review Addendum. However, repairs and
maintenance that are conducted in the ordinary course of business shall not be
subject to process set forth in the Design Review Addendum.

B. Licensee will (and, as applicable, will request that Property Owners’
Associations) give reasonable consideration to implementing the following
guidelines for significant renovation of Ritz-Carlton Destination Club Units,
corridors and Public Facilities of Projects: (i) replacement of Soft Goods at
least every five (5) to six (6) years after the date such Soft Goods were
installed and (ii) replacement of Case Goods at least every ten (10) to twelve
(12) years after the date such Case Goods were installed; provided, however,
that earlier or more frequent renovations or replacements may be necessary to
maintain the quality level of the Projects in compliance with the Brand
Standards and to comply with the Quality Assurance Program. In connection with
replacements in the immediately preceding sentence, the replacement of all Soft
Goods or all Case Goods, as the case may be, will be done at the same time for
each phase of a Project rather than being done in a piecemeal fashion.

C. In connection with any replacement of Soft Goods or Case Goods for each phase
of a Project, Licensor has the right to require Licensee (and, if applicable, to
require Licensee to request Non-Controlled Property Owners’ Associations) to
upgrade the rest of the particular phase of the Project to conform to the
building décor, trade dress, and FF&E required under then-current Brand
Standards for Projects of similar age. Licensee will (or, as applicable, will
request Property Owners’ Associations to) submit its plans for such upgrading
and remodeling to Licensor for its review and approval in accordance with the
Design Review Addendum.

 

  13. PROPRIETARY MARKS AND INTELLECTUAL PROPERTY

 

  13.1 Licensor’s and Licensee’s Representations and Responsibility Regarding
the Licensed Marks.

A. Licensee acknowledges that Licensor has provided Licensee with a list of the
trademark registrations and applications for the Licensed Marks and the
jurisdictions in which the registrations are active or applications for such
Licensed Marks are pending, and Licensor hereby represents that such list is
accurate, true, and correct to the best of Licensor’s actual knowledge as of the
Effective Date hereof.

B. Licensor acknowledges that Licensee has provided Licensor with a list of
(i) all trademarks, service marks, and trade names that Licensee or its
Affiliates are currently using or intend to use in connection with the
Ritz-Carlton Destination Club Business and Ritz-Carlton Whole Ownership
Residential Business (whether or not such trademarks, service marks, and trade
names have been registered or registration has been applied for) and which are
not included in the list of Licensed Marks that Licensor has provided to
Licensee under Section 13.1.A. and the registration or application status of
each such trademark, service mark, and trade name on a
jurisdiction-by-jurisdiction basis and (ii) the jurisdictions in which (1) there
are Existing Projects or Projects currently under development; (2) there is a
Sales Facility or sales or marketing office related to the MVW Ritz-Carlton
Business; (3) Licensee or its Affiliates are marketing or selling Ritz-Carlton
Destination Club Units or Ritz-Carlton Residential Units (but in which there are
no physical Sales Facilities or sales or marketing offices); (4) Licensee has a
commercially reasonable basis for anticipating developing New Projects or
marketing or selling Ritz-Carlton Destination Club Units or Ritz-Carlton
Residential Units during the twelve (12) month period immediately following the
Effective Date; or (5) Licensee operates or controls a website under a
country-code top-level domain used to promote the MVW Ritz-Carlton Business.
Licensee hereby represents that such lists are accurate, true, and correct as of
the Effective Date.

 

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C. Licensor represents with respect to the Licensed Marks that:

(1) Licensor or its Affiliates own the trademark registrations and applications
for (or have the right to use and sublicense, subject to all of the reservations
of rights and exceptions to and limitations on exclusivity set forth in this
Agreement), the Licensed Marks for the Licensed Services in the jurisdictions
all as identified on the list described in Section 13.1.A.

(2) Licensor has the right to grant the license contemplated hereunder, subject
to the following: (a) neither Licensor nor its Affiliates own trademark
registrations or applications for the Licensed Marks for some or all of the
Licensed Services in every country or jurisdiction of the Territory and some
countries or jurisdictions do not permit registration of service marks or do not
have trademark registration systems (each, an “Unregistered Area”), (b) Licensor
or its Affiliates own trademark registrations for the Licensed Marks for the
Licensed Services in countries or jurisdictions in the Territory in which it
does not currently render Licensed Services and/or hotel services under the
Licensed Marks, and some of these registrations may be susceptible to
cancellation in whole or in part for nonuse or abandonment now or in the future
(“Vulnerable Registrations”), and (c) the RHL Agreement. Licensor will provide
Licensee with a list of jurisdictions that may have Vulnerable Registrations
within ninety (90) days following the end of each calendar year during the Term.
This provision does not require Licensor to obtain opinions or advice from
foreign counsel or other counsel regarding the potential vulnerability of the
registrations, but rather only requires Licensor to identify jurisdictions that
may have Vulnerable Registrations based on the information possessed by Licensor
at the time.

(3) To the best of Licensor’s actual knowledge, other than the RHL Agreement,
there are no agreements, claims, litigation, or proceedings completed, pending
or threatened in writing, that might affect its right to grant the license
subject to all of the reservations of rights and exceptions to and limitations
on exclusivity set forth in this Agreement.

D. Licensor covenants with respect to the Licensed Marks that:

(1) Subject to Section 13.1.D(2), it will take or will cause to be taken all
commercially reasonable steps necessary to preserve and protect the ownership
and validity of the Licensed Marks; provided, however, that Licensor will not be
required to maintain any particular registration or application for the Licensed
Marks that Licensor determines cannot or should not be maintained, and Licensor
will not be required to take action against any third-party trademark, name or
other identifier that Licensor determines cannot or should not be challenged;
and

(2) (i) If Licensee has a commercially reasonable expectation that it will
render Licensed Services under the Licensed Marks in any particular Unregistered
Area or in a jurisdiction of which Licensor has notified Licensee may have
Vulnerable Registrations under Section 13.1.C(2) (“Subject Jurisdictions”),
Licensee will provide notice to Licensor of the Subject Jurisdiction(s) at least
ninety (90) days prior to rendering any Licensed Services under the Licensed
Marks or entering into any sublicense agreement under Sections 5.1.B., 5.2.D.,
or 5.8.B., in any Subject Jurisdiction. Upon receipt of such notice(s), Licensor
or its Affiliate will file and prosecute new trademark application(s), or
continue to use commercially reasonable efforts to prosecute any then-pending
trademark applications, at Licensor’s expense, subject to any prior or superior
third-party rights in that country or jurisdiction and the laws and regulations
of that country or jurisdiction. Licensor shall have no obligation to file
applications for or otherwise obtain any trademarks that have previously been
registered or applied for by

 

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third parties or with respect to which there are prior users or prior
conflicting rights held by third parties. Licensor agrees to consult with
Licensee upon learning of third-party rights that may conflict with Licensor’s
ability to obtain a registration in the Subject Jurisdiction; provided, however,
that such consultation shall not, and is not intended to, modify the provision
above that Licensor has no obligation to file or obtain such trademarks and that
Licensor may make such determination in its sole and final discretion. Licensee
shall have no claim against Licensor or its Affiliates with respect to, and
neither Licensor nor its Affiliates shall be liable for, any failure by Licensor
or its Affiliates to obtain registration of the Licensed Marks in any
Unregistered Area or to obtain any protection of the Licensed Marks in
jurisdictions with Vulnerable Registrations. Licensee shall have no right to
use, sublicense, or otherwise permit or consent to the use of, any of the
Licensed Marks for any purpose in any Unregistered Areas or any jurisdictions of
which Licensor has notified Licensee may have Vulnerable Registrations until
Licensor has notified Licensee in writing that Licensee is authorized to use the
Licensed Marks in such jurisdiction(s).

(ii) Licensor acknowledges that in certain circumstances Licensee or its
Affiliates may need to pursue opportunities in Subject Jurisdictions prior to
the time that Licensee has been notified by Licensor that Licensee or its
Affiliates are authorized to use the Licensed Marks in such Subject
Jurisdictions and, notwithstanding Section 13.1.D.(2)(i), such use will not be
deemed a breach of this Agreement prior to Licensor notifying Licensee that a
Licensed Mark in a Subject Jurisdiction cannot be registered or cannot be used
due to prior or superior third party rights. Until such time that Licensor has
authorized Licensee’s or its Affiliate’s use of the Licensed Marks in the
Subject Jurisdiction, if Licensee or its Affiliate elects to proceed with the
use of the Licensed Marks prior to receiving such notice, (x) such use shall be
at Licensee’s or its Affiliates’ sole risk and Licensee shall indemnify Licensor
as if such use were an unauthorized use pursuant to Section 16.1.A.(i), and
(y) notwithstanding anything in Section 16.1.B. to the contrary, Licensor will
have no obligation to indemnify Licensee or its Affiliates for such use. If
Licensor determines, and notifies Licensee, that a Licensed Mark in a Subject
Jurisdiction cannot be registered or cannot be used due to prior or superior
third party rights, Licensee and its Affiliates shall cease any use that it
commenced with respect to the applicable Licensed Mark under this
Section 13.1.D.(2)(ii) promptly following receipt of such notice.

E. If, following the Effective Date, Licensor or its Affiliates secure a
trademark registration for the applicable elements of the MVW Ritz-Carlton
Business for the registered services (that are Licensed Services) under the
applicable Licensed Mark in any portion of the Excluded Area or, in the case of
the Blocked Areas, if Licensor obtains the right to grant licenses for the
“Ritz-Carlton” name and mark to third-parties, Licensee will be granted the
right to use the Licensed Marks and the System pursuant to Section 1.A in the
subject portion of the Excluded Area, but only with respect to the specific
Licensed Services covered by the newly secured registration or the specific
Licensed Services and jurisdiction(s) covered by a right obtained to grant
licenses in the Blocked Areas, if applicable.

 

  13.2 Licensee’s Use of System and Licensor Intellectual Property.

A. With respect to Licensee’s use of the System and Licensor Intellectual
Property under this Agreement:

(1) Licensee will use the System and Licensor Intellectual Property only as and
in the form and manner expressly authorized by Licensor. Unauthorized use of
Licensor Intellectual Property by Licensee will constitute an infringement of
Licensor’s rights as well as a material default of this Agreement;

(2) Licensee will use the Licensed Marks only in substantially the same places,
combination, arrangement, and manner as provided in the Brand Standards or
approved by Licensor. Licensee will use the symbol “®,” “TM,” “SM” or such
symbols or words as Licensor may designate to use with or otherwise protect the
Licensed Marks;

 

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(3) (i) Licensee will identify itself as a licensee of Licensor and the owner
and/or operator of the MVW Ritz-Carlton Business and each Project as allowed or
required by Licensor under the Brand Standards.

(ii) Licensor hereby licenses Licensee to, where applicable, use “Ritz-Carlton”
as part of the corporate names of Licensee’s Affiliates existing as of the date
of the Spin-Off Transaction (“Permitted Licensee Affiliate Names”) as set forth
in Exhibit J.

(iii) Subject to (iv) below, Licensor may terminate such license to use the
Permitted Licensee Affiliate Names immediately upon notice to Licensee, in which
event, Licensee’s and its Affiliates’ use of such names shall be immediately
discontinued and such corporate names shall be promptly changed to names that do
not use the words “Ritz”, “Carlton”, or “Ritz-Carlton” or any of Licensor’s or
its Affiliates’ other trademarks or trade names or any similar trademarks or
trade names if (i) at any time the aggregate number of Ritz-Carlton Destination
Club Units is less than one-half (1/2) of the total number of luxury tier
Destination Club Units owned or operated by Licensee, or (ii) Licensee acquires,
or merges or is combined with, the Destination Club Business of Hilton Worldwide
or its successors-in-interest (excluding Licensor or its Affiliates), Starwood
Hotels and Resorts or its successors-in-interest (excluding Licensor or its
Affiliates), or Four Seasons Hotels and Resorts or its successors-in-interest
(excluding Licensor or its Affiliates) or any Hilton Brand, Starwood Brand, or
Four Seasons Brand and continues to use any Hilton Brand, Starwood Brand, or
Four Seasons Brand on or in connection with its Destination Club Business,
provided that if clause (ii) is implicated, Licensee shall, in no event, be
required to discontinue such use until the fifth (5th) anniversary of the
Effective Date. Additionally, if any Affiliate of Licensee that is using a
Permitted Licensee Affiliate Name affiliates with a Lodging Competitor Brand,
Licensor may terminate the right to use the Permitted Licensee Affiliate Name as
to that Affiliate, in which event, the use of the Permitted Licensee Affiliate
Name of such Affiliate shall be immediately discontinued and such corporate name
shall be promptly changed to a name that does not use the words “Ritz”,
“Carlton”, or “Ritz-Carlton” or any of Licensor’s or its Affiliates’ other
trademarks or trade names or any similar trademarks or trade names.

(iv) In the event that it is impossible for any Permitted Licensee Affiliate
Name to be changed to a corporate name that does not use the words
“Ritz-Carlton” pursuant to (iii) above, the license to use the Permitted
Licensee Affiliate Name will remain in place for so long during the Term as it
remains impossible to change the name; provided, however, the parties will
discuss and agree on a solution whereby there are no further consumer-facing
uses of the Permitted Licensee Affiliate Name, which may include the adoption of
a “doing business as” (DBA) name that does not use the words “Ritz”, “Carlton”,
or “Ritz-Carlton” or any of Licensor’s or its Affiliates’ other trademarks or
trade names or any similar trademarks or trade names.

(v) Licensee shall not, at any time, include any brand name in its corporate
name (other than the name “Marriott” in the Permitted Corporate Name and
Permitted Licensee Affiliate Names, both as defined in, and in accordance with,
the Marriott License Agreement, and the name “Ritz-Carlton” in the Permitted
Licensee Affiliate Names as provided herein), other than a new brand name
developed by Licensee that does not contain any of the Licensor Intellectual
Property or any similar marks or names, provided, that Licensee and its
Affiliates may at any time use the words “Vacation”, “Vacations”, “Worldwide”,
and/or “Corporation” in an entity name that does not contain any of the Licensor
Intellectual Property or any similar marks or names.

 

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(vi) Licensee acknowledges and agrees that the grant of rights to use the
Permitted Licensee Affiliate Names hereunder shall not restrict or limit in any
way Licensor’s or its Affiliates’ ability to use the words “Ritz”, “Carlton”, or
“Ritz-Carlton” in any form, manner, or combination or in any context or respect
at any time, provided that Licensor and its Affiliates will not use all four of
the words “Ritz”, “Carlton”, “Development” and “Company” in such exact order and
form in the name of a single entity for consumer-facing purposes at any time
during the Term that Licensee is permitted to use the name “Ritz-Carlton
Development Company” as a Permitted Licensee Affiliate Names hereunder, but
Licensor and its Affiliates may use such words in any other combination or
manner without any restriction whatsoever.

(vii) Licensee will not permit any Property Owners’ Associations to use the
words “Ritz-Carlton” or any other Licensor Intellectual Property or any similar
marks or names in their names.

(4) Notwithstanding Section 13.2.A.(3) or any “fair use” rights that Licensee or
its Affiliates may have with respect to the Permitted Licensee Affiliate Names,
Licensee and its Affiliates are expressly prohibited from using, and Licensee
hereby agrees not to use and agrees to cause its Affiliates not to use, the
Permitted Licensee Affiliate Names (or any variation thereof) as part of, or in
any way associated with, the name of any property that is not part of the MVW
Ritz-Carlton Business without Licensor’s prior written consent in its sole
discretion. For illustrative purposes only, Licensee and its Affiliates would be
prohibited from using the following name: “Napa Valley Destination Club operated
by Ritz-Carlton Development Company”. However, if a jurisdiction recognizes
nominative fair use rights and a Member makes nominative fair use of a Licensed
Mark in connection with a sale of its interests in a Project in such
jurisdiction, then this section is not intended to limit or modify such fair use
rights. If Licensee or its Affiliates use the Permitted Licensee Affiliate
Names, or any variation thereof in violation of this Section 13.2.A(4), then, in
addition to any damages that Licensor or its Affiliates may be entitled to
hereunder or under Applicable Law, Licensor will have the right to require
Licensee or its Affiliates, as applicable, to pay Royalties for each property
with respect to which Licensee or its Affiliates are using the Permitted
Licensee Affiliate Names, or a variation thereof, in violation of this
Section 13.2.A(4).

(5) Licensee does not have any right to and will not Transfer, sublicense, or
allow any Person to use any of the Licensor Intellectual Property, except as
expressly permitted in this Agreement;

(6) Licensee will not use the Licensor Intellectual Property to incur any
obligation or indebtedness on behalf of Licensor or any of its Affiliates;

(7) Licensee will not apply for trademark or service mark registration of any
Proprietary Mark, any variation thereof, or any mark determined by Licensor to
be similar to, or that includes, any Proprietary Mark in the United States or
any other country or jurisdiction. If Licensee requests that Licensor file an
application for a new trademark that includes any Proprietary Mark which is
related to a new program or initiative under the MVW Ritz-Carlton Business and
Licensor approves such request (such approval to be granted if the request is
commercially reasonable), Licensor will file such application at Licensor’s
expense. If Licensee wishes to modify an existing Licensed Mark and requests
that Licensor file an application for such modified Licensed Mark, and Licensor
approves such request to modify, Licensor will file such application, but
Licensee must reimburse Licensor for all costs and expenses related to such
application (including without limitation the costs for conducting a trademark
search, filing and prosecuting an application through to registration,
maintenance of any resulting registrations (unless such resulting registration
replaces an existing registration for a Licensed Mark that is not maintained),
and any related appeals, proceedings, disputes, oppositions and litigation).

 

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(8) If Licensee or any of its Affiliates registers or has registered or directly
or indirectly controls any domain name that is determined by Licensor to be
similar to the domain names owned by Licensor or its Affiliates as described in
Section 13.2.B(1) below or that incorporate any of the Proprietary Marks (or any
variation thereof), Licensee or its Affiliates, as applicable, must
unconditionally assign such domain names to Licensor or its Affiliate;

(9) Licensee will obtain Licensor’s approval of, and will comply with Licensor’s
instructions in filing and maintaining, any required business, trade,
fictitious, assumed, or similar name registrations containing the Licensed
Marks. Licensee will also execute any documents and take such other action
deemed necessary by Licensor or its counsel to protect and enforce the
Proprietary Marks or maintain their validity and enforceability; and

(10) If litigation or other demand or action involving the Licensor Intellectual
Property is instituted or threatened against Licensee or any notice of such
infringement is received by Licensee, or if Licensee becomes aware of any
infringement or other violation of the Licensor Intellectual Property by
Licensee or a third party, Licensee will promptly notify Licensor in writing and
will cooperate fully with Licensor and comply with Licensor’s instructions in
connection with Licensor’s defense, prosecution or settlement of such
litigation, notice, infringement or violation. Licensor shall have sole
responsibility for enforcing the Licensor Intellectual Property at its sole
discretion and cost and is entitled to all settlements, damages, costs,
attorneys’ fees or other amounts received from such enforcement efforts. If any
such settlement amount or damage award received by Licensor is solely based on
damage to or impact on the exclusively licensed aspects of the MVW Ritz-Carlton
Business, then after applying such amount or award toward Licensor’s attorneys’
fees and other costs related to the matter, Licensor will share any remaining
portion of the settlement amount or damage award with Licensee in a equitable
manner as determined by Licensor based on the relative interests of the parties.

B. Licensee agrees that:

(1) Licensor and/or its Affiliates are the owners or licensees of all right,
title, and interest in and to the System (other than Electronic Systems provided
by or licensed by third parties), the goodwill associated with and symbolized by
the Proprietary Marks, and the domain names www.ritzcarltonclub.com and
www.ritzcarlton.com, and other domain names owned by Licensor or its Affiliates;

(2) the Proprietary Marks are valid and serve to identify the System and those
who hold rights to operate under the System;

(3) the Proprietary Marks are subject to replacement, addition, deletion, and
other modification by Licensor (or the Affiliate that owns the Proprietary
Marks) in its discretion. In such event,

(a) Licensor may require Licensee to discontinue or modify Licensee’s use of any
of the Licensed Marks or to use one or more additional or substitute or modified
marks; provided, however, that Licensor shall not amend, modify, delete, or
change the words “Ritz-Carlton” in any of the Licensed Marks described in
(i) through (ii) and in (iv), (v) or (vi) of the definition of “Licensed Marks”
as used in connection with the MVW Ritz-Carlton Business (other than the
appearance, including the color, font, stylization, script, or format of the
words “Ritz-Carlton” used as part of such Licensed Marks, provided that Licensor
will not change the size or location of the words “Ritz-Carlton” in relation to
the other components of the marks described in (i) through (ii) and in (iv),
(v) or (vi) of the definition of Licensed Marks) without Licensee’s prior
written consent in its sole discretion. Notwithstanding the foregoing, Licensee
will not be required to discontinue using or change

 

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any Licensed Mark that is used solely in connection with the MVW Ritz-Carlton
Business and is not the same as or similar to any mark owned by Licensor or its
Affiliates for use in connection with Licensor Lodging Facilities or other
businesses and activities of Licensor and its Affiliates; and

(b) Licensor may require that Licensee bear the costs related to such
replacement, addition, deletion, or other modification in respect of the MVW
Ritz-Carlton Business; provided, however, that Licensor shall treat Licensee in
the same way that Licensor treats owners of Ritz-Carlton Hotels with respect to
such costs, or the economic equivalent thereof.

(4) During the Term and thereafter, Licensee will not directly or indirectly
(i) attack or otherwise challenge the ownership, title or rights of Licensor or
its Affiliates in and to any part of the System; (ii) contest the validity of
any part of the System, or the right of Licensor to grant to Licensee the use of
any part of the System (other than Electronic Systems provided by or licensed by
third parties) in accordance with this Agreement; (iii) take any action or
refrain from taking any action that could impair, jeopardize, violate, or
infringe any part of the System; (iv) claim adversely to Licensor or its
Affiliates any right, title, or interest in and to the System; (v) assert any
interest in all or any part of the System or the Licensor Intellectual Property
by virtue of a constructive trust; (vi) misuse or harm or bring into dispute the
System; or (vii) make any demand, or serve any notice orally or in writing, on a
third party or institute any legal action against a third party, or negotiate,
litigate, compromise or settle any controversy with a third party in relation to
any claim, suit or demand, involving the Licensor Intellectual Property without
first obtaining Licensor’s consent, which consent may be granted or withheld in
Licensor’s discretion;

(5) Licensee has no Ownership Interest in the System or the Licensor
Intellectual Property (including any modifications, derivatives or additions
thereto proposed by or on behalf of Licensee or its Affiliates (for purposes
hereof, collectively, “modifications”)), and Licensee’s use of the System and
the Licensor Intellectual Property in connection with the operation of the MVW
Ritz-Carlton Business and the Projects will not give Licensee any Ownership
Interest therein. Licensee hereby assigns (and will cause each of its employees
or independent contractors who contributed to such modifications to assign) to
Licensor, in perpetuity throughout the world, all rights, title and interest
(including the entire copyright and all renewals, reversions and extensions
thereof) in and to all modifications to the Licensor Intellectual Property and
other aspects of the System proposed or created by or on behalf of Licensee or
its Affiliates. Licensee waives (and will cause each of its employees or
independent contractors who contributed to such modifications to waive) all
rights of “droit moral” or “moral rights of authors” or any similar rights that
Licensee (or its employees or independent contractors) may now or hereafter have
in such modifications, and Licensee disclaims any interest in such modifications
by virtue of a constructive trust. Licensee agrees to execute (or cause to be
executed) and deliver to Licensor any documents and to do any acts that may be
deemed necessary by Licensor to perfect or protect the title in the
modifications herein conveyed, or intended to be conveyed now or in the future;
and

(6) all goodwill arising from Licensee’s use of the System (other than
Electronic Systems provided by or licensed by third parties) and any other
aspect of the System will inure solely and exclusively to Licensor’s benefit,
and upon expiration or termination of this Agreement, no monetary amount will be
assigned as attributable to any goodwill associated with Licensee’s use of any
aspect of the System.

C. The provisions of this Section 13.2 will survive the expiration or
termination of this Agreement.

 

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  13.3 Licensee’s Use of Other Marks.

A. Licensee will not use in any manner any of the System in connection with any
Other Mark(s) (except the Licensee Marks), without Licensor’s prior written
approval in Licensor’s sole discretion.

B. Licensee will not use any name or Other Mark (including the Licensee Marks)
in connection with the MVW Ritz-Carlton Business or the Projects that may
infringe upon, or tend to be confused with, dilute or otherwise violate a third
party’s trade name, trademark, or other rights in intellectual property.

C. Except as otherwise expressly permitted by Section 9.3 and 9.5, Licensee will
not use or permit the use of any Other Mark (except for the Licensee Marks) in
connection with the MVW Ritz-Carlton Business or the Projects or in any
Marketing Content, advertising of, for, relating to or involving the MVW
Ritz-Carlton Business or the Projects or its operation without Licensor’s prior
approval, which approval may be granted or withheld in Licensor’s sole
discretion; provided, however, nothing in this Section 13.3.C is intended to
prohibit Licensee or its Affiliates from utilizing Other Marks in connection
with the operation of country clubs, spas, golf courses, food and beverage
outlets, gift and sundry shops in the ordinary course of business at Projects.

 

  13.4 Licensee Website.

A. Licensee has established and intends to continue the use of an Internet
website to advertise and promote the MVW Ritz-Carlton Business and the Projects
(“Licensee’s Website”). Except as permitted with respect to Licensee’s Website
as described below, Licensee will not display the Licensed Marks or associate
the System with (through a link or otherwise) any website, electronic Marketing
Content, domain name, address, designation, or listing on the Internet or other
communication system, except in compliance with the Brand Standards. Licensor
will not object to foregoing items that Licensee has in place as of the
Effective Date as not being in compliance with Brand Standards, other than
misuses of the Licensed Marks; provided, however, that, following the Effective
Date, any changes, additions, expansions, or other modifications of the
foregoing and any new uses with respect to the foregoing must be in accordance
with the Brand Standards. Licensor will permit Licensee to operate and maintain
Licensee’s Website, provided that (a) the form, content and appearance of the
Licensed Marks that appear on Licensee’s Website, and any modifications thereto,
comply with the Brand Style and Communications Guide or are otherwise approved
in writing by Licensor (such approval not to be unreasonably withheld,
conditioned or delayed) before being posted on the Internet; and (b) Licensee’s
Website complies with all Data Protection Laws and the data protection laws of
other jurisdictions that apply to Licensee’s Website.

B. Licensee agrees that Licensor will be the registrant (i.e., registered owner)
of all domain names that contain, reference, or are comprised of any of the
Licensed Marks now and in the future (collectively, “Licensed Domains”), and
that all Licensed Domains will be registered and maintained with Licensor’s
domain name registrar (the “Registrar”), which, as of the Effective Date, is
CSC. Licensor will have a “parent account” at the Registrar, and Licensee will
have a “child account” at the Registrar under Licensor’s parent account for
purposes of registering and managing all Licensed Domains that Licensee is
permitted to use under this Agreement. Licensee will serve as and be identified
as the administrative and technical contacts for the Licensed Domains, and
Licensee will be solely responsible for the use and maintenance of the Licensed
Domains (including without limitation controlling the child account and the user
name and password for that account, paying all registration and renewal fees,
maintaining and updating the servers for the Licensed Domains and any
corresponding websites, and maintaining accurate contact information on the
WHOIS records for the administrative and

 

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technical contacts). However, Licensor has the option, but is not required, to
pay registration and renewal fees and take any actions to prevent the
cancellation or expiration of any of the Licensed Domains. Licensee will not
directly or indirectly: (1) delete or cancel any of the Licensed Domains without
prior notice to Licensor and affording Licensor an opportunity to assume control
or management of such Licensed Domains, (2) transfer control or management of
any of the Licensed Domains to a new registrar, (3) transfer ownership of any of
the Licensed Domains to an owner other than Licensor, (4) except as consented to
by Licensor, encumber any of the Licensed Domains in any way (collectively, the
“Changes”), or (5) permit use of the Licensed Domains, directly or indirectly,
in any manner inconsistent with the terms of this Agreement. Licensee’s child
account with the Registrar will not permit Licensee to make any Changes. Upon
expiration or termination of the Agreement, Licensor will subsume Licensee’s
child account into its parent account and will take over the disposition and
management of all Licensed Domains in that account as Licensor may determine in
its sole discretion, and Licensee will provide any cooperation necessary to
carry this out.

 

  13.5 Credit and Debit Cards.

A. Except to the extent used under Section 13.5.B(ii)(a), Licensee and its
Affiliates shall not use any of the Licensor Intellectual Property, including
the Licensed Marks or the MVW Ritz-Carlton Business Customer Information, to
brand, co-brand, sponsor, market, or promote or otherwise affiliate with a
credit, charge or debit card other than through an arrangement with Licensor in
connection with a Ritz-Carlton branded, co-branded, sponsored, marketed, or
promoted credit, charge or debit card.

B. Licensee shall not market or promote the acquisition of a credit, charge or
debit card in connection with the MVW Ritz-Carlton Business, including using any
customer-facing sales assets or facilities that contain or display any of the
Licensor Intellectual Property (including phone numbers, websites, domain names,
screen names, social networking names, email addresses, and customer
information) or Branded Elements in connection with the marketing or promotion
of the acquisition of a credit, charge or debit card, other than (i) in an
arrangement with Licensor in connection with a Ritz-Carlton branded, co-branded,
sponsored, marketed or promoted credit, charge or debit card, or (ii) in an
arrangement that complies with Section 13.5.A above, and each of the following,
subject to Section 13.5.C: (a) Licensee and its Affiliates may not market or
promote such card except to existing Members of Ritz-Carlton Destination Club
Products, (b) Licensee and its Affiliates may not market or promote such card at
Ritz-Carlton Destination Club Projects or Ritz-Carlton Residential Projects,
(c) such card may offer benefits to cardholders such as discounts on
Ritz-Carlton Destination Club Products, or stays, products or services at
Ritz-Carlton Destination Club Projects, but may not offer points or other
benefits that consist of or are exchangeable into points under a Brand Loyalty
Program, or usage rights for Ritz-Carlton Destination Club Units that may be
used or converted into stays or other benefits at Licensor Lodging Facilities,
and (d) such card may not be branded or sponsored by any Lodging Competitor
Brand.

C. Licensee shall only be obligated to participate in an arrangement with
Licensor in connection with a Ritz-Carlton branded, co-branded, sponsored,
marketed or promoted credit, charge or debit card provided that Licensor is
complying with its obligations relating to such arrangement in the Services
Manual. Unless Licensee elects to no longer participate in such arrangement, so
long as Licensee is participating in such an arrangement and Licensor is
complying with its obligations relating to such arrangement in the Services
Manual, Licensee shall not have the right to enter into an arrangement described
in clause (ii) of Section 13.5.B.

 

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D. Nothing in this Section 13.5 shall restrict Licensee from entering into
(i) credit, charge or debit card acceptance, merchant, servicing, and similar
arrangements in the ordinary course of business with credit, charge and debit
card companies, or (ii) subject to Sections 9.3 and 9.5, co-marketing,
promotional and similar arrangements with credit, charge and debit card
companies designed to promote the sale and general awareness of Ritz-Carlton
Destination Club Products and Ritz-Carlton Residential Units to the card
company’s customer base or (iii) subject to Sections 9.3 and 9.5, arrangements
with credit, charge and debit card companies under which the card company’s
customers can use credit card points for stays and services at Projects. For the
avoidance of doubt, with respect to clauses (ii) and (iii) in the previous
sentence, Licensee is not permitted to use any MVW Ritz-Carlton Business
Customer Information; provided, that in the case of clause (ii), Licensee may
use the list of Members of Ritz-Carlton Destination Club Products for the sole
purpose of expunging such Members from the card company’s recipient list for
such promotion.

 

  13.6 Use of Licensee Marks.

A. Licensee represents that: (i) Licensee owns the registrations and/or the
applications to register the Licensee Marks; and (ii) to the best of its actual
knowledge: (x) Licensee has the right to consent to Licensor’s use of the
Licensee Marks and (y) there are no claims, litigation or proceedings pending or
threatened by any Person that would materially affect Licensor’s use of the
Licensee Marks as contemplated by the terms of this Agreement. Licensee hereby
consents to Licensor’s and its Affiliate’s use of the Licensee Marks in
connection the MVW Ritz-Carlton Business and the Projects (including in printed
marketing and promotional materials, and on Licensor’s website) and agrees that
such consent shall remain in full force and effect until thirty (30) days
following the termination of this Agreement for any reason. Licensor consents to
Licensee’s use of the Licensee Marks in connection with the Licensed Marks on
the terms and conditions set forth in this Section 13.6.

B. Licensee will use the Licensee Marks together with the Licensed Marks only as
authorized under this Agreement in connection with the MVW Ritz-Carlton Business
and the Projects and only in accordance with the Brand Style and Communications
Guide or as otherwise authorized in advance by Licensor in writing. Licensee
will strictly conform all uses of the Licensee Marks together with the Licensed
Marks to the content, layout and graphic design of sample materials in
accordance with the Brand Style and Communications Guide or as otherwise
approved in advance by Licensor, and Licensee shall restrict such usage to types
of activity, medium or signage in accordance with the Brand Style and
Communications Guide or as otherwise specifically approved in advance by
Licensor.

C. Licensee will not file, seek or make any registration containing any of the
Licensee Marks together with any Licensed Marks. If such filing is required by
Applicable Law, such registration shall be subject to the prior written approval
of Licensor and shall be made solely by Licensor in Licensor’s name. Licensee
shall withdraw, cancel or assign to Licensor, at Licensor’s option, any
unauthorized registration upon the request of Licensor. At Licensee’s request
upon the expiration or termination of this Agreement, Licensor shall withdraw or
cancel any registration containing any Licensee Marks together with Licensed
Marks.

D. Upon termination of this Agreement for any reason, Licensee will cease using
the Licensed Marks as specified in Section 19 of this Agreement, including all
use of the Licensed Marks together with the Licensee Marks as authorized
pursuant to this Section 13.6. Upon termination of this Agreement for any
reason, Licensor will cease using the Licensee Marks as specified in Section 19
of this Agreement, including all use of the Licensee Marks together with the
Licensed Marks as authorized pursuant to this Section 13.6.

E. Licensee acknowledges and agrees that (a) it shall not acquire any right,
title or interest in or to the Licensed Marks as a result of the use of the
Licensee Marks together with the Licensed Marks, (b) all goodwill associated
with the Licensed Marks generated by their use together with

 

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the Licensee Marks shall inure solely to Licensor, and (c) it shall not assert
that the Licensed Marks and the Licensee Marks when used together comprise a
composite or unitary mark. Licensor acknowledges and agrees that (a) it shall
not acquire any right, title or interest in or to the Licensee Marks as a result
of the use of the Licensed Marks together with the Licensee Marks, (b) all
goodwill associated with the Licensee Marks generated by their use together with
the Licensed Marks shall inure solely to Licensee, and (c) except as necessary
in connection with a filing by Licensor under Section 13.6.C, it shall not
assert that the Licensee Marks and the Licensed Marks when used together
comprise a composite and unitary mark.

F. Licensee hereby acknowledges and agrees that if at any time the use of the
Licensee Marks in connection with the MVW Ritz-Carlton Business or any Project
is challenged by a third party, Licensor may require that such use immediately
cease or that the affected Licensee Marks be changed in a manner that resolves
the challenge raised by the third party. Notwithstanding the potential
requirement above by Licensor that Licensee cease using or use a changed
Licensed Mark upon a third-party challenge to the Licensed Mark, if Licensee
believes such challenge is without merit, Licensee may request that Licensor
contest such challenge and Licensor shall determine how to proceed in Licensor’s
discretion. Except as otherwise set forth in this Agreement, Licensee shall have
sole responsibility for enforcing the Licensee Marks in its discretion and cost
and is entitled to all settlements, damages, costs, attorneys’ fees or other
amounts received from such enforcement efforts. In the course of enforcing or
defending the Licensee Marks, Licensee shall not make any statements, take any
positions or actions, or enter into any agreements that may restrict, narrow,
limit or affect Licensor’s rights to the Licensed Marks. To the extent any
Licensee Mark is used in connection with any of the Licensed Marks, enforcement
and defense of the Licensed Marks is governed by Section 13.2.A(10).

 

  13.7 Assignment of Certain Intellectual Property to Licensee.

A. Effective as of the date of the Spin-Off Transaction, Licensor and/or its
Affiliates will assign, or have assigned, to Licensee certain intellectual
property pursuant to an assignment agreement in the form agreed to by the
parties.

B. Upon the Deflagging of all Projects using a particular Licensed Project Name,
Licensor and/or its Affiliates will assign, or have assigned, to Licensee the
Licensed Project Name and the related Licensed Project Domains applicable to
such Project(s), and upon the termination or expiration of this Agreement,
Licensor and/or its Affiliates will assign, or have assigned, to Licensee all of
the then-existing Licensed Project Names and the related Licensed Project
Domains. Such assignments shall be made pursuant to an assignment agreement in
the form agreed to by the parties at the time of such assignment.

 

  14. CONFIDENTIAL INFORMATION; DATA PROTECTION LAWS

 

  14.1 Confidential Information.

A. Licensee will not, during the Term or thereafter, without Licensor’s prior
consent, which consent may be granted or withheld in Licensor’s sole discretion,
copy, duplicate, record, reproduce, in whole or in part, or otherwise transmit
or make available to any “unauthorized” Person any Licensor Confidential
Information or use the Licensor Confidential Information in any manner not
expressly authorized by this Agreement. Licensee may divulge such Licensor
Confidential Information only to such of Licensee’s employees or agents as
require access to it in order to operate the MVW Ritz-Carlton Business and the
Projects and to comply with Licensee’s obligations under the Transaction
Agreements, and only if such employees or agents are apprised of the
confidential nature of such information before it is divulged to them and they
are bound by confidentiality obligations substantially

 

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similar to those listed above. All other Persons, including, without limitation,
any acquirer or potential acquirer of Licensee, are “unauthorized” for purposes
of this Agreement. Licensee agrees that the Licensor Confidential Information
has commercial value and that Licensor and its Affiliates have taken
commercially reasonable measures to maintain its confidentiality, and, as such,
the Licensor Confidential Information is proprietary and a trade secret of
Licensor and its Affiliates. Licensee will be liable to Licensor for any
breaches of the confidentiality obligations in this Section 14.1.A by its
employees and agents. Licensee will maintain the Licensor Confidential
Information in a safe and secure location and will immediately report to
Licensor the theft or loss of all or any part of the Licensor Confidential
Information.

B. Licensor will not, during the Term or thereafter, without Licensee’s prior
consent, which consent may be granted or withheld in Licensee’s sole discretion,
copy, duplicate, record, reproduce, in whole or in part, or otherwise transmit
or make available to any “unauthorized” Person any Licensee Confidential
Information or use the Licensee Confidential Information in any manner not
expressly authorized by this Agreement. Licensor may divulge such Licensee
Confidential Information only to such of Licensor’s employees or agents as
require access to it in order to comply with its obligations with respect to the
operation of the Projects and the MVW Ritz-Carlton Business and with the
Transaction Agreements, and only if such employees or agents are apprised of the
confidential nature of such information before it is divulged to them and they
are bound by confidentiality obligations substantially similar to those listed
above. All other Persons are “unauthorized” for purposes of this Agreement.
Licensor agrees that the Licensee Confidential Information has commercial value
and that Licensee and its Affiliates have taken commercially reasonable measures
to maintain its confidentiality, and, as such, the Licensee Confidential
Information is proprietary and a trade secret of Licensee and its Affiliates.
Licensor will be liable to Licensee for any breaches of the confidentiality
obligations in this Section 14.1.B by its employees and agents. Licensor will
maintain the Licensee Confidential Information in a safe and secure location and
will immediately report to Licensee the theft or loss of all or any part of the
Licensee Confidential Information.

 

  14.2 Data Protection Laws; Data Security.

A. With respect to the MVW Ritz-Carlton Business, each party will comply with
all applicable Data Protection Laws and the Brand Standards related thereto and
do and execute, or arrange to be done and executed, each act, document and thing
necessary or desirable to keep the other party and its Affiliates in compliance
with any of the Data Protection Laws. Each party shall reimburse the other party
and its Affiliates for any and all costs incurred in connection with the breach
by such party of such Data Protection Laws or the Brand Standards.

B. Without limiting the foregoing, each party shall implement with respect to
the MVW Ritz-Carlton Business reasonable, current security measures to prevent
unauthorized access to data relating to the MVW Ritz-Carlton Business (including
the MVW Ritz-Carlton Business Customer Information) under such party’s control.
Such measures shall in no event be less stringent than (i) those used by such
party to safeguard the Licensee Confidential Information and the Licensee
Intellectual Property (in the case of Licensee) or the Licensor Confidential
Information and the Licensor Intellectual Property (in the case of Licensor) or
(ii) 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.

 

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C. Each party shall secure all Personally Identifiable Information from
unauthorized access, use, disclosure and loss using commercially reasonable
security practices and technologies. If either party becomes aware of a
suspected or actual breach of security involving Personally Identifiable
Information, such party will notify the other party promptly after becoming
aware of such occurrence. For purposes of such notification, Licensee shall
notify Licensor’s Information Protection and Privacy Department at
privacy@ritzcarlton.com and privacy@marriott.com and Licensor shall notify
Licensee’s Information Protection and Privacy Department at
mvciprivacy@vacationclub.com, in either case or such other email addresses as a
party may notify in writing to the other party from time to time.

 

  15. ACCOUNTING AND REPORTS

 

  15.1 Books, Records, and Accounts.

Licensee at its expense will maintain and preserve for at least the period of
time required by Applicable Law, complete and accurate books, records, and
accounts in accordance with United States generally accepted accounting
principles, consistently applied, and Applicable Law, for the MVW Ritz-Carlton
Business, including, without limitation, each sale of an interest in Destination
Club Units and Residential Units and other reasonable information that is
necessary for Licensor to determine whether Licensee is in compliance with this
Agreement. Licensee’s obligation to preserve such books, records and accounts
will survive the expiration or termination of this Agreement.

 

  15.2 Reports.

A. Licensee will, at its expense, submit to Licensor within fifteen (15) days
after the close of each Accounting Period during the Term a statement, in the
form attached hereto as Exhibit D, containing specified sales information for
such Accounting Period with respect to the MVW Ritz-Carlton Business, including
aggregate initial sales relating to Gross Sales Prices, aggregate re-sales
relating to Gross Sales Prices, aggregate initial sales relating to Gross
Commissions, and aggregate re-sales relating to Gross Commissions and the
Project count (showing the number of open and operating Projects and the
corresponding number of Ritz-Carlton Destination Club Units and Ritz-Carlton
Residential Units built and that have a certificate of occupancy) as of the end
of each such Accounting Period.

B. Licensee will, at its expense, submit to Licensor within ninety (90) days
following the end of each calendar year during the Term information regarding
the length of the terms, renewal rights, and expiration dates of Property
Owners’ Association management agreements.

 

  15.3 Licensor Examination and Audit of Licensee’s Records.

A. Licensor and its authorized representatives have the right, at any time (but
not more than once per calendar year, unless an audit reveals an understatement
in such year), upon reasonable notice to Licensee, to: (i) examine all books,
records, and accounts of Licensee for the five (5) years preceding such
examination that relate to support for calculation of the Royalty Fees and other
amounts payable under this Agreement where the calculation of such amount
depends on information provided by Licensee and copy such information that is
reasonably necessary for, and relevant to, such audit; and (ii) have an
independent audit made of any of such books, records, and accounts. Licensee
will provide such other assistance as may be reasonably requested related to the
audit. If an examination or audit reveals that Licensee has made underpayments
to Licensor or any of its Affiliates, Licensee will promptly pay to Licensor or
such Affiliate upon demand the amount underpaid plus interest on the underpaid
amount which will accrue thereon at a rate per annum equal to the Interest Rate
from the date such amount was due until paid. If Licensee in good faith disputes
that there was an underpayment, the parties will review the books and records in
a cooperative manner in an attempt to resolve any discrepancy.

 

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B. If an examination or audit discloses an understatement of payments due to
Licensor of five percent (5%) or more for the period being examined or audited,
or if the examination or audit reveals that the accounting procedures are
insufficient to determine the accuracy of the calculation of any payments due,
Licensee will reimburse Licensor for all reasonable costs and expenses connected
with the examination or audit (including reasonable accounting and lawyers’
fees). If the examination or audit establishes a pattern of underreporting,
Licensor may require that the financial reports due under Section 15.2 be
audited by an internationally recognized independent accounting firm consented
to by Licensor. The foregoing remedies are in addition to any other remedies
that Licensor may have under this Agreement.

C. If an examination or audit reveals that Licensee has made overpayments to
Licensor or any of its Affiliates, Licensor or such Affiliate will promptly pay
to Licensee upon demand the amount overpaid. If Licensor does not pay Licensee
the overpaid amount within thirty (30) days after receiving documentation
evidencing such overpayment reasonably requested by Licensor, Licensor will also
pay interest on the overpaid amount which will accrue thereon at a rate per
annum equal to the Interest Rate from the thirtieth (30th) day following
Licensor’s receipt of such documentation until paid.

D. Licensee acknowledges that, in addition to the audit rights of Licensor as
set forth above, RHL may have certain audit rights with respect to the MVW
Ritz-Carlton Business within the RHL Territory as set forth in the RHL
Agreement, and Licensee agrees comply therewith. Licensor will not agree to an
amendment of the RHL Agreement that would result in RHL having additional audit
rights with respect to the MVW Ritz-Carlton Business within the RHL Territory.

E. To the extent Licensee is required to have access to information that is in
the sole possession of Licensor or its Affiliates for purposes of Licensee’s
compliance obligations with respect to the Sarbanes-Oxley Act of 2002 (or any
successor statute) or for purposes of Licensee’s reporting obligations as a
publicly-traded company or for compliance obligations with respect to the RHL
Agreement, Licensor will cooperate in providing access to the necessary
information that is within Licensor’s or its Affiliates’ control and that
Licensor and its Affiliate is permitted to provide under Applicable Law.

 

  16. INDEMNIFICATION; CONTRIBUTION IN LIEU OF INDEMNIFICATION; AND INSURANCE

 

  16.1 Indemnification.

A. Licensee will, and hereby does, indemnify and defend Licensor and its
Affiliates, their officers, directors, agents and employees, and their
respective successors and assigns, from and against all losses, costs,
liabilities, damages, claims, and expenses of every kind and description with
respect to claims brought by third-parties, including allegations of negligence
by Licensor, its Affiliates, and their respective officers, directors,
employees, and agents (subject to Section 16.1.G.), to the fullest extent
permitted by Applicable Law, and including reasonable lawyers’ fees, arising out
of or resulting from acts or omissions by Licensee or its Affiliates or their
respective officers, directors, agents, or employees involving the following:

(i) the use of any Licensor Intellectual Property in violation of this
Agreement;

(ii) any violation of Applicable Law with respect to the MVW Ritz-Carlton
Business;

 

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(iii) a claim that Licensor or its Affiliates are developers, declarants,
sponsors, or brokers of Ritz-Carlton Destination Club Units or Ritz-Carlton
Residential Units;

(iv) any design, renovation, upgrading, alteration, remodeling, repair or
construction defect claims (in no event shall this provision impact Licensee’s
rights and interest under any insurance policies as provided under other
Transaction Agreements) or claims related to services provided to Members;

(v) claims related to services provided to Members, any claim by any Member
relating to the interests in Destination Club Units or Residential Units, any
claim by any Member relating to any untrue statement or alleged untrue statement
of a material fact contained in the offering materials, or any omission or
alleged omission to state a material fact required to be stated in such offering
materials or necessary to make the statements made therein not misleading;

(vi) the offer or sale of interests in Ritz-Carlton Destination Club Units or
Ritz-Carlton Residential Units, including any disputes or lawsuits arising
therefrom;

(vii) the development, sales, and marketing activities occurring on or after the
date of the Spin-Off Transaction and the operation or servicing of the Projects
or of any other business conducted by Licensee or its Affiliates on, related to,
or in connection with the Projects or the MVW Ritz-Carlton Business;

(viii) the unauthorized use of the Licensed Marks in connection with the offer
and sale of interests in Ritz-Carlton Destination Club Units or Ritz-Carlton
Residential Units (a) in any Unregistered Area and (b) in any jurisdiction where
the Licensed Marks are the subject of Vulnerable Registrations;

(ix) claims made by Members or other customers of the MVW Ritz-Carlton Business
as a result of the termination (other than wrongful termination by Licensor) or
expiration of this Agreement or any rights granted hereunder in accordance
herewith;

(x) infringement, dilution or other claims by third parties in relation to the
Licensee Intellectual Property or for Licensor’s use of Licensee Intellectual
Property that is licensed, or the use of which is consented to, hereunder by
Licensee in accordance with the terms of this Agreement;

(xi) failure to pay Taxes payable by, levied or assessed against Licensee, its
Affiliates, or any Property Owners’ Association by Tax authority relating to the
MVW Ritz-Carlton Business, the Projects, this Agreement, any other Transaction
Agreements or in connection with operating the Projects or the MVW Ritz-Carlton
Business;

(xii) Logoed Merchandise produced by or on behalf of Licensee, and its
Affiliates bearing the Licensed Marks, including without limitation products
claims and claims for infringement, dilution or any other violation of
intellectual property rights or other rights;

(xiii) breach of the obligations with respect to Personally Identifiable
Information or data security under this Agreement and any and all costs and
expenses related to notification of affected individuals and procurement of
credit protection services for such individuals;

 

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(xiv) the infringement of a third party’s intellectual property rights in
connection with the MVW Ritz-Carlton Business, other than with respect to use by
Licensee and its Affiliates of Licensor Intellectual Property that is licensed
hereunder to Licensee in accordance with the terms of this Agreement;

(xv) any claim arising from the operation, ownership or use of the MVW
Ritz-Carlton Business, the Projects or of any other business conducted on,
related to, or in connection with the Projects;

(xvi) failure to operate the Projects in compliance with the terms, conditions,
restrictions, and prohibitions in this Agreement relating the operation of the
Projects as Destination Club Products or as Residential Products; and

(xvii) failure to comply with the terms and conditions of the RHL Agreement as
required by Section 1.E.

B. Licensor will, and hereby does, indemnify and defend Licensee and its
Affiliates, their officers, directors, agents and employees, and their
respective successors and assigns, from and against all losses, costs,
liabilities, damages, claims, and expenses of every kind and description with
respect to claims brought by third-parties, including allegations of negligence
by Licensee, its Affiliates, and their respective officers, directors,
employees, and agents (subject to Section 16.1.G.), to the fullest extent
permitted by Applicable Law, and including reasonable lawyers’ fees, arising out
of or resulting from acts or omissions by Licensor or its Affiliates or their
respective officers, directors, agents, or employees involving the following:

(i) infringement claims by third parties for Licensee’s use of Licensor
Intellectual Property that is licensed hereunder to Licensee in accordance with
the terms of this Agreement, but excluding any Licensor Intellectual Property
that is licensed from, or otherwise provided by, a third party (other than an
Affiliate of Licensor), provided that the use of the Licensor Intellectual
Property is in accordance with the terms and conditions of this Agreement;

(ii) if Licensee and its Affiliates are in compliance with the terms,
conditions, restrictions, and prohibitions in this Agreement relating to the
operation of the Projects as Destination Club Projects or as Residential
Projects, claims by owners, developers, operators, lessees, licensees, or
franchisees of Licensor Lodging Facilities that the conduct of the MVW
Ritz-Carlton Business violates Agreed Territorial Protections;

(iv) a material default under the RHL Agreement by Licensor;

(v) any violation of Applicable Law with respect to the MVW Ritz-Carlton
Business;

(vi) to the extent that Licensor or its Affiliates provide services to customers
of the MVW Ritz-Carlton Business, claims by the customers concerning the
services provided by Licensor or its Affiliates to such customers of the MVW
Ritz-Carlton Business;

(vii) to the extent that Licensor or its Affiliates operate or provide services
to the Projects or operate other businesses at, or in connection with the
Projects or the MVW Ritz-Carlton Business, claims by customers arising directly
out of or based solely on the operation of Projects or services provided by
Licensor or its Affiliates; and

 

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(viii) breach of the obligations with respect to Personally Identifiable
Information or data security under this Agreement and any and all costs and
expenses related to notification of affected individuals and procurement of
credit protection services for such individuals.

Notwithstanding the foregoing, Licensor shall have no liability for any claims
arising out of or relating to:

(x) Licensee’s or its Affiliates’ unauthorized use of the Licensed Marks: (a) in
any Unregistered Area or the Excluded Area; (b) in any jurisdiction where the
Licensed Marks are the subject of Vulnerable Registrations; or (c) in any
jurisdiction where the Licensed Marks have been previously registered or applied
for by third parties or with respect to which there are prior users or prior
conflicting rights held by third parties;

(y) any uses of the Licensed Marks by Licensee or its Affiliates that are not
covered by the trademark registrations for the Licensed Marks held by Licensor
or its Affiliates; or

(z) Logoed Merchandise bearing the Licensed Marks, including without limitation
products claims and claims for infringement, dilution or any other violation of
intellectual property rights.

C. If either party receives notice of any action, suit, proceeding, claim,
demand, inquiry, or investigation for which it is entitled to an indemnity under
Sections 16.1.A. or B., the party receiving notice shall promptly notify the
other party.

D. Unless the parties otherwise agree, within 30 days after an indemnifying
party receives notice of a third-party claim in accordance with Section 16.1.C,
the indemnifying party will defend the third-party claim (and, unless the
indemnifying party has specified any reservations or exceptions, seek to settle
or compromise), at its expense and with its counsel. The indemnitee may, at its
expense, employ separate counsel and participate in (but not control) the
defense, compromise, or settlement of the third-party claim. However, the
indemnifying party will pay the fees and expenses of the indemnitee’s counsel
(a) for any period during which the indemnifying party has not assumed the
defense of the third-party claim (other than for any period in which the
indemnitee did not notify the indemnitee of the third-party claim as required by
Section 16.1.C.) or (b) if the engagement of counsel is as a result of a
conflict of interest, as the indemnitee reasonably determines in good faith.
Notwithstanding the above, if Licensor determines that the matter at issue may
have a material adverse effect on Licensor, the Licensed Marks, or Licensor’s
Lodging Business, then Licensor, through counsel of its choice, may control the
defense or response to any such action, and such undertaking by Licensor will
not, in any manner or form, diminish Licensor’s obligations to Licensee
hereunder. If the matter at issue principally relates to Licensee’s interest in
the MVW Ritz-Carlton Business, Licensor shall allow Licensee through counsel of
its choice to control the defense or response to any such action.

E. Under no circumstances will any indemnitee be required or obligated to seek
recovery from third parties or otherwise mitigate its losses in order to
maintain a claim for indemnification under this Agreement, and the failure to
pursue such recovery or mitigate a loss will in no way reduce the amounts
recoverable from the indemnifying party by the indemnitee.

F. The remedies provided in this Section 16.1 are cumulative and do not preclude
assertion by any indemnitee of any other rights or the seeking of any and all
other remedies against any indemnifying party.

 

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G. (1) Notwithstanding anything to the contrary in Sections 16.1.A or B, if the
third party claim at issue results directly and solely from a breach by the
party seeking indemnification of such party’s obligations under this Agreement,
the Electronic Systems License Agreement, or the Design Review Addendum, then
the party seeking indemnification will not be entitled to indemnification, to
the extent such claim or some or all of claimants’ damages results directly and
solely from such breach. For the avoidance of doubt, (a) a failure by Licensor
to (i) inspect or note in any inspection a deficiency or non-compliance with
Brand Standards by Licensee or its Affiliate or (ii) enforce compliance with any
Brand Standard by Licensee or its Affiliate or (b) any approval by Licensor of
conduct or actions of Licensee or its Affiliate, shall not be deemed a breach
that would limit or otherwise affect Licensee’s obligation to indemnify
Licensor.

(2) Except as may expressly be set forth in this Agreement, none of Licensor or
its Affiliates or Licensee or its Affiliates will in any event have any
liability to the other (including the obligation to indemnify the other party
under this Section 16.1), or to any other Licensor indemnitee or Licensee
indemnitee, as applicable, under this Agreement (a) for claims where either
party or their Affiliates or their respective officers, directors, employees or
agents are found to be solely responsible by a final non-appealable judicial
decision for such damages or losses based upon such person’s or entity’s willful
misconduct or gross negligence or (b) for any indirect, punitive or
consequential damages (other than to the extent the indemnitee is liable for
such damages under a court order issued in connection with a claim).

H. The parties’ obligations under this Section 16.1 will survive the termination
or expiration of this Agreement.

 

  16.2 Insurance Requirements of Licensee.

A. During the Term, Licensee, at its (or the Property Owners’ Associations’)
expense, will procure and maintain (or cause to be procured and maintained) such
insurance as may be required by the terms of any condominium, association, and
trust agreements on each Project or Applicable Law, and no less than the
following:

(1) Property Insurance

(a) Property insurance coverage on each Project as required under the applicable
Project condominium, association, and trust agreements, except to the extent
procured by Licensor under any RCHC Management Agreement. In the event the
applicable Project does not have condominium, association, or trust agreements
or insurance requirements set forth in such agreements, the Project building(s)
and contents shall be insured against loss or damage by fire, lightning, and all
other risks covered by the usual all-risk policy form, all in an amount not less
than the full replacement cost (as such term is customarily used in the
insurance industry) and earthquake, windstorm, flood, and terrorism in
reasonable amounts.

(2) Workers’ compensation insurance in statutory amounts on all employees of
each Project and employer’s liability insurance in amounts not less than
$1,000,000 per accident/disease.

(3) Comprehensive or commercial general liability insurance for any losses
arising from each Project or its operation, with a limit of not less than
$1,000,000 per each occurrence for bodily injury and property damage. If the
general liability coverages contain a general aggregate limit, such limit will
be not less than $2,000,000, and it will apply in total to the applicable
Project only. Such insurance will be on an occurrence policy form and will
include premises and operations, independent

 

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contractors, blanket contractual, products and completed operations, acts of
terrorism, world wide defense and indemnity, advertising injury, employees as
additional insureds, personal injury, incidental medical malpractice,
severability of interests, innkeeper’s and safe deposit box liability, and
explosion, collapse and underground coverage during any construction,
renovation, upgrading and/or remodeling.

(4) Liquor Liability (applicable when alcoholic beverages are distributed, sold,
served, or furnished at the Project) for combined single limits of bodily injury
and property damage of not less than $1,000,000 each occurrence or each “common
cause” and an aggregate of $2,000,000.

(5) Business Auto Liability including owned, non-owned and hired vehicles for
combined single limits of bodily injury and property damage of not less than
$1,000,000 each occurrence.

(6) Umbrella or Excess Liability on a following form in amounts not less than
$200,000,000 in excess of the liability insurance required under subsections
A(2) through (5) immediately above.

(7) Fidelity insurance coverage or a fidelity bond in an amount not less than
$1,000,000 per occurrence.

(8) Employment practices liability insurance in an amount not less than
$1,000,000 per occurrence.

(9) Such other insurance as may be customarily carried by other first class
operators on projects similar to the Projects or as required by Licensor on
similar projects.

B. The following general insurance requirements will be satisfied by Licensee:

(1) All insurance under subsection A(3) through (5) of this Section and
subsection A (6) (if such Umbrella or Excess does not follow form with the
additional insured status in underlying policies in subsection A(3) through
(5) of this Section) will by endorsement specifically name as additional
insureds Licensor, any Affiliate of Licensor designated by Licensor, and their
employees. All insurance required hereunder will be specifically endorsed or
provide that the coverages will be primary and that any insurance carried by any
additional insured will be excess and non-contributory, except as provided under
an RCHC Management Agreement for a particular Project.

(2) Any deductibles or self-insured retentions allocated to any individual
Project by Licensee (excluding deductibles for high hazard risks in high hazard
geological zones, such as flood, earthquake, terrorism and windstorm, which will
be as required by the insurance carrier) will not exceed $50,000, or such higher
amount as may be approved in advance in writing by Licensor.

(3) All insurance purchased in compliance herewith will be placed with insurance
companies of recognized responsibility and reasonably acceptable to Licensor
which acceptance shall not be unreasonably withheld and approved to do business
in the state or country where each Project is located.

(4) All insurance required hereunder will provide if commercially available (if
not available, Licensee shall provide such notice) whereby the policies will not
be canceled, non-renewed, or limits reduced without at least thirty (30) days
prior notice to Licensor. Licensee will deliver to Licensor a certificate of
insurance (or certified copy of such insurance policy if requested by Licensor
in the event of a loss) in English evidencing the coverages required herein.
Renewal certificates of insurance (or certified copies of such insurance policy
if requested by Licensor in a particular jurisdiction) will be delivered to
Licensor not less than ten (10) days prior to their respective inception dates.

 

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(5) All insurance required hereunder may be written under policies of blanket
insurance that cover other properties of Licensee and its Affiliates so long as
such blanket insurance fulfills the requirements herein.

(6) Licensee’s obligation to maintain the insurance hereunder will not relieve
Licensee of its indemnification obligations under Section 16.1.

(7) Should Licensee for any reason fail to procure or maintain the insurance
required by this Agreement or as revised in writing by Licensor, Licensor will
have the right and authority (without however any obligation to do so) to
immediately procure such insurance and to charge the cost thereof to Licensee,
which charges, together with a reasonable fee for Licensor’s expenses in so
acting, will be payable by Licensee immediately upon notice.

 

  16.3 Insurance Required During Construction.

Licensee shall maintain insurance pursuant to the requirements in the Design
Review Addendum at Exhibit G.

 

  16.4 Obligation to Maintain Insurance.

Licensee’s obligation to maintain the insurance hereunder will not relieve
Licensee of its obligations under Sections 16.1. As required by Licensor on
similar projects, Licensor reserves the right to review the insurance coverages
and limits from time to time and require increases or amendments to the
insurance outlined in 16.2 and 16.3 based on competitive terms and conditions in
the jurisdiction where the applicable Project is located. Such requirements
shall be mutually agreed by Licensor and Licensee, but in no event shall the
changes be less than those required by Licensor on similar projects. In the
event Licensor or its Affiliates enter into a RCHC Management Agreement with
Licensee, Licensor or its Affiliates agree to maintain the insurance required to
be procured by Licensor or its Affiliates pursuant to the terms and conditions
of such RCHC Management Agreement, but in no event will the coverage, terms and
amounts be less than those terms and conditions set forth in the RCHC Management
Agreement.

 

  16.5 Contribution.

A. If the indemnification provided for under this Agreement is unavailable, or
insufficient to hold harmless an indemnitee in respect of any indemnified
liability, the indemnifying party will contribute to the amount paid or payable
by the indemnitee as a result of such liabilities. The amount contributed by the
indemnifying party will be in such proportion as reflects the relative fault of
the indemnifying party and the indemnitee in connection with the actions or
omissions resulting in the liability and any other relevant equitable
considerations.

B. The parties agree that any method of allocation of contribution under this
Section 16.5 will take into account the equitable considerations referred to in
Section 16.5.A. The amount paid or payable by an indemnitee to which the
indemnifying party will contribute will be deemed to include any legal or other
expenses reasonably incurred by the indemnitee to investigate any claim or
defend any action. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act of 1933) will be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.

 

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  17. TRANSFERABILITY OF INTERESTS

 

  17.1 Transfers by Licensee.

A. Except as otherwise expressly provided herein, Licensee may not assign this
Agreement or assign or sublicense any of its rights hereunder, or delegate any
of its duties under this Agreement, or sell, transfer or dispose of all or
substantially all of its assets relating to the MVW Ritz-Carlton Business, or
merge or consolidate with any other entity in which Licensee is not the
surviving entity, or engage in a transaction or series of related transactions
that result in a Change in Control without Licensor’s prior written consent
which it may grant or withhold in its sole discretion. Any such Transfer will be
a material default under this Agreement, and Licensor shall be entitled to
enjoin or obtain a court order prohibiting such Transfer without posting a bond.
Licensee shall not make any Transfer to a Specially Designated National or
Blocked Person; provided, however, that so long as the Ownership Interests in
Licensee are publicly-traded on a U.S., nationally-recognized securities
exchange, the purchase of publicly-traded Ownership Interests in Licensee by a
Specially Designated National or Blocked Person shall not be deemed to be a
violation of this sentence. If a Specially Designated National or Blocked Person
acquires a Controlling Interest in Licensee, Licensor shall have the right to
terminate this Agreement immediately upon notice to Licensee.

B. Licensee will have the right to propose bulk sales of inventory of interests
in Ritz-Carlton Destination Club Units and Ritz-Carlton Residential Units,
provided that, if the purchaser of such inventory of interests wishes to use the
Licensed Marks in connection with the re-sale of such interests, the following
conditions must be met: (i) the proposed purchaser is not a Lodging Competitor;
(ii) Licensee has obtained Licensor’s prior written approval of the proposed
purchaser after having received all information reasonably requested by Licensor
that Licensor requires in order to determine if the proposed purchaser meets
Licensor’s qualifications; and (iii) Licensor and the proposed purchaser have
negotiated and entered into a license agreement in form and substance acceptable
to Licensor covering such interests.

 

  17.2 Transfers by Licensor.

A. Except as otherwise expressly provided herein, Licensor may not assign this
Agreement or assign any of its rights hereunder, or delegate any of its duties
under this Agreement; provided, however, that Licensor may Transfer this
Agreement to any Person without prior notice to, or consent of, Licensee,
provided such Person (a) assumes Licensor’s obligations to Licensee under this
Agreement and (b) (i) is an Affiliate of Licensor that has the legal, financial,
and operational ability to perform the obligations of Licensor under this
Agreement or (ii) acquires all or substantially all of Licensor’s rights in
respect of (a) the System, (b) Ritz-Carlton Hotels, and (c) the Branded
Elements. This Agreement will be binding on and inure to the benefit of Licensor
and the successors and assigns of Licensor. If, in connection with such
acquisition of the rights in respect of the System and the Transfer of this
Agreement Licensor retains ownership or control of any of the underlying assets
of the System necessary to perform Licensor’s obligations under this Agreement,
Licensor will continue to provide to Licensee, or to the Person assuming this
Agreement, access to such underlying assets as is necessary to comply with the
terms of this Agreement. If, in connection with such acquisition of the rights
in respect of the System and the Transfer of this Agreement, the components of
the Branded Elements that are used in Ritz-Carlton Hotels are replaced with
different or modified components by the Person assuming this Agreement, then, as
a condition of such acquisition, such Person will be required to provide
Licensee with access to such different or modified components that are
comparable to the corresponding

 

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components of the Branded Elements. Licensor shall not make any Transfer to a
Specially Designated National or Blocked Person; provided, however, that so long
as the Ownership Interests in Licensor are publicly-traded on a U.S.,
nationally-recognized securities exchange, the purchase of publicly-traded
Ownership Interests in Licensor by a Specially Designated National or Blocked
Person shall not be deemed to be a violation of this sentence. If a Specially
Designated National or Blocked Person acquires a Controlling Interest in
Licensor, Licensee shall have the right to terminate this Agreement immediately
upon notice to Licensor.

B. Licensee acknowledges that Licensor and its Affiliates operate as a
multi-national business enterprise. Without limiting Section 17.2.A., Licensor
has the right to Transfer all or part of its rights under this Agreement to any
of Licensor’s Affiliates and, in connection therewith, require Licensee to pay
amounts due under this Agreement to such Affiliates. However, if, as a result of
any such Transfer, Licensee will be liable for greater Tax liability for
payments due hereunder following such Transfer, any resulting increase in Tax
liability shall be borne by Licensor and not by Licensee.

 

  17.3 Proposed Transfers to Lodging Competitors.

Without limiting Section 17.1, no Transfer of any Ownership Interest in
Licensee, any Projects, the MVW Ritz-Carlton Business or any Transaction
Agreement will be made to a Lodging Competitor that results in a Lodging
Competitor obtaining Control of Licensee, the Projects, or the MVW Ritz-Carlton
Business. Any such Transfer will be a material default under this Agreement, and
Licensor shall be entitled to enjoin or obtain a court order prohibiting such
Transfer without posting a bond.

 

  17.4 Comfort Letter and Security Interests in This Agreement.

In connection with any financing benefiting the MVW Ritz-Carlton Business,
Licensee may not assign, mortgage, or grant a security interest in, or pledge as
collateral, this Agreement, except as permitted hereunder. At Licensee’s
request, Licensor hereby agrees to provide to Licensee’s lender a comfort letter
that is substantially similar to the form of comfort letter that has been agreed
to by the parties as of the Effective Date, so long as such lender is not an
Affiliate of Licensee and Licensee is not in breach of any of its obligations
under this Agreement. However, Licensor has no obligation to provide a “comfort
letter” in connection with, or consent to, a transaction that would be
prohibited by this Section 17. If a lender forecloses on, or otherwise exercises
its rights against the assets of the MVW Ritz-Carlton Business, the revenues of
the MVW Ritz-Carlton Business, or such Ownership Interests in Licensee, or
Licensee violates this Section 17., Licensor will have the rights under
Section 18.1. Licensor has no obligation to license a lender or any Person
acting on behalf of a lender, including a receiver or servicer of a loan, to use
the Licensed Marks or the System, unless that obligation arises from a valid and
binding written agreement between Licensor and a lender.

 

  18. BREACH, DEFAULT, AND REMEDIES

 

  18.1 Licensee Project-, Sales Facility-, and Member Service Center-Level
Breaches, Defaults, and Remedies.

A. The Project-, Sales Facility-, and Member Service Center-level breaches
listed in (i) through (viii) below are deemed to be material breaches for which
Licensee may be placed in default with respect to any Project, Sales Facility,
or Member Service Center, as applicable, hereunder if (x) Licensor gives
Licensee notice of the breach that provides the applicable cure period for the
applicable breach (or such greater number of days given by Licensor in its sole
discretion or required by Applicable Law) and (y) Licensee fails to cure the
breach in the time and manner specified in the notice of breach or as
specifically provided in this Section 18.1.A. If Licensee fails to cure the
breach and is placed in default, then Licensor may exercise the applicable
remedy for the specific default as set forth below:

 

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(i) If execution is levied against any Project or Licensee in connection with
such Project in connection with a final, non-appealable judgment for the payment
of an amount in excess of $10,000,000 (as adjusted annually after the Effective
Date by the GDP Deflator), or a suit to foreclose any lien, mortgage, or
security interest (except for foreclosures with respect to consumer financing on
Member interests in Ritz-Carlton Destination Club Units or Ritz-Carlton
Residential Units and except for mechanics liens that are placed on such Project
in the ordinary course of business) on such Project or any property necessary
for the operation of such Project in accordance with Brand Standards, is
initiated and not vacated within ninety (90) days, then Licensor may issue of
notice of breach to Licensee with respect to such Project. Licensee shall have
thirty (30) days following notice of breach to post a bond or provide other
financial assurances reasonably acceptable to Licensor that such Project can
continue to operate as part of the MVW Ritz-Carlton Business in accordance with
this Agreement. If Licensee fails to obtain such bond or provide adequate
financial assurances, then Licensor may issue a notice of default and terminate
Licensee’s rights to operate such Project as part of the MVW Ritz-Carlton
Business immediately upon notice to Licensee and/or exercise any of the other
remedies under Section 18.1.B;

(ii) Except where the failure to meet the applicable thresholds for performance
under the Quality Assurance Audit System at such Project is as a result of
Licensor’s or its Affiliates’ actions or inactions with respect to the provision
of management services or shared services at such Project as contemplated under
Section 11.2.F, if Licensee fails to achieve the thresholds of performance
established by the Quality Assurance Audit System for any Project and such
failure has not been cured within the applicable cure period under the Quality
Assurance Audit System, then Licensor may issue a notice of breach to Licensee
with respect to such Project. Upon such notice of breach, the parties will agree
to a Remediation Arrangement with respect to such failure under the Quality
Assurance Audit System. If Licensee fails to enter into a Remediation
Arrangement within ninety (90) days following the date of the notice of breach
or fails to improve the performance of such Project in accordance with the
Remediation Arrangement, then Licensor may issue a notice of default with
respect to such Project. Licensee shall have thirty (30) days following the
notice of default to enter into an agreement with Licensor in a form reasonably
agreed to by the parties based on Licensor’s then-current Ritz-Carlton Hotel
consensual termination agreement that provides for the orderly removal of such
Project from the System (“System Removal Agreement”) or, if such Project is
controlled by a Non-Controlled Property Owners’ Association whose management
agreement will expire in twenty-four (24) months or less as of the date of the
notice of default, an agreement in a form reasonably agreed to by the parties
that Licensee or its Affiliate, as applicable, will not renew such
Non-Controlled Property Owners’ Association management agreement (“Non-Renewal
Agreement”). If Licensee fails to execute the System Removal Agreement or
Non-Renewal Agreement, as applicable, within such thirty (30) day period for any
reason (including if Licensor and Licensee cannot agree on the terms of the
applicable agreement), then Licensor may terminate Licensee’s rights to operate
such Project as part of the MVW Ritz-Carlton Business immediately upon notice to
Licensee and/or exercise any of the other remedies under Section 18.1.B;

(iii) Except where the failure to meet the applicable Minimum Customer
Satisfaction Score under the Customer Satisfaction System at such Project is as
a result of Licensor’s or its Affiliates’ actions or inactions with respect to
the provision of management services or shared services at such Project as
contemplated under Section 11.2.F, if the overall customer satisfaction score
under the Customer Satisfaction System for any Project is less than the Minimum
Customer Satisfaction Score target for the CSS Measurement Period as set forth
in the Customer Satisfaction System and such failure has not been cured within
the applicable cure period under the Customer Satisfaction System, then Licensor
may issue a notice of breach to Licensee with respect to such Project. Upon such
notice of

 

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breach, the parties will agree to a Remediation Arrangement with respect to such
failure under the Customer Satisfaction System. If Licensee fails to enter into
a Remediation Arrangement within ninety (90) days following the date of the
notice of breach or fails to meet the cure requirements set forth in the
Remediation Arrangement, then Licensor may issue a notice of default with
respect to such Project. Licensee shall have thirty (30) days following the
notice of default to enter into a System Removal Agreement with respect to such
Project or, if such Project is controlled by a Non-Controlled Property Owners’
Association whose management agreement will expire in twenty-four (24) months or
less as of the date of the notice of default, a Non-Renewal Agreement with
respect to such Project. If Licensee fails to execute the System Removal
Agreement or Non-Renewal Agreement, as applicable, within such thirty (30) day
period for any reason (including if Licensor and Licensee cannot agree on the
terms of the applicable agreement), then Licensor may terminate Licensee’s
rights to operate such Project as part of the MVW Ritz-Carlton Business
immediately upon notice to Licensee and/or exercise any of the other remedies
under Section 18.1.B;

(iv) (a) If any Project that is controlled by a Non-Controlled Property Owners’
Association fails to develop, operate, maintain, or renovate such Project in
compliance with this Agreement, the System, and the Brand Standards and Licensee
fails to request that such Non-Controlled Property Owners’ Association cure the
failure or fails to Deflag such Project in accordance with Section 8.5, then
Licensor may issue a notice of breach to Licensee with respect to such Project.
Licensee shall have thirty (30) days following notice of breach to comply with
such requirements of Section 8.5. If Licensee fails to comply with such
requirements of Section 8.5, then Licensor may issue a notice of default and
terminate Licensee’s rights to operate such Project as part of the MVW
Ritz-Carlton Business immediately upon notice to Licensee and/or exercise any of
the other remedies under Section 18.1.B;

(b) If Licensee requests that any Non-Controlled Property Owners’ Association
cure any failure to develop, operate, maintain, or renovate any Project in
accordance with the Brand Standards, the System, and the terms of this Agreement
in accordance with Section 8.5; the Non-Controlled Property Owners’ Association
does not cure such failure; and despite Licensee’s commercially reasonable
efforts, Licensee is unable to promptly Deflag such Project in accordance with
Section 8.5, then Licensor and Licensee shall have thirty (30) days following
notice from Licensor to enter into a System Removal Agreement or a Non-Renewal
Agreement, as applicable. If Licensee fails to execute the System Removal
Agreement or Non-Renewal Agreement, as applicable, within such thirty (30) day
period for any reason (including if Licensor and Licensee cannot agree on the
terms of the applicable agreement), then Licensor may issue a notice of default
and terminate Licensee’s rights to operate such Project as part of the MVW
Ritz-Carlton Business immediately upon notice to Licensee and/or exercise any of
the other remedies under Section 18.1.B;

(v) With respect to any Project that is controlled by Licensee or its Affiliate
or any Controlled Property Owners’ Association, if Licensee, its Affiliate, or
such Controlled Property Owners’ Association fails to develop, operate,
maintain, or renovate such Project in compliance with this Agreement, the
System, and the Brand Standards (whether by failure to provide adequate funds to
comply therewith or otherwise), then Licensor may issue a notice of breach to
Licensee with respect to such Project. Upon such notice of breach, the parties
will agree to a Remediation Arrangement with respect to such failure. If
Licensee fails to enter into a Remediation Arrangement within ninety (90) days
following the date of the notice of breach or fails to cure the breach pursuant
to the Remediation Arrangement, then Licensor may issue a notice of default with
respect to such Project. Licensee shall have thirty (30) days following the
notice of default to enter into a System Removal Agreement. If Licensee fails to
execute the System Removal Agreement within such thirty (30) day period for any
reason (including if Licensor and Licensee cannot agree on the terms of the
System Removal Agreement), then Licensor may terminate Licensee’s rights to
operate such Project as part of the MVW Ritz-Carlton Business immediately upon
notice to Licensee and/or exercise any of the other remedies under
Section 18.1.B;

 

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(vi) If Licensee fails to operate any Sales Facility or Member Service Center in
compliance with this Agreement, the System, or the Brand Standards, then
Licensor may issue a notice of breach with respect to such failure. Upon such
notice of breach, the parties will agree to a Remediation Arrangement with
respect to such failure. If Licensee fails to enter into a Remediation
Arrangement within ninety (90) days following the date of the notice of breach
or fails to cure the breach pursuant to the Remediation Arrangement, Licensor
may issue a notice of default with respect to such Sales Facility or Member
Service Center. Licensee shall have thirty (30) days following notice of default
to enter into an agreement with respect to (i) the change of management
leadership of such Sales Facility (if such default relates to the operational
aspects of such Sales Facility) or Member Service Center in a form agreed to by
the parties, or (ii) the closure of such Sales Facility (if such default relates
to the physical aspects of such Sales Facility) until such default is cured. If
Licensee fails to execute such agreement within such thirty (30) day period for
any reason (including if Licensor and Licensee cannot agree on the terms of such
agreement), then Licensor may require Licensee to close such Sales Facility or
Member Service Center and cease to operate such Sales Facility or Member Service
Center as part of the MVW Ritz-Carlton Business immediately upon notice to
Licensee and/or exercise any of the other remedies under Section 18.1.B;

(vii) Except as permitted under Sections 8.5 and 9.4, if any Project ceases to
operate as a Project under the Licensed Marks or the System, then Licensor may
issue a notice of breach with respect to such Project. Licensee shall have
thirty (30) days following notice of breach to enter into a System Removal
Agreement with respect to such Project. If Licensee fails to execute the System
Removal Agreement within such thirty (30) day period for any reason (including
if Licensor and Licensee cannot agree on the terms of the System Removal
Agreement), then Licensor may issue a notice of default and terminate Licensee’s
rights to operate such Project as part of the MVW Ritz-Carlton Business
immediately upon notice to Licensee and/or exercise any of the other remedies
under Section 18.1.B;

(viii)  (a) If a threat or danger to public health or safety occurs at any
Project, that in the determination of Licensor, could be expected to result in
substantial liability or an adverse effect on such Project, the System, the
Proprietary Marks, or the goodwill associated therewith, then Licensee will
notify Licensor of the threat or danger and Licensee will provide Licensor with
a plan to address such threat or danger in a manner reasonably acceptable to
Licensor, which plan may include proposed arrangements to accommodate guests and
Members at alternative lodging facilities and may require the treatment of
Members differently than transient guests. Depending on the severity of such
threat or danger, Licensor may (i) suspend such Project from the Reservation
System, except for booking of Member usage rights, in accordance with
Section 10.2 until the breach is cured; or (ii) remove such Project from the
System pending resolution of the threat or danger. However, if such Project is
removed from the System under (ii) above, Licensee may request that Licensor
reinstate the rights to operate such Project, and Licensor will thereafter
reinstate such rights, if, within six (6) months after removal of such Project
from the System, the threat or danger to public health or safety is eliminated
and Licensor has determined that such reinstatement would not cause substantial
liability or loss of goodwill;

(b) In the event any such threat or danger to public health or safety occurs and
Licensee fails to notify Licensor thereof or provide the plan to address such
threat or danger acceptable to Licensor in accordance with (a) above, then
Licensor may issue a notice of default and terminate Licensee’s rights to
operate such Project as part of the MVW Ritz-Carlton Business immediately upon
notice to Licensee and/or exercise any of the other remedies under
Section 18.1.B; provided, however, that the reinstatement rights described in
(a) above shall apply upon such termination;

B. Upon any default under Section 18.1.A(i) through (viii) with respect to any
Project, Sales Facility, or Member Service Center, Licensor shall have the right
to pursue any one or more of the following remedies in addition to the remedies
with respect to such Project, Sales Facility, or Member Service Center provided
for in Sections 18.1.A(i) through (viii):

 

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(1) To institute any and all proceedings permitted by Applicable Law or in
equity with respect to such event of default, including, without limitation,
actions for injunctive and/or declaratory relief (including specific
performance) and/or damages. Licensee acknowledges and agrees that, in the event
that Licensor terminates Licensee’s rights to operate such Project, Sales
Facility, or Member Service Center as part of the MVW Ritz-Carlton Business in
accordance herewith, Licensor will have the right to seek and obtain damages as
to such Project, Sales Facility, or Member Service Center with respect to which
the rights to operate hereunder have been terminated;

(2) To suspend Licensee’s right to use the Reservation System, except for
booking of Member usage rights, in accordance with Section 10.2 at such Project
until the breach is cured;

(3) To suspend Licensee’s right to access to and use of information included in
the Brand Loyalty Programs for sales and marketing efforts with respect such
Project or Sales Facility or utilize any other services to be provided by
Licensor or its Affiliates hereunder with respect to such Project or Sales
Facility until the breach is cured; and

(4) To suspend or limit Licensee’s rights to develop new phases of such Project
as determined by Licensor its sole discretion until the breach is cured.

18.2 Licensee Agreement-Level Defaults.

A. The Agreement-level breaches listed in (i) through (xii) below are deemed to
be material breaches for which Licensee may be placed in default under this
Agreement if (x) Licensor gives Licensee notice of the breach that provides the
applicable cure period for the applicable breach (or such greater number of days
given by Licensor in its sole discretion or required by Applicable Law) and
(y) Licensee fails to cure the breach in the time and manner specified in the
notice of breach or as specifically provided in this Section 18.2.A. If Licensee
fails to cure the breach and is placed in default, then Licensor may exercise
the applicable remedy for the specific default as set forth below:

(i) If Licensee or its Affiliates fail to pay any amounts due under this
Agreement to Licensor or any of its Affiliates when the same becomes due and
payable, then Licensor may issue a notice of breach to Licensee with respect to
such failure. Licensee shall have ten (10) business days following notice of
breach to cure the failure to pay. If Licensee in good faith disputes the amount
due and payable and the parties are unable to resolve the discrepancy, then
Licensee shall pay to Licensor the undisputed amount, if any, and Licensee shall
pay the disputed amount into an escrow account. The disagreement regarding the
disputed amount shall be submitted to an arbitration panel for resolution
pursuant to Section 22.4. Notwithstanding anything to the contrary in
Section 22.4, the non-prevailing party shall pay the prevailing party’s costs of
the arbitration, including attorneys’ fees. If the arbitration panel determines
that any or all of the disputed amount is owed to Licensor or its Affiliates,
then Licensee shall pay such amount and may use the amount in the escrow to pay
such amount. If the arbitration panel determines that none of the disputed
amount is owed to Licensor or its Affiliates, then Licensee shall not be
required to pay the disputed amount and the escrowed funds shall be released to
Licensee. If Licensee fails to cure the payment breach, Licensor may issue a
notice of default to Licensee and exercise any of the remedies under
Section 18.2.B., and if the aggregate amount outstanding that Licensee has
failed to pay at any time is in excess of five million dollars ($5,000,000) (as
adjusted annually after the Effective Date by the GDP Deflator), Licensor may
terminate this Agreement and all rights granted to Licensee hereunder
immediately upon notice to Licensee;

 

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(ii) If Licensee or its Affiliates fail to pay any amount in excess of two
million five hundred thousand dollars ($2,500,000) (as adjusted annually after
the Effective Date by the GDP Deflator) due to Licensor or any of its Affiliates
when the same becomes due and payable, in each case, after having been issued a
notice of breach by Licensor and having failed to cure the failure to pay within
ten (10) business days following such notice, three (3) or more times within any
thirty-six (36) month period, Licensor may issue a notice of default and
terminate this Agreement immediately upon notice to Licensee and/or exercise any
of the other remedies under Section 18.2.B.;

(iii) (a) If Licensee or its Affiliates fails to pay when due a total amount in
excess of five million dollars ($5,000,000) (as adjusted annually after the
Effective Date by the GDP Deflator) under the Separation and Distribution
Agreement, under the Tax Sharing and Indemnity Agreement, under the Employee
Benefits Allocation Agreement, under the Marriott License Agreement, or under
all such agreements taken together, then Licensor may issue a notice of breach
to Licensee with respect to such failure. Licensee shall have ten (10) business
days following notice of breach to cure the failure to pay. If Licensee in good
faith disputes the amount due and payable and the parties are unable to resolve
the discrepancy, then Licensee shall pay to Licensor the undisputed amount, if
any, and Licensee shall pay the disputed amount into an escrow account. The
disagreement regarding the disputed amount shall be submitted to an arbitration
panel for resolution pursuant to Section 22.4. Notwithstanding anything to the
contrary in Section 22.4, the non-prevailing party shall pay the prevailing
party’s costs of the arbitration, including attorneys’ fees. If the arbitration
panel determines that any or all of the disputed amount is owed to Licensor or
its Affiliates, then Licensee shall pay such amount and may use the amount in
the escrow to pay such amount. If the arbitration panel determines that none of
the disputed amount is owed to Licensor or its Affiliates, then Licensee shall
not be required to pay the disputed amount and the escrowed funds shall be
released to Licensee. If Licensee fails to cure the payment breach, then
Licensor may issue a notice of default to Licensee and terminate this Agreement
and all rights granted to Licensee hereunder immediately upon notice to Licensee
and/or exercise any of the other remedies under Section 18.2.B;

(b) If Licensor terminates the Marriott License Agreement in accordance with the
terms thereof based on Licensee’s default thereunder, Licensor may issue a
notice of default to Licensee and terminate this Agreement and all rights
granted to Licensee hereunder immediately upon notice to Licensee and/or
exercise any of the other remedies under Section 18.2.B;

(iv) If Licensee or any principal, director, officer, shareholder, or agent of
Licensee, contrary to the provisions of this Agreement, discloses, causes, or
fails to exercise commercially reasonable efforts to prevent the disclosure of,
or otherwise uses in an unauthorized manner, any Licensor Confidential
Information in violation of this Agreement, including Sections 9.1, 9.3, 9.4,
13.2, 13.3, or 14.1.A, then:

(a) Licensor may issue a notice of breach to Licensee. In connection with such
breach, Licensor may, depending on various factors, including, the severity of
the breach, whether the breach was intentional or unintentional, and the damages
or potential damages resulting from such breach, exercise any of the remedies
provided for in Section 18.2.B.

(b) If an arbitration panel under Section 22.4 determines that (i) a material
breach has occurred, (ii) (x) Licensee has failed to exercise commercially
reasonable efforts to prevent such breach or (y) such breach was intentional or
resulted from Licensee’s gross negligence, and (iii) such breach has resulted or
may result in the goodwill associated with the Licensed Marks and System being
so materially damaged as a result of the breach that interim injunctive relief
is an inadequate remedy and that termination of the entire relationship
contemplated by this Agreement is the only adequate remedy, then upon the
rendering of arbitration panel’s determination Licensor may issue a notice of
default to Licensee and terminate this Agreement and all rights granted to
Licensee hereunder and/or exercise any of the other remedies under
Section 18.2.B.

 

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(c) If Licensee violates Sections 9.1.D. or 9.3.B with respect to the use of
Licensor Confidential Information, then Licensor may issue a notice of default
to Licensee and exercise any of the remedies under Section 18.2.B.

(v) Except where the failure to achieve the minimum thresholds for performance
under the Quality Assurance Audit System at such Projects is as a result of
Licensor’s or its Affiliates’ actions or inactions with respect to the provision
of management services or shared services at such Projects as contemplated under
Section 11.2.F, if at any time twenty-five percent (25%) or more of the Projects
are then failing to achieve the minimum thresholds of performance established by
the Quality Assurance Audit System and such failure has not been cured within
the applicable cure period under the Quality Assurance Audit System for such
breach, then Licensor may issue a notice of breach to Licensee. If such breach
has not been cured within one hundred eighty (180) days following such notice of
breach, then Licensor may issue a notice of default to Licensee and terminate
this Agreement and all rights granted to Licensee hereunder immediately upon
notice to Licensee and/or exercise any of the other remedies under
Section 18.2.B;

(vi) Except where the failure to meet the applicable Minimum Customer
Satisfaction Score under the Customer Satisfaction System at such Projects is as
a result of Licensor’s or its Affiliates’ actions or inactions with respect to
the provision of management services or shared services at such Projects as
contemplated under Section 11.2.F, if at any time the average overall guest
satisfaction score under the Customer Satisfaction System for all Projects is
less than the Minimum Customer Satisfaction Score target for the CSS Measurement
Period as set forth in the Customer Satisfaction System and such failure has not
been cured within the applicable cure period under the Customer Satisfaction
System for such breach, then Licensor may issue a notice of breach to Licensee.
If such breach has not been cured within one hundred eighty (180) days following
such notice of breach, then Licensor may issue a notice of default to Licensee
and terminate this Agreement and all rights granted to Licensee hereunder
immediately upon notice to Licensee and/or exercise any of the other remedies
under Section 18.2.B;

(vii) Except where the failure to achieve the applicable Minimum Composite
Customer Satisfaction Score target for on-Project guest experience, Member
service, and sales and marketing under the Customer Satisfaction System at such
Projects is as a result of Licensor’s or its Affiliates’ actions or inactions
with respect to the provision of management services or shared services at such
Projects as contemplated under Section 11.2.F, if at any time the weighted
average overall composite customer satisfaction score for on-Project guest
experience, Member service, and sales and marketing under the Customer
Satisfaction System for all Projects is less than the Minimum Composite Customer
Satisfaction Score target for the CSS Measurement Period as set forth in the
Customer Satisfaction System and such failure has not been cured within the
applicable cure period under the Customer Satisfaction System for such breach,
then Licensor may issue a notice of breach to Licensee. If such breach has not
been cured within one hundred eighty (180) days following such notice of breach,
then Licensor may issue a notice of default to Licensee and terminate this
Agreement and all rights granted to Licensee hereunder immediately upon notice
to Licensee and/or exercise any of the other remedies under Section 18.2.B;

(viii) If Licensee or its Affiliates fail to comply with the Operational Brand
Standards and such failure has, or is reasonably expected to have, a material
adverse effect on Licensor or its Affiliates, then Licensor may issue a notice
of breach with respect to such failure. Upon such notice of breach, the parties
will agree to a Remediation Arrangement with respect to such failure. If
Licensee fails

 

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to enter into a Remediation Arrangement within ninety (90) days following the
date of the notice of breach or fails to cure the breach pursuant to the
Remediation Arrangement, Licensor may issue a notice of default and terminate
this Agreement and all rights granted to Licensee hereunder immediately upon
notice to Licensee and/or exercise any of the other remedies under
Section 18.2.B;

(ix)  (a) If Licensee or any of its Affiliates is convicted of a felony or other
similar crime or offense or engages in a pattern or practice of acts or conduct
that, as a result of the adverse publicity that has occurred in connection with
such offense, acts, or conduct, is likely to have or has had a material adverse
effect on the System, the Proprietary Marks, the goodwill associated therewith
or Licensor’s interests therein, then Licensor may issue a notice of breach and
exercise any of the remedies under Section 18.2.B;

(b) If Licensee or any of its Affiliates is convicted of a felony or other
similar crime or offense or engages in a pattern or practice of acts or conduct
that, as a result of the adverse publicity that has occurred in connection with
such offense, acts, or conduct, has or may result in the goodwill associated
with the Proprietary Marks and System being so materially damaged that
termination of the entire relationship contemplated by this Agreement is the
only adequate remedy, then Licensor may issue a notice of breach. Upon such
notice of breach, the parties will agree to a Remediation Arrangement under
which Licensee will undertake to remedy the breach to Licensor’s satisfaction.
If Licensee fails to enter into a Remediation Arrangement within ninety
(90) days following the date of the notice of breach or fails to cure the breach
pursuant to the Remediation Arrangement, Licensor may issue a notice of default
and terminate this Agreement and all rights granted to Licensee hereunder
immediately upon notice to Licensee and/or exercise any of the other remedies
under Section 18.2.B;

(x) If a Transfer by Licensee or its Affiliates occurs in violation of
Section 17, Licensor may issue a notice of breach. If Licensee fails to notify
Licensor within fourteen (14) days following the notice of breach that Licensee
intends to unwind such Transfer or fails to actually unwind such Transfer in a
manner satisfactory to Licensor within ninety (90) days following the notice of
breach, then Licensor may issue a notice of default and terminate this Agreement
and all rights granted to Licensee hereunder immediately upon notice to Licensee
and/or exercise any of the other remedies under Section 18.2.B; provided,
however, that nothing herein shall restrict or limit Licensor’s ability to seek
injunctive relief to stop such Transfer at any time;

(xi) If Licensee dissolves or liquidates except in connection with a Transfer
permitted by Section 17., Licensor may issue a notice of default and terminate
this Agreement and all rights granted to Licensee hereunder immediately upon
notice to Licensee and/or exercise any of the other remedies under
Section 18.2.B; or

(xii) To the extent permitted by Applicable Law, if Licensee becomes insolvent,
generally does not pay its debts as they become due, or files a voluntary
petition (or consents to an involuntary petition or an involuntary petition is
filed and is not dismissed within sixty (60) days) under any bankruptcy,
insolvency, or similar law, and such bankruptcy or insolvency has a material
adverse effect on Licensee’s operation of the MVW Ritz-Carlton Business or
Licensor or Licensor’s Affiliates, Licensor may issue a notice of default and
terminate this Agreement and all rights granted to Licensee hereunder
immediately upon notice to Licensee and/or exercise any of the other remedies
under Section 18.2.B.

B. Upon any default under Section 18.2.A(i) through (xii), Licensor shall have
the right to pursue any one or more of the following remedies in addition to the
remedies provided for in Sections 18.2.A(i) through (xii):

 

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(1) To institute any and all proceedings permitted by Applicable Law or in
equity with respect to such event of default, including, without limitation,
actions for injunctive and/or declaratory relief (including specific
performance) and/or damages. Licensee acknowledges and agrees that, in the event
that Licensor terminates this Agreement pursuant to a termination right
expressly identified in Section 18.2.A, Licensor will, in addition to the right
to terminate, have the right to seek and obtain damages with respect to the
termination of the Agreement. Licensee agrees that Licensor has devoted
substantial resources to developing and building the MVW Ritz-Carlton Business
(including the Existing Projects, Licensed Marks, and the System) and that the
MVW Ritz-Carlton Business, including the significant reputation and goodwill
associated therewith, has been developed by Licensor over a period of years
prior to the Effective Date. Licensee further acknowledges and agrees that, in
the event Licensor terminates this Agreement as a result of a material event of
default hereunder by Licensee, it would be commercially impossible for Licensor
to take measures to recreate the MVW Ritz-Carlton Business or develop an
equivalent business, and, therefore it would be unreasonable to expect or
require Licensor to mitigate its damages resulting from such default and
termination;

(2) To suspend Licensee’s right to use the Reservation System, except for
booking of Member usage rights, in accordance with Section 10.2 of this
Agreement at any or all Projects or the entire MVW Ritz-Carlton Business until
the breach is cured;

(3) To suspend Licensee’s right to access to and use of information included in
the Brand Loyalty Programs and/or the MVW Ritz-Carlton Business Customer
Information (except for Customer Information related to the Members) for sales
and marketing efforts with respect to any or all Projects or the entire MVW
Ritz-Carlton Business until the breach is cured;

(4) To suspend or limit Licensee’s rights to develop any New Project as
determined by Licensor its sole discretion until the breach is cured; and

(5) To prohibit any New Project from opening or operating under the Licensed
Marks as part of the MVW Ritz-Carlton Business until the breach is cured.

18.3 Licensor Defaults.

A. The breaches listed in (i) through (viii) below are deemed to be material
breaches for which Licensor may be placed in default under this Agreement if
(x) Licensee gives Licensor notice of the breach that provides the applicable
cure period for the applicable breach (or such greater number of days given by
Licensee in its sole discretion or required by Applicable Law) and (y) Licensor
fails to cure the breach in the time and manner specified in the notice of
breach or as specifically provided in this Section 18.3.A. If Licensor fails to
cure the breach and is placed in default, then Licensee may exercise the
applicable remedy for the specific default as set forth below:

(i) If Licensor or its Affiliates fail to pay any amounts due under this
Agreement to Licensee or any of its Affiliates when the same becomes due and
payable, then Licensee may issue a notice of breach to Licensor with respect to
such failure. Licensor shall have ten (10) business days following notice of
breach to cure the failure to pay. If Licensor in good faith disputes the amount
due and payable and the parties are unable to resolve the discrepancy, then
Licensor shall pay to Licensee the undisputed amount, if any, and Licensor shall
pay the disputed amount into an escrow account. The disagreement regarding the
disputed amount shall be submitted to an arbitration panel for resolution
pursuant to Section 22.4. Notwithstanding anything to the contrary in
Section 22.4, the non-prevailing party shall pay the prevailing party’s costs of
the arbitration, including attorneys’ fees. If the arbitration panel determines
that any or all of the disputed amount is owed to Licensee or its Affiliates,
then Licensor shall pay such amount and may use the amount in the escrow to pay
such amount. If the

 

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arbitration panel determines that none of the disputed amount is owed to
Licensee or its Affiliates, then Licensor shall not be required to pay the
disputed amount and the escrowed funds shall be released to Licensor. If
Licensor fails to cure the payment breach, Licensee may issue a notice of
default to Licensor and exercise any of the remedies under Section 18.3.B, and
if the aggregate amount outstanding that Licensor has failed to pay at any time
is in excess of five million dollars ($5,000,000) (as adjusted annually after
the Effective Date by the GDP Deflator), Licensee may terminate this Agreement
immediately upon notice to Licensor;

(ii) If Licensor or its Affiliates fail to pay any amount in excess of two
million five hundred thousand dollars ($2,500,000) (as adjusted annually after
the Effective Date by the GDP Deflator) due to Licensee or any of its Affiliates
when the same becomes due and payable, in each case, after having been issued a
notice of breach by Licensee and having failed to cure the failure to pay within
ten (10) business days following such notice, three (3) or more times within any
thirty-six (36) month period, Licensee may issue a notice of default and
terminate this Agreement immediately upon notice to Licensor and/or exercise any
of the other remedies under Section 18.3.B.;

(iii)  (a) If Licensor or its Affiliates fails to pay when due a total amount in
excess of five million dollars ($5,000,000) (as adjusted annually after the
Effective Date by the GDP Deflator) under the Separation and Distribution
Agreement, under the Tax Sharing and Indemnity Agreement, under the Employee
Benefits Allocation Agreement, under the Marriott License Agreement, or under
all such agreements taken together, then Licensee may issue a notice of breach
to Licensor with respect to such failure. Licensor shall have ten (10) business
days following notice of breach to cure the failure to pay. If Licensor in good
faith disputes the amount due and payable and the parties are unable to resolve
the discrepancy, then Licensor shall pay to Licensee the undisputed amount, if
any, and Licensor shall pay the disputed amount into an escrow account. The
disagreement regarding the disputed amount shall be submitted to an arbitration
panel for resolution pursuant to Section 22.4. Notwithstanding anything to the
contrary in Section 22.4, the non-prevailing party shall pay the prevailing
party’s costs of the arbitration, including attorneys’ fees. If the arbitration
panel determines that any or all of the disputed amount is owed to Licensee or
its Affiliates, then Licensor shall pay such amount and may use the amount in
the escrow to pay such amount. If the arbitration panel determines that none of
the disputed amount is owed to Licensee or its Affiliates, then Licensor shall
not be required to pay the disputed amount and the escrowed funds shall be
released to Licensor. If Licensor fails to cure the payment breach, then
Licensee may issue a notice of default to Licensor and terminate this Agreement
immediately upon notice to Licensor and/or exercise any of the other remedies
under Section 18.3.B.;

(b) If Licensee terminates the Marriott License Agreement in accordance with the
terms thereof based on Licensor’s default thereunder, Licensee may issue a
notice of default to Licensor and terminate this Agreement immediately upon
notice to Licensor and/or exercise any of the other remedies under
Section 18.3.B.

(iv) If Licensor or any principal, director, officer, shareholder, or agent of
Licensor, contrary to the provisions of this Agreement, discloses, causes, or
fails to exercise commercially reasonable efforts to prevent the disclosure of,
or otherwise uses in an unauthorized manner, any Licensee Confidential
Information in violation of this Agreement, including Section 14.1.B., then:

(a) Licensee may issue a notice of breach to Licensor. In connection with such
breach, Licensee may, depending on various factors, including, the severity of
the breach, whether the breach was intentional or unintentional, and the damages
or potential damages resulting from such breach, exercise any of the remedies
provided for in Section 18.3.B.

 

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(b) If an arbitration panel under Section 22.4 determines that (i) a material
breach has occurred, (ii) (x) Licensor has failed to exercise commercially
reasonable efforts to prevent such breach or (y) such breach was intentional or
resulted from Licensor’s gross negligence, and (iii) such breach has resulted or
may result in the goodwill associated with the MVW Ritz-Carlton Business being
so materially damaged as a result of the breach that interim injunctive relief
is an inadequate remedy and that termination of the entire relationship
contemplated by this Agreement is the only adequate remedy, then upon the
rendering of arbitration panel’s determination Licensee may issue a notice of
default to Licensor and terminate this Agreement and/or exercise any of the
other remedies under Section 18.3.B.

(v) If a Transfer by Licensor occurs in violation of Section 17.2, Licensee may
issue a notice of breach. If Licensor fails to notify Licensee within fourteen
(14) days following the notice of breach that Licensor intends to unwind such
Transfer or fails to actually unwind such Transfer in a manner satisfactory to
Licensee within ninety (90) days following the notice of breach, then Licensee
may issue a notice of default and terminate this Agreement immediately upon
notice to Licensor and/or exercise any of the other remedies under
Section 18.3.B; provided, however, that nothing herein shall restrict or limit
Licensee’s ability to seek injunctive relief to stop such Transfer at any time;

(vi) If Licensor dissolves or liquidates, except in connection with a Transfer
permitted by Section 17, Licensee may issue a notice of default and terminate
this Agreement immediately upon notice to Licensor and/or exercise any of the
other remedies under Section 18.3.B;

(vii) To the extent permitted by Applicable Law, if Licensor becomes insolvent,
generally does not pay its debts as they become due, or files a voluntary
petition (or consents to an involuntary petition or an involuntary petition is
filed and is not dismissed within sixty (60) days) under any bankruptcy,
insolvency, or similar law, and such bankruptcy or insolvency has a material
adverse effect on the MVW Ritz-Carlton Business or Licensee or Licensee’s
Affiliates, Licensee may issue a notice of default and terminate this Agreement
immediately upon notice to Licensor and/or exercise any of the other remedies
under Section 18.3.B; and

(viii)  (a) If Licensor or any of its Affiliates is convicted of a felony or
other similar crime or offense and such conviction prevents Licensee from
obtaining or retaining the licenses that it requires to continue operating the
MVW Ritz-Carlton Business at any individual Project(s), then Licensee may issue
a notice of breach and exercise any of the remedies under Section 18.3.B;

(b) If Licensor or any of its Affiliates is convicted of a felony or other
similar crime or offense and such conviction is the actual and sole cause of
Licensee being prevented from obtaining or retaining the licenses that it
requires to continue operating the MVW Ritz-Carlton Business at all or
substantially all of the Projects and the MVW Ritz-Carlton Business is so
materially damaged that termination of the entire relationship contemplated by
this Agreement is the only adequate remedy, then Licensee may issue a notice of
breach. Upon such notice of breach, the parties will agree to a Remediation
Arrangement under which Licensor will undertake to remedy the breach to
Licensee’s satisfaction. If Licensor fails to enter into a Remediation
Arrangement within ninety (90) days following the date of the notice of breach
or fails to cure the breach pursuant to the Remediation Arrangement, Licensee
may issue a notice of default and terminate this Agreement immediately upon
notice to Licensor and/or exercise any of the other remedies under
Section 18.3.B.

B. Upon any default under Section 18.3.A(i) through (viii), Licensee shall have
the right to pursue any one or more of the following remedies in addition to the
remedies provided for in Sections 18.3.A(i) through (viii):

 

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(1) To institute any and all proceedings permitted by Applicable Law or in
equity with respect to such event of default, including, without limitation,
actions for injunctive and/or declaratory relief (including specific
performance) and/or damages. Licensor acknowledges and agrees that, in the event
that Licensee terminates this Agreement pursuant to a termination right
expressly identified in Section 18.3.A, Licensee will, in addition to the right
to terminate, have the right to seek and obtain damages with respect to the
termination of the Agreement; or

(2) To suspend provision of the services that Licensee is required to provide to
Licensor under this Agreement until the breach is cured.

18.4 Other Breaches.

If Licensee or Licensor materially fail to fulfill any of the other material
covenants, undertakings, obligations or conditions set forth in this Agreement,
the Marriott License Agreement, the Electronic Systems License Agreement, or the
Design Review Addendum, except for where specific remedies are identified for
breaches and defaults described in Section 18.1, 18.2 and 18.3, the
non-defaulting party shall have the right to institute any and all proceedings
permitted by Applicable Law or in equity with respect to such failure,
including, without limitation, actions for injunctive and/or declaratory relief
(including specific performance) and/or damages; provided, however, that the
non-defaulting party shall not have the right to terminate this Agreement with
respect to such failure unless it is determined by an arbitration panel under
Section 22.4 that (i) the non-defaulting party has been or will be damaged in an
amount in excess of fifty million dollars ($50,000,000) (as adjusted annually
after the Effective Date by the GDP Deflator) or (ii) the goodwill associated
with the Licensed Marks and System (if Licensor is the non-defaulting party) or
the MVW Ritz-Carlton Business (if Licensee is the non-defaulting party) has been
or will be so materially damaged as a result of the conduct of the defaulting
party that interim injunctive relief is an inadequate remedy and that
termination of the entire relationship contemplated by this Agreement is the
only adequate remedy, in which case the non-defaulting party shall have the
right to terminate this Agreement upon the rendering of arbitration panel’s
determination. The parties acknowledge and agree that, in the event that the
non-defaulting party terminates this Agreement pursuant to this Section 18.4,
the non-defaulting party will, in addition to the right to terminate, have the
right to seek and obtain damages with respect to the termination of the
Agreement.

18.5 Extraordinary Events.

A. If either Licensee’s or Licensor’s failure to conform to, keep, perform,
fulfill, or satisfy any representation, warranty, covenant, undertaking,
obligation, standard, test, or condition set forth in this Agreement with
respect to one or more Projects, Sales Facilities, or Member Service Centers,
other than an obligation to make monetary payments or provide monetary funding,
is caused in whole or in material part by one or more Extraordinary Events, such
failure shall not constitute a failure or a default under this Agreement, and
such failure shall be excused with respect to the subject Projects, Sales
Facilities, or Member Service Centers (but only as to the subject Projects,
Sales Facilities, or Member Service Centers) for as long as the failure is
caused in whole or in part by such Extraordinary Event(s) and so long as cure is
diligently pursued.

B. If either Licensee’s or Licensor’s failure to conform to, keep, perform,
fulfill, or satisfy a material obligation set forth in this Agreement that
affects all or substantially all of the services to be provided under this
Agreement or that has a material adverse effect on the MVW Ritz-Carlton Business
as a whole, other than an obligation to make monetary payments or provide
monetary funding, is caused in whole or in material part by one or more
Extraordinary Events, such failure shall not constitute a failure or a default
under this Agreement, and such failure shall be excused for as long as the
failure is caused in whole or in part by such Extraordinary Event(s) and so long
as cure is diligently pursued.

 

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19. POST-TERMINATION OBLIGATIONS; DE-IDENTIFICATION

19.1 Project De-Identification and Post-Termination Obligations.

A. Upon termination of Licensee’s rights to operate one or more (but not all) of
the Ritz-Carlton Destination Club Projects under the System, all rights to
operate the subject Ritz-Carlton Destination Club Project under the System shall
terminate, and the subject Ritz-Carlton Destination Club Project shall be
Deflagged. In connection with the Deflagging:

(i) the Deflagged Destination Club Project may continue to be included in the
inventory of the Licensed Non-Site Specific Destination Club Program as a usage
option for Members, but must be clearly identified as a non-Ritz-Carlton product
in all of Licensee’s distribution channels. Licensee will notify all Members
upon the Deflagging pursuant to a form of notice agreed to by the parties that
the Deflagged Destination Club Project in no longer affiliated with the System
and is no longer a Ritz-Carlton Destination Club Project.

(ii) Members who own interests in the Destination Club Units at the subject
Deflagged Destination Club Project other than through a Non-Site Specific
Destination Club Program, if any, will lose their right to participate in the
Licensed Non-Site Specific Destination Club Program, and will no longer be
permitted to trade usage rights in such interests for points under the Brand
Loyalty Program. Such Members may, however, continue to elect to enroll such
interests in the Licensed Non-Site Specific Destination Club Program in exchange
for usage rights in the Licensed Non-Site Specific Destination Club Program and
trade such usage rights for points under the Brand Loyalty Program.

(iii) Members who own interests in Destination Club Units at the subject
Deflagged Destination Club Project through a Licensed Non-Site Specific
Destination Club Program may continue to trade usage rights in such interests
for points under the Brand Loyalty Program.

(iv) Interests in Destination Club Units at the subject Deflagged Destination
Club Project that are not part of a Licensed Non-Site Specific Destination Club
Program shall no longer be sold under, or in association with, the Licensed
Marks or any other aspect of the System, or made part of a Licensed Non-Site
Specific Destination Club Program.

(v) Interests in Destination Club Units in phases of the Deflagged Destination
Club Project that were already part of a Licensed Non-Site Specific Destination
Club Program at the time of the Deflagging may, however, continue to be sold for
use in the Licensed Non-Site Specific Destination Club Program, but interests in
new phases of the Deflagged Destination Club Project shall not be made part of a
Licensed Non-Site Specific Destination Club Program and shall not be sold as
part of a Licensed Non-Site Specific Destination Club Program.

(vi) Inventory for transient rental at the Deflagged Destination Club Project
will no longer be listed on ritzcarlton.com, and stays at the Deflagged
Destination Club Project will not be deemed a “Ritz-Carlton” stay for purposes
of the Brand Loyalty Program.

B. Upon termination of Licensee’s rights to operate one or more (but not all) of
the Projects under the System and except as otherwise provided in
Section 19.1.A., all rights to operate the subject Project under the System will
immediately terminate, including the rights to use the Electronic Systems, the
Licensed Marks, the Licensor Intellectual Property, and the Branded Elements
with respect to the subject Project, and the parties will comply with their
respective obligations described below:

 

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(1) Licensee will not represent that the subject Project is or was in any way
connected with the System and will fully comply with Section 13.2.A(4), other
than as required Applicable Law.

(2) Licensor will not represent that the subject Project is or was in any way
connected with the System, other than as required by Applicable Law.

(3) Licensee at its expense will promptly remove any items using the Licensor
Intellectual Property from or in connection with the subject Project (except MVW
Ritz-Carlton Business Customer Information relating to Members of the subject
Project that Licensee is permitted to retain and use under Section 19.2(7)) and
perform such additional actions as set forth in any de-identification list
Licensor provides to Licensee to ensure that the subject Project is not
connected with the System and is not using any Licensor Intellectual Property.
Licensee agrees that Licensor or its designated agent may enter upon the
premises of any subject Project at any time to make such changes at Licensee’s
sole risk and expense and without liability for trespass, if Licensee has not
done so within ten (10) days after termination of Licensee’s rights to operate
the subject Project under the System (provided, however, that such period shall
be extended for a reasonable period with respect to any de-identification
activities that cannot be completed within such period (e.g., removal of
monument signage)).

(4) Each party will promptly pay all amounts owing to the other party and any of
its Affiliates related to the subject Project.

(5) Licensor at its expense will promptly perform such reasonable additional
actions as set forth in any de-identification list Licensee provides to Licensor
to ensure that Licensor is not connected with the subject Project.

C. Upon discontinuation of Licensee’s rights to include a Non-Site Specific
Destination Club Ownership Vehicle as part of a Licensed Non-Site Specific
Destination Club Program pursuant to Section 5.2.F., all rights to operate the
subject Non-Site Specific Destination Club Ownership Vehicle under the System
shall terminate, and the subject Non-Site Specific Destination Club Ownership
Vehicle shall be Deflagged. In connection with the Deflagging:

(i) Interests in the Deflagged Non-Site Specific Destination Club Ownership
Vehicle shall no longer be sold under, or included in or associated with, the
Licensed Marks or any other aspect of the System, or be included in a Licensed
Non-Site Specific Destination Club Program.

(ii) Members who own interests in the subject Deflagged Non-Site Specific
Destination Club Ownership Vehicle will no longer have any right to participate
in the Licensed Non-Site Specific Destination Club Program, and will no longer
be permitted to trade usage rights in such interests for points under the Brand
Loyalty Program.

(iii) Upon the Deflagging, Licensee will notify all Members who own interests in
the subject Deflagged Non-Site Specific Destination Club Ownership Vehicle
pursuant to a form of notice agreed to by the parties that the Deflagged
Non-Site Specific Destination Club Ownership Vehicle in no longer affiliated
with the System and is no longer part of a Licensed Non-Site Specific
Destination Club Program.

 

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(iv) The subject Deflagged Non-Site Specific Destination Club Ownership Vehicle
may continue to hold interests in Ritz-Carlton Destination Club Units that it
holds at the time of Deflagging, however, Licensee shall not, without Licensor’s
prior consent in Licensor’s sole discretion, add interests in Ritz-Carlton
Destination Club Units to the subject Deflagged Non-Site Specific Destination
Club Ownership Vehicle subsequent to such Deflagging, unless such interests were
committed to be included in the subject Deflagged Non-Site Specific Destination
Club Ownership Vehicle prior to the time of Deflagging.

(v) Licensee may continue to include interests in the Deflagged Non-Site
Specific Destination Club Ownership Vehicle as an external Exchange Program
usage option for Members of the Ritz-Carlton Destination Club Business, provided
that such Deflagged Non-Site Specific Destination Club Ownership Vehicle is
clearly identified as a non-Ritz-Carlton product in all of Licensee’s
distribution channels.

19.2 Agreement De-Identification and Post-Termination Obligations.

Upon expiration or other termination of this Agreement, all rights granted under
this Agreement to Licensee to operate the Projects under the System will
immediately terminate, including the rights under this Agreement to use the
Electronic Systems, the Licensed Marks, the Licensor Intellectual Property, and
the Branded Elements, and the parties will comply with their respective
obligations described below:

(1) Licensee will not represent that the Ritz-Carlton Destination Club Business,
the Ritz-Carlton Whole Ownership Residential Business or any of the Projects are
in any way connected with the System or hold itself out as a licensee or former
licensee of Licensor or its Affiliates were formerly known by any corporate name
or trade name containing the Licensed Marks, other than as required by
Applicable Law.

(2) Licensor will not represent that any of the Projects are in any way
connected with the System or hold itself out as a licensor or former licensor of
Licensee, other than as required Applicable Law.

(3) Licensee at its expense will promptly remove any items using the Licensor
Intellectual Property from or in connection with the Projects (except for the
MVW Ritz-Carlton Business Customer Information relating to Members of the
Projects that Licensee is permitted to retain and use under Section 19.2(7)) and
perform such additional actions as set forth in any de-identification list
Licensor provides to Licensee to ensure that Licensee is not connected with the
System and is not using any Licensor Intellectual Property. Licensee agrees that
Licensor or its designated agent may enter upon the premises of any Project at
any time to make such changes at Licensee’s sole risk and expense and without
liability for trespass, if Licensee has not done so within ten (10) days after
expiration or termination of this Agreement (provided, however, that such period
shall be extended for a reasonable period with respect to any de-identification
activities that cannot be completed within such period (e.g., removal of
monument signage)).

(4) Licensor at its expense will promptly remove any items using the Licensee
Intellectual Property from or in connection with any Licensor Lodging Facilities
or any other businesses of Licensor and its Affiliates (except that Licensee
shall be responsible for removing any Sales Facilities located at Licensor
Lodging Facilities at Licensee’s expense) and perform such additional actions as
set forth in any de-identification list Licensee provides to Licensor to ensure
that Licensor is not connected with the Projects or the Destination Club
Business or Whole Ownership Residential Business of Licensee and its Affiliates
and is not using any Licensee Intellectual Property.

 

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(5) Licensee will immediately turn over to Licensor all copies of any Licensor
Confidential Information, Licensor Intellectual Property, and all other System
materials relating to the operation of the MVW Ritz-Carlton Business and the
Projects (except for the MVW Ritz-Carlton Business Customer Information relating
to Members of the Projects that Licensee is permitted to retain and use under
Section 19.2(7)), all of which are acknowledged by Licensee to be Licensor’s
property. Licensee will not retain a copy or record of any of the foregoing,
except for Licensee’s copy of this Agreement, any correspondence between the
parties, and any other documents that Licensee reasonably needs for compliance
with any provisions of Applicable Law. If Licensor expressly permits Licensee to
continue to use any Licensor Intellectual Property after the termination or
expiration date, such use by Licensee will be in accordance with the terms of
this Agreement.

(6) Licensor will immediately turn over to Licensee all copies of any Licensee
Confidential Information, Licensee Intellectual Property, and all other
materials relating to the operation of the Projects, all of which are
acknowledged by Licensor to be Licensee’s property. Licensor will not retain a
copy or record of any of the foregoing, except for Licensor’s copy of this
Agreement, any correspondence between the parties, and any other documents that
Licensor reasonably needs for compliance with any provisions of Applicable Law.
If Licensee expressly permits Licensor to continue to use any Licensee
Intellectual Property after the termination or expiration date, such use by
Licensor will be in accordance with the terms of this Agreement.

(7) Licensee may retain MVW Ritz-Carlton Business Customer Information only for
the purposes of servicing the Members of the Ritz-Carlton Destination Club
Projects and the residents of the Ritz-Carlton Residential Projects in existence
at the end of the Term. Licensee shall have the right to use the name, address,
telephone number, e-mail address, and other contact information with respect to
those Members in the same manner and form as Customer Information of other
customers of the Destination Club Business or the Whole Ownership Residential
Business generally is used. Licensee shall not use that portion of the MVW
Ritz-Carlton Business Customer Information with respect to those Members that
includes or relates to those Members’ participation in the Brand Loyalty Program
in any way, shape, or form to identify or otherwise to market to those Members
Destination Club Products, Residential Units, or a Lodging Business of Licensee,
its Affiliates, or any other third party. Licensee shall at all times comply
with the confidentiality provisions of this Agreement with respect to such MVW
Ritz-Carlton Business Customer Information.

(8) Each party will promptly pay all amounts owing to the other party and any of
its Affiliates under this Agreement.

19.3 Survival.

The rights and obligations of the parties under this Section 19 will survive
termination or expiration of this Agreement.

20. COMPLIANCE WITH LAWS; LEGAL ACTIONS

20.1 Compliance with Laws.

A. The parties will comply with all Applicable Laws in connection with the
fulfillment of their respective obligations under this Agreement. Licensee will
forward to Licensor within a reasonable period of time (not to exceed ten
(10) business days) following Licensee’s receipt copies of all inspection
reports, warnings, certificates, and ratings issued by any governmental entity
related to any Project or the MVW Ritz-Carlton Business that identify a material
failure to meet or maintain governmental standards regarding health or life
safety or any other material violation of Applicable Law that may materially and
adversely affect the operation of any Project or adversely affect the MVW
Ritz-Carlton Business or Licensee.

 

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B. Each party will, if required by Applicable Law, timely file, register, or
report this Agreement or the payments to be made hereunder, as applicable, to
the appropriate governmental authorities having jurisdiction over any Project,
the MVW Ritz-Carlton Business or this Agreement, and pay all costs and expenses
related thereto.

20.2 Notice Regarding Legal Actions.

Licensee and Licensor will each notify the other (i) within a reasonable period
of time (not to exceed ten (10) business days) after the applicable party has
actual knowledge of the commencement of any material action, suit, or other
proceeding that involves any Project or the MVW Ritz-Carlton Business that could
have a material adverse effect on the Project or the MVW Ritz-Carlton Business
or with respect to which the amount in controversy exceeds five million dollars
($5,000,000) (as adjusted annually after the Effective Date by the GDP
Deflator); or Licensor’s or Licensee’s relationship with any Project, the MVW
Ritz-Carlton Business or the System, and (ii) within a reasonable period of time
(not to exceed ten (10) business days) after the issuance of any judgment,
order, writ, injunction, award, or other decree of any court, agency, or other
governmental instrumentality that may materially adversely affect the operation
or financial condition of any Project, Licensor or Licensee. Nothing in this
Section 20.2, however, will abrogate any notice requirement that Licensor or
Licensee may have under any insurance program or contract.

20.3 Block Exemption.

Licensor and Licensee acknowledge and agree that the license is granted on the
assumption that this Agreement complies, and will continue to comply, with the
European Commission’s Block Exemption Regulation for Vertical Agreements (EU
No. 330/2010) (the “Regulation”) and with Article 101 of the Treaty on the
Functioning of the European Union (“Article 101”) and with the official
interpretative guidelines of 2010, and any successor to the Regulation and to
the guidelines. If, at any time, questions arise concerning this Agreement’s
compliance with the Regulation, the parties agree to use their best efforts and
to cooperate with each other to amend this Agreement either to bring it into
conformity with the requirements of the Regulation or to seek an alternative way
to comply with Article 101. If, in Licensor’s sole judgment, this Agreement
cannot be modified to comply with Article 101, including the Regulation, without
undermining material elements of the license relationship, Licensor may, at its
option, without liability for such action or any further obligation to Licensee,
terminate the provisions of this Agreement and the license upon thirty
(30) days’ notice to Licensee as to the portions of the Agreement or Territory
that violate the Regulation. To the extent that the post-termination obligations
described in Section 19 of this Agreement would be applicable, Licensee and its
Affiliates will comply with such obligations.

21. RELATIONSHIP OF PARTIES

21.1 Reasonable Business Judgment.

Unless Licensor has reserved “sole discretion,” Licensor will use its reasonable
business judgment when discharging its obligations or exercising its rights or
discretion under this Agreement. Licensee agrees that Licensor, in the exercise
of its reasonable business judgment, may act with the intention to benefit the
System and Licensor’s business as a whole, and not individual Licensor Lodging
Facilities or other facilities, including the Projects. Licensee will have the
burden of establishing that Licensor failed to exercise reasonable business
judgment, and neither the fact that Licensor benefited

 

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economically from an action nor the existence of other “reasonable” or
“commercially reasonable” alternatives will, by themselves, imply such a
failure. To the extent that any implied covenant, such as the implied covenant
of good faith and fair dealing, or civil law duty of good faith is applied to
this Agreement, Licensor and Licensee intend that Licensor will not have
violated such covenant or duty if Licensor has exercised reasonable business
judgment.

21.2 Independent Contractor.

A. This Agreement does not create a fiduciary relationship between Licensor and
Licensee. Licensee and Licensor are independent contractors, and nothing in this
Agreement is intended to constitute either party as an agent, legal
representative, subsidiary, joint venturer, partner, manager, employee, or
servant of the other for any purpose, except that Licensor may act on Licensee’s
behalf as Licensee’s agent for purposes of booking reservations at any Project.

B. Nothing in this Agreement authorizes either party to make any contract,
agreement, warranty, or representation on the other party’s behalf or to incur
any debt or other obligation in the other party’s name.

22. GOVERNING LAW; INJUNCTIVE RELIEF; COSTS OF ENFORCEMENT; ARBITRATION; AND
EXPERT RESOLUTION

22.1 Governing Law; Venue.

A. This Agreement is executed pursuant to, and will be interpreted and construed
under the laws of New York, without regard to the conflict of laws provisions of
such jurisdiction. Nothing in this Section 22.1 is intended to invoke the
application of any franchise, business opportunity, antitrust, “implied
covenant,” unfair competition, fiduciary or any other doctrine of law of the
State of New York or any other state which would not otherwise apply absent this
Section 22.1.

B. Each party hereby expressly and irrevocably submits itself to the
non-exclusive jurisdiction of the courts of New York for the purpose of
resolving any Dispute under Section 22.2. So far as is permitted under the laws
of New York, this consent to personal jurisdiction will be self-operative.

22.2 Injunctive Relief.

A. Licensor will be entitled to injunctive or other equitable relief from a
court of competent jurisdiction, without the necessity of proving the inadequacy
of money damages as a remedy or irreparable harm, without the necessity of
posting a bond, and without waiving any other rights or remedies at law or in
equity, for any actual or threatened material breach or violation of this
Agreement for which such relief is an available remedy, the Brand Standards
(including, but not limited to, threats or danger to public health or safety) or
actual or threatened misuse or misappropriation of the Licensor Intellectual
Property or Licensor Confidential Information. The rights conferred by this
Section 22.2.A expressly include, without limitation, Licensor’s entitlement to
affirmative injunctive, declaratory, and other equitable or judicial relief
(including specific performance) for Licensee’s failure to operate any portion
of the MVW Ritz-Carlton Business in accordance with the applicable Brand
Standards, including, without limitation, affirmative relief that any such
deficiencies are cured and thereafter meet the Brand Standards.

B. Licensee will be entitled to injunctive or other equitable relief from a
court of competent jurisdiction, without the necessity of proving the inadequacy
of money damages as a remedy or irreparable harm, without the necessity of
posting a bond, and without waiving any other rights or

 

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remedies at law or in equity, for any actual or threatened material breach or
violation of this Agreement for which such relief is an available remedy or
actual or threatened misuse or misappropriation of the Licensee Intellectual
Property or Licensee Confidential Information.

22.3 Costs of Enforcement.

If for any reason it becomes necessary for either party to initiate any legal or
equitable action to secure or protect its rights under this Agreement, the
prevailing party will be entitled to recover all costs incurred by it in
successfully enforcing such rights, including reasonable lawyers’ fees.

22.4 Arbitration.

A. Except as otherwise specified in this Agreement, any Dispute or any other
matter concerning any aspect of the relationship of the parties will be finally
settled, by arbitration administered by the American Arbitration Association
under its Commercial Arbitration Rules, except as modified herein (the “AAA
Rules”), conducted in Washington, DC.

B. There will be three (3) arbitrators. If there are only two (2) parties to the
arbitration, each of Licensor and Licensee will appoint one (1) arbitrator
within twenty (20) days after receipt by respondent of a copy of the demand for
arbitration. For purposes of this Section 22.4, Licensor and its Affiliates, on
one hand, and Licensee and its Affiliates, on the other hand, will each be
deemed to be one (1) party. The two (2) party-appointed arbitrators will have
twenty (20) days from the appointment of the second (2nd) arbitrator to agree on
a third (3rd) arbitrator who will chair the arbitral tribunal. Any arbitrator
not timely appointed by the parties under this Section 22.4.B. will be appointed
in accordance with AAA Rule R.11, and in any such procedure, each party will be
given a limited number of strikes, excluding strikes for cause.

C. Any Dispute to be settled by arbitration under this Section 22.4 will at the
request of Licensor or Licensee be resolved in a single arbitration before a
single tribunal together with any Dispute arising out of or relating to this
Agreement or any other agreement (including any other Transaction Agreements)
between or among Licensee, Guarantor and their respective Affiliates on the one
hand and Licensor or its Affiliates on the other. If there are multiple
claimants and/or multiple respondents to the effect that there are more than two
(2) parties to the arbitration, all claimants and/or all respondents will
attempt to agree upon their respective appointments. If such multiple parties
fail to nominate an arbitrator within thirty (30) days, the AAA will appoint an
arbitrator on their behalf. In such circumstances, any existing nomination of
the arbitrator chosen by the party or parties on the other side of the proposed
arbitration will be unaffected, and the remaining arbitrators will be appointed
in accordance with AAA Rules R. 12 and R. 13.

D. Any controversy concerning whether a Dispute is an arbitrable Dispute,
whether arbitration has been waived, whether an assignee of this Agreement is
bound to arbitrate, or as to the interpretation or enforceability of this
Section 22.4 will be determined by the arbitrators.

E. The decision of the arbitral tribunal will be final and binding upon the
parties, and such decision will be enforceable through any courts having
jurisdiction. The arbitral tribunal will have no authority to amend or modify
the terms of this Agreement. The arbitral tribunal may award or include in their
award any relief they deem proper in the circumstances, including money damages
(with Interest on unpaid amounts from the date due), specific performance and
legal fees and costs in accordance with this Agreement; however, the arbitral
tribunal may not award special, punitive, consequential or exemplary damages.
The costs and expenses of arbitration will be allocated and paid by the parties
as determined by the arbitral tribunal. The arbitral tribunal will have the
authority to make such orders granting interim or provisional relief during the
pendency of the arbitration as it deems just and equitable. Any such order will
be without prejudice to the final determination of the controversy.

 

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F. The parties will use their reasonable best efforts to encourage the
arbitrators to resolve any arbitration related to any Dispute as promptly as
practicable. Subject to Applicable Law, including disclosure or reporting
requirements, or the parties’ agreement, the parties will maintain the
confidentiality of the arbitration. Unless agreed to by all the parties or
required by Applicable Law, including disclosure or reporting requirements, the
arbitrators and the parties will maintain the confidentiality of all
information, records, reports, or other documents obtained in the course of the
arbitration, and of all awards, orders, or other arbitral decisions rendered by
the arbitrators.

G. Any arbitration proceeding under this Agreement will be conducted on an
individual (not a class-wide) basis and will not be consolidated with any other
arbitration proceedings to which Licensor is a party, except as specified below.
No decision on any matter in any other arbitration proceeding in which Licensor
is a party will prevent any party to the arbitration proceeding from submitting
evidence with respect to the same or a similar matter or prevent the arbitral
tribunal from rendering an independent decision without regard to such decision
in such other arbitration proceeding.

H. Each party may, without waiving any rights it has under this Agreement, seek
from a court having jurisdiction any interim or provisional relief that may be
necessary to protect its rights or property.

I. The provisions of this Section 22.4 will survive the expiration or
termination of this Agreement.

22.5. Expert Resolution.

Where this Agreement calls for a matter to be referred to Expert(s) for
determination, the following provisions shall apply.

A. The use of Expert(s) shall be the exclusive remedy of the parties and neither
party shall attempt to adjudicate any dispute in any other forum. The decision
of Expert(s) shall be final and binding on the parties and shall not be capable
of challenge, whether by arbitration, in court or otherwise. In the event there
is more than one (1) Expert, then the decision of Experts shall be determined by
a majority vote. Recognition and enforcement of any decision or award rendered
by the Expert(s) may be sought in any court of competent jurisdiction.

B. If either party calls for a determination by Expert(s) in accordance with the
terms of this Agreement, the parties shall have ten (10) days from the date of
such request to agree upon and appoint an Expert and, if they fail to agree,
each party shall have an additional ten (10) days to make its respective
selection of an Expert, and within ten (10) days of such respective selections,
the two (2) respective Experts so selected shall select a third (3rd) Expert. If
either party fails to make its respective selection of an Expert within the
specified period, then the other party’s selection shall be the Expert. If the
two (2) respective Experts selected by the parties fail to select a third
(3rd) Expert, then the third Expert shall be appointed by the American
Arbitration Association. Any dispute to be determined by the Expert pursuant to
this Section shall, at the request of either party, be resolved in a single
Expert proceeding before the same Expert(s) together with any dispute to be
determined by an Expert arising out of or relating to this Agreement.

 

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C. Each party shall be entitled to make written submissions to the Expert(s),
and if a party makes any submission, it shall also provide a copy to the other
party(ies) and the other party(ies) shall have the right to comment on such
submission within the time periods established pursuant to Section 22.5.E.
During the period beginning with the appointment of an Expert or the appointment
of three (3) Experts pursuant to Section 22.5.B and continuing until an Expert
determination is rendered, neither party shall communicate with any of the
Experts regarding the subject matter submitted for determination without
disclosing the content of any such communication to the other party. The parties
shall make available to the Expert(s) such books and records relating to the
issue in dispute and shall render to the Expert(s) any assistance requested of
the parties. The costs of the Expert(s) and the proceedings shall be borne as
directed by the Expert(s) unless otherwise provided for herein.

D. The Expert(s) shall decide the matter referred for determination by applying
the terms, conditions and standards set forth in this Agreement regarding such
matter.

E. The terms of engagement of the Expert(s) shall include an obligation on the
part of the Expert(s) to: (i) notify the parties in writing of the decision
within thirty (30) business days (ninety (90) days for matters referred to
Expert determination under Section 2.5.C) from the date on which the Expert (or
last Expert, if there are three (3)) has been selected (or such other period as
the parties may agree or as set forth herein); and (ii) establish a timetable
for the making of submissions and replies.

22.6 Waiver of Jury Trial and Punitive Damages.

Each party hereby absolutely, irrevocably and unconditionally waives trial by
jury and the right to claim or receive special, consequential, punitive or
exemplary damages arising out of, pertaining to or in any way associated with
the covenants, undertakings, representations or warranties set forth in this
Agreement, the relationships of the parties hereto, this Agreement or any other
Transaction Agreement.

23. NOTICES.

23.1 Notices.

A. Subject to Section 23.1.B, all notices, requests, demands, statements, and
other communications required or permitted to be given under the terms of this
Agreement will be in writing, in the English language, and delivered by hand
against receipt or carried by reputable overnight/international courier service,
to the respective party at the following addresses:

To Licensor:

The Ritz-Carlton Hotel Company, L.L.C.

4445 Willard Avenue, Suite 800

Chevy Chase, MD 20815

United States of America

Attn: President and Chief Operations Officer

Telephone: (1) (301) 547-4822

With a copies to:

The Ritz-Carlton Hotel Company, L.L.C.

4445 Willard Avenue, Suite 800

Chevy Chase, MD 20815

United States of America

Attn: Deputy General Counsel and Corporate Secretary

Telephone: (1) (301) 547-4879

 

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and

Marriott International, Inc.

10400 Fernwood Road

Bethesda, Maryland 20817

United States of America

Attn: General Counsel

Telephone: (1) (301) 380-8326

To Licensee:

Marriott Vacations Worldwide Corporation

6649 Westwood Blvd.

Suite 500

Orlando, Florida 32821

United States of America

Attn: President and Chief Executive Officer

Telephone: (1) (407) 206-6000

With a copy to:

Marriott Vacations Worldwide Corporation

6649 Westwood Blvd.

Suite 500

Orlando, Florida 32821

United States of America

Attn: General Counsel

Telephone: (1) 407-206-6000

or at such other address as designated by notice from the respective party to
the other party. Any such notice or communication will be deemed to have been
given at the date and time of: (i) receipt or first refusal of delivery if
delivered by hand; or (ii) two days after the posting thereof if sent via
reputable overnight/international courier service.

B. Each party may provide the other party with routine information, invoices,
Brand Standards and other System requirements and programs, such as the Quality
Assurance Program, including any modifications thereto, by regular mail or by
e-mail, facsimile, or by making such information available to the other party on
the Internet, an extranet, or other electronic means.

24. CONSTRUCTION AND SEVERABILITY; APPROVALS, CONSENTS AND WAIVERS; ENTIRE
AGREEMENT

24.1 Construction and Severability.

A. Except as expressly provided to the contrary in this Agreement, each section,
part, term and/or provision of this Agreement, including Section 16.1, will be
considered severable; and if, for any reason any section, part, term, or
provision is determined to be invalid, unenforceable or contrary to, or in
conflict with, any existing or future Applicable Law or by an arbitral tribunal,
a court or agency having valid jurisdiction, such will not impair the operation
of, or have any other effect upon, such other sections, parts, terms, and
provisions of this Agreement as may remain otherwise intelligible, and

 

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the latter will continue to be given full force and effect and bind Licensor and
Licensee. To the extent possible, such invalid or unenforceable sections, parts,
terms, or provisions will be deemed to be replaced with a provision that is
valid and enforceable and most nearly reflects the original intent of the
invalid or unenforceable provision.

B. No right or remedy conferred upon or reserved to Licensor or Licensee by this
Agreement is intended to be, nor will be deemed, exclusive of any other right or
remedy herein or by law or equity provided or permitted, but each will be
cumulative of every other right or remedy.

C. When this Agreement provides that either party may take or refrain from
taking any action or exercise discretion, such as rights of approval or consent,
or to modify any part of the Brand Standards or System, or to make other
determinations or modifications under this Agreement, such party may do so from
time to time.

D. Unless otherwise stated, references to Sections are to Sections of this
Agreement.

E. Unless otherwise stated, references to Exhibits, Attachments or Addenda are
to Exhibits, Attachments and Addenda to this Agreement, and all of such are
incorporated by reference into this Agreement.

F. Words importing the singular include the plural and vice versa as the context
may imply. Words importing a gender include each gender as the context may
imply.

G. Unless otherwise stated, references to days, months, and years are to
calendar days, calendar months, and calendar years, respectively.

H. The words “include,” “included” and “including” will be terms of enlargement
or example (meaning that, for instance, “including” will be read as “including
but not limited to”) and will not imply any restriction or limitation unless the
context clearly requires otherwise.

I. Captions and section headings are used for convenience only. They are not
part of this Agreement and will not be used in construing it.

J. The Recitals are incorporated in and made part of this Agreement.

24.2 Approvals, Consents and Waivers.

Except as otherwise provided in this Agreement, approvals, designations, and
consents required under this Agreement will not be effective unless evidenced by
a writing signed by the duly authorized officer or agent of the party giving
such approval or consent. No waiver, delay, omission, or forbearance on the part
of Licensor or Licensee to exercise any right, option or power arising from any
default or breach by the other party, or to insist upon strict compliance by the
other party with any obligation or condition hereunder, will affect or impair
the rights of Licensor or Licensee, respectively, with respect to any such
default or breach or subsequent default or breach of the same or of a different
kind. Any delay or omission of either party to exercise any right arising from
any such default or breach will not affect or impair such party’s rights with
respect to such default or breach or any future default or breach. No party will
be liable to the other party for providing (or denying) any waiver, approval,
consent, or suggestion to the other party in connection with this Agreement or
by reason of any delay or denial of any request.

 

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24.3 Entire Agreement.

As of the date of this Agreement, this Agreement, including all exhibits,
attachments, and addenda, and the Transaction Agreements contain the entire
agreement between the parties as it relates to the MVW Ritz-Carlton Business and
the Projects. This is a fully integrated agreement.

24.4 Amendments.

No agreement of any kind relating to the matters covered by this Agreement will
be binding upon either party unless and until the same has been made in a
written, non-electronic instrument that has been duly executed by the
non-electronic signature of all interested parties. This Agreement may only be
amended in a written, non-electronic instrument that has been duly executed by
the non-electronic signature of all interested parties and may not be amended or
modified by conduct manifesting assent, or by electronic signature, and each
party is hereby put on notice that any individual purporting to amend or modify
this Agreement by conduct manifesting assent or by electronic signature is not
authorized to do so.

25. REPRESENTATIONS, WARRANTIES AND COVENANTS

25.1 Existence and Power; Authorization; Contravention.

A. Each party represents, warrants and covenants that: (i) it is a legal entity
duly formed, validly existing, and in good standing under the laws of the
jurisdiction of its formation; (ii) it and its Affiliates have and will continue
to have the ability to perform its obligations under this Agreement; and
(iii) it has and will continue to have all necessary power and authority to
execute and deliver this Agreement.

B. Each party represents, warrants and covenants that the execution and delivery
of this Agreement and the performance by such party of its obligations
hereunder: (i) have been duly authorized by all necessary action; (ii) do not
require the consent, vote, or approval of any third parties (including lenders)
except for such consents as have been properly obtained; and (iii) do not and
will not contravene, violate, result in a breach of, or constitute a default
under (a) its certificate of formation, operating agreement, articles of
incorporation, by-laws, or other governing documents, (b) any Applicable Law; or
(c) any agreement, indenture, contract, commitment, restriction or other
instrument to which it or any of its Affiliates is a party or by which it or any
of its Affiliates is bound.

C. Each party represents and warrants that all information provided in
connection with this Agreement, are true, correct and complete as of the time
made and as of the Effective Date, regardless of whether such representations
and warranties were provided by such party, one of its Affiliates, or by a third
party on behalf of such party, unless such party has notified the other party of
a change in the representations and warranties or the information and such other
party has approved the change.

25.2 Acknowledgements and Representations Regarding Territorial Restrictions in
Existing Contracts.

The parties acknowledge that each party may, as of the Effective Date, be
parties to agreements with third parties that contain territorial restrictions,
including the Permitted Territorial Restrictions, that would be a breach of this
Agreement if either party had agreed to such territorial restrictions without
the consent of the other party during the Term. The parties represent and agree
that those existing territorial restrictions shall, in no event, be deemed a
breach hereof, and that each party will be bound by such territorial
restrictions to the extent that such territorial restrictions are applicable to
them.

 

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26. MISCELLANEOUS

26.1 Translations.

The English language version of all written materials, including this Agreement,
the Brand Standards, the Software, any other documents, forms, agreements,
manuals, and advertising materials provided to either party under this Agreement
will be the version used for determining the intent of the parties. Either party
may translate any such materials into any other language. All translations will
be at the sole cost and expense of the translating party. Ownership of any
translated materials shall vest in the party who owned the materials from which
the translation was made, and all copyrights in any such translated materials
will be assigned by translating party to the owning party or its designated
Affiliate upon the owning party’s request. The translating party will obtain any
necessary agreement with any translator that such translation will be the sole
property of the owning party or its Affiliates.

26.2 Multiple Counterparts.

This Agreement may be executed in a number of identical counterparts, each of
which will be deemed an original for all purposes and all of which will
constitute, collectively, one agreement. Delivery of an executed signature page
to this Agreement by electronic transmission will be effective as delivery of a
manually signed counterpart of this Agreement.

26.3 Failure to Close the Spin-Off Transaction.

Notwithstanding anything to the contrary in this Agreement, if the Spin-Off
Transaction fails to close on or before March 31, 2012, either party may
terminate this Agreement immediately upon notice to the other party and neither
party will have any liability to the other in connection with such termination.

27. RCHC MANAGED PROJECTS

27.1 Provisions of this Agreement That Do Not Apply to RCHC Managed Projects.

The parties acknowledge and agree that, notwithstanding anything to the contrary
in this Agreement, the following provisions do not apply to the RCHC Managed
Projects (but continue to apply to other Projects) since no license is being
granted to Licensee with respect to the on-site operation of the RCHC Managed
Projects under the Licensed Marks or System and that, to the extent these
matters are covered in the applicable RCHC Management Agreement, the applicable
provisions of such RCHC Management Agreement will govern such matters:

(i) Section 3.4(ii) regarding Licensee’s obligation to pay Travel Expenses for
Licensor’s or its Affiliates’ representatives visiting the Projects for
re-inspection following any failed inspection conducted under the Quality
Assurance System.

(ii) Section 5.1.B. regarding operational sublicenses for Existing Projects;

(iii) Section 5.2.D. regarding development and operational sublicenses for New
Projects;

 

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(iv) Section 5.2.E. regarding regulatory compliance with respect to sublicenses
for Existing Projects and New Projects;

(v) Section 5.8.A. regarding delegation of recreational functions at Projects;

(vi) Section 12. regarding repairs and maintenance;

(vii) Section 16.1.A(xvi) regarding Licensee’s indemnification of Licensor for
failure to operate the Projects in compliance with the terms, conditions,
restrictions, and prohibitions in this Agreement; and

(viii) Sections 18.1.A(i), (ii), (iii), (vii), and (viii), regarding
Project-level breaches, defaults, and remedies.

27.2 Provisions of this Agreement That Are Modified With Respect to the RCHC
Managed Projects.

The parties acknowledge and agree that the following provisions are hereby
modified solely for the purposes of their application to the RCHC Managed
Projects (but not with respect to other Projects) since no license is being
granted to Licensee with respect to the on-site operation of the RCHC Managed
Projects under the Licensed Marks or System, and these modified provisions will
control with respect RCHC Managed Projects. The modified provisions set forth
below are substantially similar to the corresponding provisions set forth in
Sections 1. through 26. and in Exhibit A, except that (a) references to
operation of the RCHC Managed Projects or Project-level operational functions
have been deleted; (b) the concepts that Licensee is not being granted any
license with respect to on-site operation of the RCHC Managed Projects and that
the RCHC Managed Projects are operated under RCHC Management Agreements have
been incorporated; and (c) certain internal section references have been
modified.

(i) The parties acknowledge that certain of the fees and charges contemplated
Sections 3.2, 3.3. and 3.4. and Section 11 may be paid under the RCHC Management
Agreement. To the extent that such fees and charges are not paid under the RCHC
Management Agreement, they will be paid under this Agreement pursuant to the
terms hereof.

(ii) Sections 3.8.B. and C. shall be modified as follows:

“B. Licensee and its Affiliates must promptly pay when due all Taxes levied or
assessed against Licensee and its Affiliates by any Tax authority relating to
the Projects and the MVW Ritz-Carlton Business, Licensee, its Affiliates, this
Agreement, the Payment Obligations, or in connection with the operation of the
MVW Ritz-Carlton Business.

C. Subject to Section 3.8.D., Licensor and its Affiliates must promptly pay when
due all Taxes levied or assessed against Licensor and its Affiliates by any Tax
authority relating to the Projects and the MVW Ritz-Carlton Business, Licensor,
its Affiliates, this Agreement, the Payment Obligations, or in connection with
the operation of the MVW Ritz-Carlton Business.”

(iii) Section 4.2.A(ii) shall be modified as follows:

 

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“(ii) For a “tail period” of thirty (30) years following the end of the Initial
Term (if Licensee does not exercise its right to obtain an Extension Term), the
first Extension Term (if Licensee does not exercise its right to obtain a second
Extension Term), or the second Extension Term, as applicable (but not following
any termination of this Agreement under Section 18), Licensee shall be entitled
(but not required) to continue to operate the MVW Ritz-Carlton Business
(including with respect to any New Projects under development as contemplated in
(y) below) in the Territory (provided, however, Licensee shall have no right
(subject to Section 13.1.E.) to use the Licensed Marks or the System in the
Excluded Area and shall not have the right to any indemnity under
Section 16.1.B. with respect to third-party claims resulting from Licensee’s or
its Affiliates’ use of the Licensed Marks or the System in the Excluded Area,
and any third-party claim related to the use of the Licensed Marks or the System
in the Excluded Area shall be subject to indemnification by Licensee pursuant to
Section 16.1.A.), provided that such operation is in compliance with the terms
and conditions of this Agreement. The parties agree that (x) the exclusivity
granted in Section 1.A. and the restrictions and limitations on Licensor and its
Affiliates in Section 2.2 shall immediately cease and be of no further force or
effect as of the first day of the tail period and (y) Licensee shall have no
right to propose New Projects during the tail period (but will have the right to
continue and complete the development of any New Projects that have been
approved by Licensor pursuant to this Agreement prior to the commencement of the
tail period). All other applicable terms and conditions of this Agreement,
including, without limitation, the requirement to pay the Royalty Fees and other
amounts under Sections 3 and 11, shall remain in place and be applicable during
the tail period.”

(iv) Section 5.1.A. shall be modified as follows:

“A. The Existing Projects are listed on Exhibit B to this Agreement. The
Existing Projects will continue to be operated under the System and Brand
Standards in accordance with the terms and conditions of the applicable RCHC
Management Agreement. Each Existing Project may operate only under the
applicable Project name set forth in Exhibit B, which Project name may be
changed only in accordance with the naming protocol set forth in the Brand
Standards.”

(v) The first sentence of Section 5.2.G. shall be modified as follows:

“All New Projects that are added to Licensed Non-Site Specific Destination Club
Programs must initially be operated under the Licensed Marks in accordance with
the System and the applicable RCHC Management Agreement, it being acknowledged
that such New Projects are subject to being Deflagged in accordance with the
terms of this Agreement and the applicable RCHC Management Agreement.”

 

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(vi) Section 7.1.A. shall be modified as follows:

“A. Licensee shall comply with the Brand Standards in all matters with respect
to the operation of the MVW Ritz-Carlton Business, including, without
limitation, the following to the extent each relates to the MVW Ritz-Carlton
Business: the use of the Licensed Marks; the provision of Member services;
employee training; the development, construction, and equipping of all
Ritz-Carlton Destination Club Projects and Ritz-Carlton Residential Projects;
and all sales and marketing activities.”

(vii) Section 8.1 shall be modified as follows:

“8.1 Operating the MVW Ritz-Carlton Business.

Licensee will operate the MVW Ritz-Carlton Business in compliance with this
Agreement, the System, and the Brand Standards, subject to Applicable Law, and
Licensee will:

(1) permit the duly authorized representatives of Licensor to enter facilities
utilized by Licensee in the MVW Ritz-Carlton Business (including the Sales
Facilities) and inspect such facilities at all reasonable times to confirm that
Licensee is complying with the terms of this Agreement, the System, and the
Brand Standards. Licensor has no duty or obligation to conduct ongoing
inspections of the facilities utilized by Licensee in the MVW Ritz-Carlton
Business;

(2) with respect to transient rentals for overnight accommodation at Projects
offered or made through the Reservation System, participate in travel agent
programs, Brand Loyalty Programs, and any complaint resolution programs as
Licensor may establish in its discretion, all to the extent applicable to the
MVW Ritz-Carlton Business.”

(viii) Section 8.2 shall be modified as follows:

“8.2 Employees.

Licensee will employ suitably qualified individuals sufficient to staff all
positions with respect to the MVW Ritz-Carlton Business. Licensee will use its
best efforts to ensure that Licensee’s employees at all times comply with the
Brand Standards.”

 

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(ix) Section 8.3.C. shall be modified as follows:

“C. Subject to Sections 8.3.A. and B. and any limitations in the RHL Agreement,
Licensor acknowledges that (i) certain functions of Projects may be delegated or
subcontracted to third-parties in accordance with Section 5.8 and (ii) certain
aspects of certain Projects may be subject to shared service and integrated
facility arrangements with co-located lodging properties and other facilities.”

(x) Section 8.4.B. shall be modified as follows:

“B. Licensee has provided to Licensor, and Licensor has reviewed and consented
to, the form of Quality Assurance Audit System. Licensee shall administer the
Quality Assurance Audit System, using Licensee’s Quality Assurance System as of
the Effective Date, as it may be subsequently modified in accordance with
Sections 7.2.B, C, D or F. Licensor shall conduct audits of each Project under
the Quality Assurance Audit System no less than annually, unless Licensee
consents to a longer period in writing. Licensee shall pay all costs for such
Quality Assurance Audit System.”

(xi) Section 8.5 shall be modified as follows:

“8.5 Projects Controlled by Non-Controlled Property Owners’ Association.

If any Project that is controlled by a Non-Controlled Property Owners’
Association fails to develop the Project in compliance with this Agreement, the
System, or the Brand Standards (whether by failure to provide adequate funds to
comply therewith or otherwise), Licensee shall promptly request that the
Non-Controlled Property Owners’ Association cure the failure (i) for Existing
Projects, within the applicable cure periods set forth in the agreements
governing such Existing Project (or any longer period required by Applicable
Law) or (ii) for New Projects, within the shorter of (x) the applicable cure
periods set forth in Section 18 or (y) the applicable cure periods set forth in
the agreements governing such New Project (or any longer period required by
Applicable Law), after notice of the failure, provided, that if the failure is
not susceptible of being cured within the applicable period, Licensee shall have
the right to extend such period for such additional period as is reasonable
under the circumstances if cure is being diligently pursued, and, in no event,
will such additional period be more than three hundred sixty five (365) days. If
the Non-Controlled Property Owners’ Association does not cure such failure
within the applicable cure period, Licensee shall promptly issue default notices
to the Non-Controlled Property Owners’ Association and promptly take such
actions as are required to Deflag the Project

 

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in accordance with the agreements governing such Project or as otherwise
required by Applicable Law. If the Non-Controlled Property Owners’ Association
cures such failure prior to Deflagging in accordance with any cure rights
provided in the agreements governing such Project or Applicable Law, Licensee
will have the right to cease Deflagging the Project and maintain the Project as
part of the MVW Ritz-Carlton Business.”

(xii) Section 9.4 shall be modified as follows:

“9.4 Destination Club Businesses and Whole Ownership Residential Businesses
Operating Under Other Brands.

“Subject to Sections 9.3 and 13.2.A(4), Licensee may engage in a Destination
Club Business and a Whole Ownership Residential Business under or in connection
with brands other than the Licensed Marks, provided that no Existing Projects
may be operated except under the Licensed Marks unless: (i) such Existing
Project is removed from the System by Licensee in good faith for failure of a
Non-Controlled Property Owners’ Association to comply with the management
agreement (whether by failure to provide adequate funds to maintain the Brand
Standards or otherwise), or if Licensee makes a commercially reasonable
determination (and Licensor agrees with such determination) that such project no
longer adequately represents the then-current Ritz-Carlton Destination Club
Project or Ritz-Carlton Residential Project, as applicable, brand positioning;
(ii) a Non-Controlled Property Owners’ Association terminates its management
agreement with Licensee or its Affiliate or refuses to renew the management
agreement on the then-current terms and conditions; or (iii) Licensor terminates
the right for such Existing Project to be operated in accordance with this
Agreement. A Project is removed from the System for purposes of this Section 9.4
when no customer-facing sales assets or facilities that contain or display any
of the Licensor Intellectual Property are used by Licensee at or for such
Project (including phone numbers, websites, domain names, screen names, social
networking names, email addresses, and customer information) and no Branded
Elements or Licensor Intellectual Property (including any corporate name
containing the word “Ritz-Carlton”) are used to promote, market or sell any
other product or service at or for the Project. Licensee’s failure to comply
with subsections 9.4(i) through (iii) shall be a default under this Agreement
and will result in Licensee failing to have met the conditions precedent to
converting the Project to another brand.”

(xiii) Section 16.1.A(vii) shall be modified as follows:

“(vii) the development, sales, and marketing activities occurring on or after
the date of the Spin-Off Transaction and the operation or servicing of any
business conducted by Licensee or its Affiliates related to or in connection
with the MVW Ritz-Carlton Business;”

 

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(xiv) Section 16.1.A(xi) shall be modified as follows:

“(xi) failure to pay Taxes payable by, levied or assessed against Licensee, its
Affiliates, or any Property Owners’ Association by any Tax authority relating to
the MVW Ritz-Carlton Business, the Projects, this Agreement, any other
Transaction Agreements or in connection with operating the MVW Ritz-Carlton
Business;”

(xv) Section 16.1.A(xv) shall be modified as follows:

“(xv) any claim arising from the operation, ownership or use of the MVW
Ritz-Carlton Business;”

(xvi) The first paragraph of Section 18.1.A. shall be modified as follows:

“A. The Project-, Sales Facility-, and Member Service Center-level breaches
listed in (i) through (iii) below are deemed to be material breaches for which
Licensee may be placed in default with respect to any Project, Sales Facility,
or Member Service Center, as applicable, hereunder if (x) Licensor gives
Licensee notice of the breach that provides the applicable cure period for the
applicable breach (or such greater number of days given by Licensor in its sole
discretion or required by Applicable Law) and (y) Licensee fails to cure the
breach in the time and manner specified in the notice of breach or as
specifically provided in this Section 18.1.A. If Licensee fails to cure the
breach and is placed in default, then Licensor may exercise the applicable
remedy for the specific default as set forth below:”

(xvii) Sections 18.1.A(iv), (v), and (vi) shall be re-lettered as Sections
18.1.A(i), (ii), and (iii), and Sections 18.1.A(i) and (ii) shall be modified as
follows:

“(i)    (a) If any Project that is controlled by a Non-Controlled Property
Owners’ Association fails to develop such Project in compliance with this
Agreement, the System, and the Brand Standards and Licensee fails to request
that such Non-Controlled Property Owners’ Association cure the failure or fails
to Deflag such Project in accordance with Section 8.5, then Licensor may issue a
notice of breach to Licensee with respect to such Project. Licensee shall have
thirty (30) days following notice of breach to comply with such requirements of
Section 8.5. If Licensee fails to comply with such requirements of Section 8.5,
then Licensor may issue a notice of default and terminate Licensee’s rights to
develop such Project as part of the MVW Ritz-Carlton Business immediately upon
notice to Licensee and/or exercise any of the other remedies under
Section 18.1.B;

 

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(b) If Licensee requests that any Non-Controlled Property Owners’ Association
cure any failure to develop any Project in accordance with the Brand Standards,
the System, and the terms of this Agreement in accordance with Section 8.5; the
Non-Controlled Property Owners’ Association does not cure such failure; and
despite Licensee’s commercially reasonable efforts, Licensee is unable to
promptly Deflag such Project in accordance with Section 8.5, then Licensor and
Licensee shall have thirty (30) days following notice from Licensor to enter
into a System Removal Agreement or a Non-Renewal Agreement, as applicable. If
Licensee fails to execute the System Removal Agreement or Non-Renewal Agreement,
as applicable, within such thirty (30) day period for any reason (including if
Licensor and Licensee cannot agree on the terms of the applicable agreement),
then Licensor may issue a notice of default and terminate Licensee’s rights to
develop such Project as part of the MVW Ritz-Carlton Business immediately upon
notice to Licensee and/or exercise any of the other remedies under
Section 18.1.B;

(ii) With respect to any Project that is controlled by Licensee or its Affiliate
or any Controlled Property Owners’ Association, if Licensee, its Affiliate, or
such Controlled Property Owners’ Association fails to develop such Project in
compliance with this Agreement, the System, and the Brand Standards (whether by
failure to provide adequate funds to comply therewith or otherwise), then
Licensor may issue a notice of breach to Licensee with respect to such Project.
Upon such notice of breach, the parties will agree to a Remediation Arrangement
with respect to such failure. If Licensee fails to enter into a Remediation
Arrangement within ninety (90) days following the date of the notice of breach
or fails to cure the breach pursuant to the Remediation Arrangement, then
Licensor may issue a notice of default with respect to such Project. Licensee
shall have thirty (30) days following the notice of default to enter into a
System Removal Agreement. If Licensee fails to execute the System Removal
Agreement within such thirty (30) day period for any reason (including if
Licensor and Licensee cannot agree on the terms of the System Removal
Agreement), then Licensor may terminate Licensee’s rights to develop such
Project as part of the MVW Ritz-Carlton Business immediately upon notice to
Licensee and/or exercise any of the other remedies under Section 18.1.B;”

(xviii) The first paragraph of Section 18.1.B. shall be modified as follows:

“B. Upon any default under Section 18.1.A(i) through (iii) with respect to any
Project, Sales Facility, or Member Service Center, Licensor shall have the right
to pursue any one or more of the following remedies in addition to the remedies
with respect to such Project, Sales Facility, or Member Service Center provided
for in Sections 18.1.A(i) through (iii):”

 

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(xix) The first paragraph of Section 19.1.A. shall be modified as follows:

“A. In connection with the Deflagging of one or more (but not all) of the
Ritz-Carlton Destination Club Projects:”

(xx) The first paragraph of Section 19.1.B. shall be modified as follows:

“A. In connection with the Deflagging of one or more (but not all) of the
Projects and except as otherwise provided in Section 19.1.A:”

(xxi) The first paragraph of Section 19.2. shall be modified as follows:

“Upon expiration or other termination of this Agreement, all rights granted
under this Agreement to Licensee with respect to the operation of the Projects
under the System will immediately terminate, including the rights under this
Agreement with respect to the use of the Electronic Systems, the Licensed Marks,
the Licensor Intellectual Property, and the Branded Elements, and the parties
will comply with their respective obligations described below:”

(xxii) Notwithstanding anything to the contrary therein, the following
definitions from Exhibit A shall be supplemented as follows:

(a) For purposes of the use of the terms “Destination Club Business” and “Whole
Ownership Residential Business” in Section 1.A., the definition of “Destination
Club Business” shall not include the on-site operation of Destination Club
Projects, the amenities of Destination Club Projects (e.g., country clubs, spas,
golf courses, food and beverage outlets, gift and sundry shops, etc.) located at
or in the general vicinity of Destination Club Projects, Destination Club
Products, or Destination Club Units, and the definition of “Whole Ownership
Residential Business” shall not include the on-site operation of Residential
Projects, the amenities of Residential Projects (e.g., country clubs, spas, golf
courses, food and beverage outlets, gift and sundry shops, etc.) located at or
in the general vicinity of Residential Projects, or Residential Units.

(b) The definition of “New Projects” shall not include the on-site operation of
Ritz-Carlton Destination Club Projects or Ritz-Carlton Residential Projects.

(c) The definition of “Ritz-Carlton Destination Club Business” shall not include
the on-site operation of Ritz-Carlton Destination Club Projects, Ritz-Carlton
Destination Club Products, or Ritz-Carlton Destination Club Units.

 

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(d) The definitions of “Ritz-Carlton Destination Club Products”, “Ritz-Carlton
Destination Club Projects”, and “Ritz-Carlton Destination Club Units” will not
be construed as granting Licensee or its Affiliates any rights with respect to
on-site operation of Ritz-Carlton Products, Ritz-Carlton Destination Club
Projects, or Ritz-Carlton Destination Club Units.

(e) The definition of “Ritz-Carlton Whole Ownership Residential Business” shall
not include the on-site operation of Ritz-Carlton Residential Projects or
Ritz-Carlton Residential Units.

(f) The definitions of “Ritz-Carlton Residential Projects” and “Ritz-Carlton
Residential Units” will not be construed as granting Licensee or its Affiliates
any rights with respect to on-site operation of Ritz-Carlton Residential
Projects or Ritz-Carlton Residential Units.

27.3 Provisions of this Agreement Applicable to Non-RCHC Managed Projects and
RCHC Managed Projects.

A. The provisions of this Agreement except for Sections 27.1 and 27.2, including
all Exhibits hereto, shall apply to the Non-RCHC Managed Projects as written and
without reference to Sections 27.1 or 27.2.

B. All provisions of this Agreement not deleted or modified with respect to the
RCHC Managed Projects under Section 27.1 and 27.2 shall apply to the RCHC
Managed Projects as written and without reference to Sections 27.1 or 27.2.

28. GUARANTY.

28.1 Guaranty.

Each Guarantor unconditionally and irrevocably guaranties to Licensor that if
Licensee fails for any reason to perform when due any of its respective
obligations to Licensor under this Agreement, the Electronic Systems License
Agreement, and the Design Review Addendum (the “Obligations”) within the time
specified therein, it will without any demand or notice whatsoever promptly pay
or perform such Obligations (the “Guaranty”). The Guarantors acknowledge that
the Guaranty is a continuing guaranty and may not be revoked and shall not
otherwise terminate unless this (i) Agreement has terminated or expired in
accordance with Sections 4. or 18 and (ii) all amounts owing to Licensor by
Licensee and the Guarantors pursuant to the Obligations have been paid in full.
The liability of each Guarantor hereunder is independent of and not in
consideration of or contingent upon the liability of Licensee or any other
Guarantor and a separate action or actions may be brought and prosecuted against
any Guarantor, whether or not any action is brought or prosecuted against
Licensee or any other Guarantor or whether Licensee or any other Guarantor is
joined in any such action or actions. The Guaranty shall be construed as a
continuing, absolute and unconditional guaranty both of performance and of
payment (and not merely of collection) without regard to: (i) any modification,
amendment or variation in or addition to the terms of any of the Obligations or
any covenants in respect thereof or any security therefor, (ii) any extension of
time for performance or waiver of performance of any covenant of Licensee or any
other Guarantor or any failure or omission to enforce any right with regard to
or any other indulgence with respect to any of the Obligations, (iii) any
exchange, surrender,

 

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release of any other guaranty of or security for any of the Obligations, or
(iv) any bankruptcy, insolvency, reorganization, or proceeding involving or
affecting Licensee or any other Guarantor, it being Guarantors’ intent that
Guarantors’ obligations hereunder shall be absolute and unconditional under any
and all circumstances.

28.2 Guarantor Waivers.

Each Guarantor hereby expressly waives diligence, presentment, demand, protest,
and all notices whatsoever with regard to any of the Obligations and any
requirement that Licensor exhaust any right, power or remedy or proceed against
Licensee or any other Guarantor of or any security for any of the Obligations.
Each and every default in payment or performance by Licensee of any of the
Obligations shall give rise to a separate cause of action hereunder and separate
suits may be brought hereunder against any Guarantor as each cause of action
arises. Notwithstanding the foregoing, Licensor hereby acknowledges and agrees
that the Guarantors do not waive any defense that an Obligation has already been
paid, already been performed, is not due or yet due, or is subject to offset
under the terms of this Agreement. For the avoidance of doubt, nothing herein
shall obligate any Guarantor to make any payment which is illegal for such
Guarantor to have made under any Applicable Law now or hereafter in effect in
any jurisdiction applicable to such Guarantor.

28.3 Maximum Liability of Guarantors.

 

It being understood that the intent of Licensor is to obtain a guaranty from
each Guarantor, and the intent of each Guarantor is to incur guaranty
obligations, in an amount no greater than the largest amount that would not
render such obligations subject to avoidance under Section 548 of the Bankruptcy
Code or any applicable state law relating to fraudulent conveyances or
fraudulent transfers, it is hereby agreed that:

(a) if (i) the sum of the obligations of the Guarantors hereunder (the
“Guarantor Obligations”) exceeds (ii) the sum (such sum, the “Total Available
Net Assets”) of the Maximum Available Net Assets of the Guarantors and Licensee,
in the aggregate, then the Guarantor Obligations of each Guarantor shall be
limited to the greater of (x) the Total Available Net Assets and (y) the value
received by such Guarantor in connection with the incurrence of the Guarantor
Obligations to the greatest extent such value can be determined; and

(b) if, but for the operation of this clause (b) and notwithstanding clause
(a) above, the Guarantor Obligations of any Guarantor hereunder otherwise would
be subject to avoidance under Section 548 of the Bankruptcy Code or any
applicable state law relating to fraudulent conveyances or fraudulent transfers,
taking into consideration such Guarantor’s (i) rights of contribution,
reimbursement and indemnity from Licensee and the other Guarantors with respect
to amounts paid by such Guarantor in respect of the Obligations (calculated so
as to reasonably maximize the total amount of obligations able to be incurred
hereunder), and (ii) rights of subrogation to the rights of Licensor, then the
Guarantor Obligations of such Guarantor shall be the largest amount, if any,
that would not leave such Guarantor, after the incurrence of such obligations,
insolvent or with unreasonable small capital within the meaning of Section 548
of the Bankruptcy Code or any applicable state law relating to fraudulent
conveyances or fraudulent transfers, or otherwise make such obligations subject
to such avoidance.

Any Person asserting that the Guarantor Obligations of a Guarantor are subject
to clause (a) or are avoidable as referenced in clause (b) shall have the burden
(including the burden of production and of persuasion) of proving (i) the extent
to which such Guarantor Obligations, by operation of clause

 

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(a), are less than the Obligations owed by Licensee to Licensor or (ii) that,
without giving effect to clause (b), the Guarantor Obligations of such Guarantor
hereunder would be avoidable and the extent to which such Guarantor Obligations,
by operation of clause (b), are less than the Obligations of Licensee, as the
case may be.

[SIGNATURE BLOCKS APPEAR ON THE FOLLOWING PAGE]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement, under seal, as of the Effective Date.

LICENSOR: THE RITZ-CARLTON HOTEL COMPANY, L.L.C. By:   /S/ KEVIN M. KIMBALL
Name:   Kevin M. Kimball Title:   Vice President

 

LICENSEE:

MARRIOTT VACATIONS WORLDWIDE CORPORATION

By:   /S/ STEPHEN P. WEISZ Name:   Stephen P. Weisz Title:   President and Chief
Executive Officer

 

SOLELY FOR THE PURPOSES OF THE GUARANTY IN SECTION 28.:

THE RITZ-CARLTON MANAGEMENT COMPANY, LLC

By:  

The Ritz-Carlton Development

Company, Inc. its sole member

 

By:   /S/ STEPHEN P. WEISZ Name:   Stephen P. Weisz

Title:

  President

 

THE RITZ-CARLTON DEVELOPMENT COMPANY, INC. By:   /S/ STEPHEN P. WEISZ Name:  
Stephen P. Weisz Title:   President

 

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EXHIBIT A

DEFINITIONS

When used in this Agreement the following terms have the meanings indicated:

“AAA Rules” has the meaning set forth in Section 22.4.A.

“Accounting Period” means any four (4) week period having the same beginning and
ending dates as Licensee’s four (4) week accounting periods (except that an
Accounting Period may occasionally contain five (5) weeks when necessary to
conform Licensee’s accounting system to the calendar). Licensee shall have the
right, at its discretion, to modify the definition of Accounting Period to mean
any one of the twelve (12) calendar months in a calendar year or such other
period of time as is consistent with the accounting periods that Licensee may
implement, from time to time with respect to the MVW Ritz-Carlton Business.

“Affected Services” has the meaning set forth in Section 11.2.C.

“Affiliate” means, for any Person, a Person that is directly (or indirectly
through one or more intermediaries) Controlling, Controlled by, or under common
Control with such Person.

“Agreed Territorial Protections” has the meaning set forth in Section 5.7.A.

“Agreement” means this License Agreement, including any exhibits, attachments,
and addenda.

“Applicable Law” means all laws, regulations, ordinances, rules, orders,
decrees, and requirements of any governmental authority having jurisdiction over
the MVW Ritz-Carlton Business or over the Projects, the Sales Facilities,
Licensee, Guarantor, Licensor or this Agreement.

“Available Net Assets” shall mean, with respect to any Person, the amount, as of
the respective date of calculation, by which the sum of such Person’s assets
(including subrogation, indemnity, contribution, reimbursement and similar
rights that such Person may have, but excluding any such rights in respect of
the Guarantor Obligations), determined on the basis of a “fair valuation” or
their “fair saleable value” (whichever is the applicable test under Section 548
and other relevant provisions of the Bankruptcy Code and the relevant state
fraudulent conveyance or transfer laws), is greater than the amount that will be
required to pay all of such Person’s debts, in each case matured or unmatured,
contingent or otherwise, as of the date of calculation, but excluding
liabilities arising under the Guaranty set forth in Section 28. of this
Agreement and excluding, to the maximum extent permitted by Applicable Law with
the objective of avoiding rendering such Person insolvent, liabilities
subordinated to the Obligations arising out of loans or advances made to such
Person by any other Person.

“Blocked Areas” means (i) Spain and all of its territories and possessions,
(ii) Portugal and all of its territories and possessions, (iii) the United
Kingdom and all of its dependencies and territories except for Anguilla,
Bermuda, the Cayman Islands, and the Turks and Caicos Islands, and
(iv)continental France (meaning the country of France) and also including
Corsica for so long as it is a French territorial collectivity, but not
including any other French overseas departments, territories, possessions and
territorial collectivities.

“Brand Loyalty Programs” means the programs generally used for Ritz-Carlton
Hotels that are designed to increase brand loyalty (and consequently market
share, length of stay and frequency of usage of such hotels and other branded
and affiliated products), and/or any similar, complementary, or successor
program. As of the Effective Date, such programs include “Ritz-Carlton Rewards”.

 

Exhibit A - Page 1

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“Brand Standards” means the Design Guide; the Brand Style and Communications
Standards; the Operational Brand Standards; and the Quality Assurance Program
(including the Quality Assurance Audit System and the Customer Satisfaction
System), as of the Effective Date and as thereafter modified, amended or
supplemented in accordance with Section 7.2. The Brand Standards also include
Licensor’s brand standards for Ritz-Carlton Hotels, which include, without
limitation, standards and specifications related to health, fire and life
safety, security and terrorism standards, the bedding package, customer
accessible high speed internet access, Electronic Systems Standards, standards
related to transient rentals, standards related to food and beverage services
and outlets, but only to the extent applicable to the MVW Ritz-Carlton Business
and with appropriate modifications to reflect appropriate differences between
hotel service levels and service levels applicable to the Ritz-Carlton
Destination Club Business and the Ritz-Carlton Whole Ownership Residential
Business. The Design Guide; the Brand Style and Communications Standards; the
Operational Brand Standards; and the Quality Assurance Program will be set forth
on Licensee’s intranet site. All other Brand Standards will be set forth on
Licensor’s intranet site. The Brand Standards may be in paper or in electronic
form.

“Brand Style and Communications Standards” means those standards related to use,
style, and presentation of the Licensed Marks and other communications regarding
the MVW Ritz-Carlton Business as set forth in the Brand Style and Communications
Standards document and the Brand Creative and Communication Standards of The
Ritz-Carlton Destination Club document, as they exist on the Effective Date, as
they may be modified pursuant to Section 7.2.

“Branded Elements” means (i) the Brand Loyalty Programs or successor thereto,
(ii) Licensor-owned or -controlled branded elements of the Reservation System,
(iii) Licensor-owned or -controlled branded elements of Licensor’s website,
ritzcarlton.com, or any additional pages or sites within ritzcarlton.com,
(iv) use of the Brand Loyalty Programs member lists, (v) access to Ritz-Carlton
Hotels for marketing of Destination Club Products, and (vi) access to
Ritz-Carlton Hotels as an ancillary benefit exchange option for Destination Club
Products. Notwithstanding the foregoing, the platform, infrastructure, coding,
and non-customer facing elements of the Brand Loyalty Programs, the Reservation
System, and the Licensor website(s) shall not be considered “Branded Elements”
for purposes of this Agreement.

“Business Changes” has the meaning set forth in Section 11.2.C.

“Case Goods” means furniture and fixtures used in the Projects and their Public
Facilities, such as chests, armoires, chairs, beds, headboards, desks, tables,
television sets, mirrors, pictures, wall decorations, graphics and all other
unspecified items of the same class.

“Change in Control” shall be deemed to have occurred when (i) any “person” or
“group” (as such terms are used in Sections 13(e) and 14(d) of the Securities
Exchange Act), other than a Significant Shareholder or a “group” of Significant
Shareholders, acquires beneficial ownership (within the meaning of Rule 13d-3
under the Securities Exchange Act) of, or the power to exercise, directly or
indirectly, effective control for any purpose over, shares representing more
than (A) fifteen percent (15%) of the combined voting power of the
then-outstanding securities entitled to vote generally in elections of directors
of Licensee if Licensee is then a publicly traded company or (B) thirty percent
(30%) of the combined voting power of the then-outstanding securities entitled
to vote generally in elections of directors of Licensee if Licensee is not then
a publicly traded; (ii) the stockholders of Licensee approve any plan or
proposal for the liquidation, dissolution or winding up of Licensee; (iii) the
earlier of (A) the date Licensee (x) consolidates with or merges into any other
Person or any other Person merges into

 

Exhibit A - Page 2

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Licensee unless the stockholders of Licensee immediately before such transaction
own, directly or indirectly immediately following such transaction, at least a
majority of the combined voting power of the outstanding voting securities of
the Person resulting from such transaction in substantially the same proportion
as their ownership of the outstanding securities entitled to vote generally in
elections of directors of Licensee immediately before such transaction, or
(y) conveys, transfers or leases all or a substantial portion of all of
Licensee’s assets to any Person (other than a wholly-owned subsidiary as a
result of which Licensee becomes a holding company) or (B) the date the
stockholders of Licensee approve a definitive agreement to (x) consolidate
Licensee with or merge Licensee into any other Person unless the stockholders of
Licensee immediately before such transaction own, directly or indirectly
immediately following such transaction, at least a majority of the combined
voting power of the outstanding voting securities of the Person resulting from
such transaction in substantially the same proportion as their ownership of the
outstanding securities entitled to vote generally in elections of directors of
Licensee immediately before such transaction or (y) convey, transfer or lease
all or a substantial portion of all of Licensee’s assets to any Person (other
than a wholly-owned subsidiary as a result of which Licensee becomes a holding
company); or (iv) Continuing Directors do not at any time constitute a majority
of the Board of Directors of Licensee (or, if applicable, a successor
corporation to Licensee).

“Changes” has the meaning stated in Section 13.4.B.

“Co-Located Hotel” has the meaning set forth in Section 5.4.A.

“Co-Located Ritz-Carlton Hotel” has the meaning set forth in Section 5.6.

“Continuing Director” means at any date a member of Licensee’s Board of
Directors (i) who was a member of such board on the Effective Date or (ii) who
was nominated or elected by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or whose
election to Licensee’s Board of Directors was recommended or endorsed by at
least a majority of the directors who were Continuing Directors at the time of
such nomination or election or such lesser number comprising a majority of a
nominating committee if authority for such nominations or elections has been
delegated to a nominating committee whose authority and composition have been
approved by at least a majority of the directors who were Continuing Directors
at the time such committee was formed.

“Competing Entities” has the meaning stated in Section 9.1.F.

“Condominium Hotel” means a hotel in which the guest rooms may be placed in a
rental pool or rental program and some or all of the guest rooms are financed by
virtue of a lease, whole ownership condominium regime, strata title, or any
similar regime. Ritz-Carlton Residential Projects operating under the
“Ritz-Carlton Residences” name shall not be deemed to be Condominium Hotels for
the purposes of this Agreement.

“Control” (and any form thereof, such as “Controlling” or “Controlled”) means,
for any Person, the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of such Person.

“Controlled Property Owners’ Association” means a Property Owners’ Association
that is controlled by Licensee or one of its Affiliates.

“Customer Information” means the names, addresses, phone and fax numbers, email
addresses and other personal information of owners, customers or potential
owners or customers, mailing lists, “lead” lists, contact lists, or similar
lists or databases, and related data.

 

Exhibit A - Page 3

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“Customer Satisfaction System” means the mechanism used by Licensee to
administer and compile customer satisfaction data to measure different aspects
of the customer experience, including product, sales and Member services, as of
the Effective Date as it may be modified pursuant to Section 7.2. As of the
Effective Date, the Customer Satisfaction System consists of the Guest
Satisfaction Survey Program, the Member Satisfaction Survey Program in a form
substantially similar to the Member Satisfaction Survey Program used most
recently prior to the Effective Date with respect to the MVW Ritz-Carlton
Business, and the Sales and Marketing Satisfaction Program (previously known as
the Customer Acquisition Program) upon which the parties will agree on or before
April 1, 2012 (if the parties do not reach agreement on a Sales and Marketing
Satisfaction Program by April 1, 2012, then Licensee must promptly reinstitute
the Customer Acquisition Program used most recently prior to the Effective Date
with respect to the MVW Ritz-Carlton Business).

“CSS Measurement Period” means the time period set forth in the Customer
Satisfaction System used for measuring customer satisfaction under the Customer
Satisfaction System.

“Data Protection Laws” means data protection and privacy laws and regulations
under Applicable Law.

“Deficiency” has the meaning set forth in Section 8.4.C.

“Deflag” or “Deflagging” means (i) with respect to a Project, when a Project has
been removed from the System and is no longer operating under the Licensed
Marks, (ii) with respect to a Non-Site Specific Destination Club Ownership
Vehicle, when a Non-Site Specific Destination Club Ownership Vehicle has been
removed from the System and is no longer operating as part of a Licensed
Non-Site Specific Destination Club Program or under the Licensed Marks, and
(iii) with respect to a Licensor Lodging Facility, when a Licensor Lodging
Facility has been removed from the applicable system of Licensor Lodging
Facilities and is no longer operating under any of the Proprietary Marks.

“Design Guide” means the guide that comprises the standards necessary for
planning, constructing, renovating, and refurbishing Projects, including site
plans, architectural, mechanical, electrical, civil engineering, landscaping,
and interior design, as set forth in the Design Guide document as it exists on
the Effective Date, as it may be modified pursuant to Section 7.2.

“Design Review Addendum” means the Design Review Addendum attached to this
Agreement as Exhibit G, which is incorporated by reference in this Agreement.

“Destination Club Business” means the business of (i) developing and operating
Destination Club Projects; (ii) developing, selling, marketing, managing,
operating and financing Destination Club Products and Destination Club Units;
(iii) developing, selling, marketing and operating Exchange Programs;
(iv) managing rental programs associated with Destination Club Products;
(v) establishing and operating sales facilities for Destination Club Products;
(vi) managing the Member services related to Destination Club Products; and
(vii) managing or operating the amenities of Destination Club Projects (e.g.,
country clubs, spas, golf courses, food and beverage outlets, gift and sundry
shops, etc.) located at or in the general vicinity of Destination Club Projects,
and businesses that are ancillary to the foregoing activities (e.g. travel
insurance), all of which are associated with Destination Club Products.

“Destination Club Competitor” means any Person or an Affiliate of any Person
that (i) owns or has direct or indirect Ownership Interest in a Destination Club
Competitor Brand or (ii) is a master franchisee, master franchisor or
sub-franchisor for a Destination Club Competitor Brand (for the purposes hereof,
the terms master franchisee, master franchisor, and sub-franchisor each mean a
Person that has been granted the right by a franchisor to offer and sell
subfranchises for such Person’s own account). A

 

Exhibit A - Page 4

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Person that has an interest in a Destination Club Competitor Brand merely as a
franchisee or as a mere passive investor that has no Control or influence over
the business decisions of the Destination Club Competitor Brand, such as limited
partners in a partnership or as a mere non-Controlling stockholder in a
corporation, is not a Destination Club Competitor for purposes of this
Agreement.

“Destination Club Competitor Brand” means a branded Destination Club Business
chain with both (i) one thousand (1,000) or more Destination Club Units and
(ii) ten (10) or more Destination Club Projects; provided, however, that
Destination Club Competitor Brand shall not include a branded Destination Club
Business created or developed by Licensee or its Affiliates.

“Destination Club Project” means a project that includes Destination Club Units,
including all land used in connection with the project and (i) the freehold or
long-term leasehold interest to the site of the project; (ii) all improvements,
structures, facilities, entry and exit rights, parking, pools, landscaping, and
other appurtenances (including the project building and all operating systems)
located at the site of the project; and (iii) all furniture, fixtures,
equipment, supplies and inventories installed or located in such improvements at
the site of the project.

“Destination Club Royalty Fees” has the meaning stated in Section 3.1.A.

“Destination Club Products” means timeshare, fractional, interval, vacation
club, destination club, vacation membership, private membership club, private
residence club, points club, and other forms of products, programs and services,
in each case wherein purchasers acquire an ownership interest, use right or
other entitlement to use one or more of certain determinable overnight
accommodations and associated facilities in a system of units and facilities on
a recurring, periodic basis and pay for such ownership interest, use right or
other entitlement in advance (whether payments are made in lump-sum or
periodically over time), and associated Exchange Programs.

“Destination Club Unit” means a physical unit used for overnight accommodation
as part of a Destination Club Product.

“Dispute” means any dispute, controversy, or claim arising out of or relating to
this Agreement, or the making, breach, termination, or invalidity of this
Agreement, or the relationship created thereby.

“Effective Date” has the meaning stated in the preamble to this Agreement.

“Electronic Systems” means all Software, Hardware and all electronic access to
Licensor’s systems and data, licensed or made available to Licensee relating to
the System, including the Reservation System and any other system established
under Section 10.

“Electronic Systems License Agreement” means the electronic systems license
agreement that will be executed by Licensee as a condition to using the
Electronic Systems.

“Electronic Systems Standards” means Licensor’s standards, policies, procedures,
guidelines and practices with respect to (i) systems that interface with
Licensor’s Electronic Systems, (ii) information technology and systems that
store or transmit Licensor Confidential Information, and (iii) data security and
privacy and compliance with Data Protection Laws as applicable to the systems
and information technology referred to in clauses (i) and (ii) in this
definition, in each case as updated from time to time.

“Employee Benefits Allocation Agreement” means the Employee Benefits and Other
Employment Matters Allocation Agreement between Marriott International, Inc. and
Marriott Vacations Worldwide Corporation entered into in connection with the
Spin-Off Transaction.

 

Exhibit A - Page 5

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“Exchange Program” means any method, arrangement, program or procedure for the
voluntary exchange by Members of the right to use and occupy Destination Club
Units for the right to use, occupy or benefit from other accommodations,
facilities, programs or services that meet the luxury positioning of the
Ritz-Carlton Destination Club Business.

“Excluded Area” means any countries and jurisdictions in which Licensor does not
own a trademark registration for an applicable Licensed Mark, whether due to a
prior third party registration or application or use of a conflicting mark or
for other reasons, or with respect to which Licensor does not have the right to
grant licenses for the “Ritz-Carlton” name and mark to third-parties, and
includes any Unregistered Areas. As of the Effective Date, the Excluded Area
also includes the Blocked Areas.

“Existing Golf Facilities” means the golf courses, facilities and services
managed and operated as part of the MVW Ritz-Carlton Business as of the
Effective Date as set forth in Exhibit I.

“Existing Projects” means the Ritz-Carlton Destination Club Projects and the
Ritz-Carlton Residential Projects that are existing and in operation or that
have been approved by Licensor as of the Effective Date as set forth in Exhibit
B.

“Expert” shall mean an independent, nationally or internationally recognized
consulting firm or individual having a minimum of ten (10) years of
international experience in the timeshare and lodging industry and qualified to
resolve the issue in question, provided that an Expert shall not include any
individual who is, as of the date of appointment or within six (6) months prior
to such date, employed either directly or indirectly as a consultant in
connection with any other matter, by a party (or its Affiliates) seeking to
appoint such person.

“Extension Term” has the meaning set forth in Section 4.2.

“Extraordinary Event” means any of the following events, regardless of where
they occur or their duration: acts of nature (including hurricanes, typhoons,
tornadoes, cyclones, other severe storms, winds, lightning, floods, earthquakes,
volcanic eruptions, fires, explosions, disease, or epidemics); fires and
explosions caused wholly or in part by human agency; acts of war or armed
conflict; riots or other civil commotion; terrorism (including hijacking,
sabotage, chemical or biological events, nuclear events, disease-related events,
bombing, murder, assault and kidnapping), or the threat thereof; strikes or
similar labor disturbances; embargoes or blockades; shortage of critical
materials or supplies; action or inaction of governmental authorities that have
an impact upon the MVW Ritz-Carlton Business, excluding, however, general
economic and/or market conditions not caused by any of the events described
herein.

“Four Seasons Brand” means any brand owned or controlled by Four Seasons Hotels
and Resorts or its successors-in-interest (excluding Licensor or its Affiliates)
as of the Effective Date or at any time in the future, regardless of whether
such brand is subsequently acquired by a third party. As of the Effective Date,
the Four Seasons Brands include Four Seasons Hotels and Resorts.

“Frequent Traveler Program” See definition of Brand Loyalty Program.

“GDP Deflator” means the “Gross Domestic Product Implicit Price Deflator” issued
from time to time by the United States Bureau of Economic Analysis of the
Department of Commerce, or if the aforesaid GDP Deflator is not at such time so
prepared and published, any comparable index selected by Licensor and reasonably
satisfactory to Licensee (a “Substitute Index”) then prepared and published by
an agency of the government of the United States, appropriately adjusted for
changes in the manner in which such index is prepared and/or year upon which
such index is based. Any dispute regarding the selection of the Substitute Index
or the adjustments to be made thereto shall be settled by a panel of three (3)

 

Exhibit A - Page 6

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Experts in accordance with Section 22.5. Except as otherwise expressly stated
herein, whenever a number or amount is required to be “adjusted by the GDP
Deflator,” or similar terminology, such adjustment shall be equal to the
percentage increase or decrease in the GDP Deflator which is issued for the
month in which such adjustment is to be made (or, if the GDP Deflator for such
month is not yet publicly available, the GDP Deflator for the most recent month
for which the GDP Deflator is publicly available) as compared to the GDP
Deflator which was issued for the month in which the Effective Date occurred.

“Gross Commissions” means the gross commissions paid or to be paid to Licensee
or its Affiliates in connection with the initial sale or re-sale by Licensee or
its Affiliates on behalf of third parties of interests held by such third
parties in Ritz-Carlton Destination Club Units or in Ritz-Carlton Residential
Units (without deduction for any costs or Taxes). For the avoidance of doubt,
Gross Commissions exclude maintenance fees, management fees, dues, exchange
fees, enrollment fees, property management fees, or interest or financing
charges with respect to financed purchases.

“Gross Sales Price” means the gross sale price paid or to be paid to Licensee or
its Affiliates for the initial sale or re-sale of interests held by Licensee or
its Affiliates in Ritz-Carlton Destination Club Units or in Ritz-Carlton
Residential Units, whether directly or through the issuance of beneficial
interests, other ownership interests, use rights or other entitlements (whether
the value of which is denominated as points, weeks, or any other currency),
including interests in a land trust or similar real estate vehicle (without
deduction for any transaction costs including brokerage commissions and
expenses, but less applicable Taxes paid by Licensee or its Affiliates or gross
up for Taxes paid by purchasers, in each case assessed with respect to such sale
or re-sale transaction (and not on the basis of income)), regardless of whether
any part thereof is financed by Licensee or any third party. For the avoidance
of doubt, the Gross Sales Price excludes maintenance fees, management fees,
dues, exchange fees, enrollment fees, property management fees, or interest or
financing charges with respect to financed purchases. To the extent that
interests in Ritz-Carlton Destination Club Units are used as consideration, in
whole or in part, for the purchase of interests in other Ritz-Carlton
Destination Club Units, then the value ascribed to such interests shall be the
list price of the acquired interests, less any applicable discount.

“Guarantor” means individually and collectively the Person(s) who guarantee(s)
the performance of Licensee’s obligations under this Agreement , the Electronic
Systems License Agreement, and the Design Review Addendum under the Guaranty.

“Guarantor Obligations” has the meaning set forth in Section 28.3.

“Guaranty” means the guaranty set forth in Section 28.

“Hardware” means all computer hardware and other equipment (including all future
upgrades, enhancements, additions, substitutions, and other modifications
thereof) required for the operation of and connection to any Electronic System.

“Hilton Brand” means any brand owned or controlled by Hilton Worldwide or its
successors-in-interest (excluding Licensor or its Affiliates) as of the
Effective Date or at any time in the future, regardless of whether such brand is
subsequently acquired by a third party. As of the Effective Date, the Hilton
Brands include Waldorf Astoria Hotels and Resorts, Conrad Hotels and Resorts,
Hilton Hotels and Resorts, Doubletree by Hilton, Embassy Suites, Hampton, Home2,
and Hilton Grand Vacations.

“Illegal Facilities” has the meaning set forth in Section 9.1.G.

“Initial Term” has the meaning set forth in Section 4.1.

 

Exhibit A - Page 7

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“Interest Rate” means the lesser of: (i) LIBOR plus 800 basis points; or
(ii) the maximum rate permitted by applicable usury laws.

“Leisure/Vacation Product” means a product designed and intended primarily for
leisure and vacation travelers and uses, which may include limited meeting space
or multipurpose rooms or facilities designed for internal use by Licensee and
its Affiliates or use by small groups or for Property Owners’ Associations
meetings, as well as certain customary business amenities typically found at
leisure hotels, such as high-speed internet access, business services centers
and fax machines. For the avoidance of doubt, the following intended uses are
consistent with a Leisure/Vacation Product: recreational, social, educational or
other affinity group events, meetings or classes (such as cooking classes and
educational seminars); family reunions; the conducting of business during
leisure and vacation stays; and the fact that some customers may purchase and
use Destination Club Products primarily for business purposes, especially in
urban locations such as Boston or London. A Leisure/Vacation Product does not
include a product designed and intended primarily for business travelers or for
group, meeting, association or convention business.

“LIBOR” means the rate per annum for deposits in U.S. dollars for a one
(1) month period appearing on that page of the Bloomberg’s Report which displays
British Banker’s Association Interest Settlement Rates for deposits in U.S.
dollars (or if such page or service shall cease to be available, such other page
on that service or such other service designated by the British Banker’s
Association for the display of such Association’s Interest Settlement Rates for
Dollar deposits) as of 11:00 a.m. (London, England time) on the first business
day of each month.

“Licensed Non-Site Specific Destination Club Program” means a Non-Site Specific
Destination Club Program operating under the Licensed Marks. As of the Effective
Date, the Licensed Non-Site Specific Destination Club Programs include the
“Ritz-Carlton Destination Club” program.

“Licensed Domains” has the meaning stated in Section 13.4.B. The Licensed
Domains include the Licensed Project Domains.

“Licensed Marks” means (i) (a) the name and mark “Ritz-Carlton” solely as used
in the name and mark “Ritz-Carlton Destination Club”, in the Permitted Licensee
Affiliate Names, and in the domain names documented by the parties, but not
“Ritz-Carlton” or any elements thereof used by itself or with other words,
terms, designs or other elements, and (b) the Licensed Project Names; (ii) the
trademark “Ritz-Carlton” in stylized format solely as used in the name and mark
“Ritz-Carlton Destination Club” but not “Ritz-Carlton” in stylized format or any
elements thereof used by itself or with other words, terms, designs, or other
elements; (iii) the Lion & Crown Logo used in association with the Ritz-Carlton
brand; (iv) (x) the name and mark “Ritz-Carlton”, solely as used in the name and
mark “Ritz-Carlton Club” but not “Ritz-Carlton” or any elements thereof used by
itself or with other words, terms, designs or other elements and (y) the
trademark “Ritz-Carlton” in stylized format, solely as used in the name and mark
“Ritz-Carlton Club” but not “Ritz-Carlton” in stylized format or any elements
thereof used by itself or with other words, terms, designs or other elements;
(v) (x) the name and mark “Ritz-Carlton” solely as used in the name and mark
“Ritz-Carlton Residences” but not “Ritz-Carlton” or any elements thereof used by
itself or with other words, terms, designs or other elements and (y) the
trademark “Ritz-Carlton” in stylized format solely as used in the name and mark
“Ritz-Carlton Residences” but not “Ritz-Carlton” in stylized format or any
elements thereof used by itself or with other words, terms, designs or other
elements; (vi) the name and mark “Ritz-Carlton” solely as used in the name and
mark “Ritz-Carlton Golf” pursuant to the terms set forth in Section 1.C., but
not the name “Ritz-Carlton” used by itself or with other words, terms, designs
or other elements; and (vii) certain specified additional names and marks on an
exclusive or non-exclusive basis that Licensor may specify in writing from time
to time. The Licensed Marks shall not include other hotel brands or marks or
other marks owned by Licensor or its Affiliate. The Licensed Marks do not
include the Licensee Marks.

 

Exhibit A - Page 8

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“Licensed Project Domains” means the domain names that contain, reference, or
are comprised of the Licensed Project Names.

“Licensed Project Names” means the components of the full name and mark for one
or more individual Projects but excluding the name “Ritz-Carlton” in any form.
For example, “The Abaco Club on Winding Bay” would constitute the Licensed
Project Name for a Project with respect to which the full name is “The Abaco
Club on Winding Bay, a Ritz-Carlton Managed Club”.

“Licensed Services” means timeshare and/or residential services, including
development, marketing, sales, financing and management activities related to
timeshare and residential services.

“Licensee” has the meaning stated in the preamble to this Agreement.

“Licensee Confidential Information” means any confidential information,
knowledge, trade secrets, business information, operating procedures and
know-how that are not included in the Brand Standards, which is identified in
writing as confidential and is proprietary to Licensee or its Affiliates.
Licensee Confidential Information does not include any Licensor Confidential
Information, or Licensor Intellectual Property. Additionally, Licensee
Confidential Information shall not include information that Licensor can
demonstrate was, at the time of disclosure by Licensee to Licensor, part of the
public domain or became part of the public domain, by publication or otherwise,
except by breach of the provisions of this Agreement.

“Licensee Intellectual Property” means (i) the Licensee Marks and (ii) all other
intangible property used by Licensee in connection with the MVW Ritz-Carlton
Business, including trade secrets, customer lists, operating procedures and
know-how that are not included in the Brand Standards, copyrights and
copyrightable materials, patents, and online locators (including the
vacationclub.com domain name and other domain names (including domain names
assigned by Licensor or its Affiliates to Licensee), email addresses, metatags,
screen names, and social networking names) that do not comprise or contain any
of the Licensed Marks, provided, the Licensee Intellectual Property does not
include any of the Licensor Intellectual Property.

“Licensee Marks” means all trademarks, service marks, trade names, symbols,
emblems, logos, insignias, slogans and designs and other indicia of origin
(including restaurant names, lounge names, and other outlet names) which are
currently exclusively used to identify or are otherwise used in connection with
the MVW Ritz-Carlton Business (and not in any of Licensor’s or its Affiliates’
other businesses) (whether registered or unregistered, and whether used alone or
in connection with any other words, trademarks, service marks, trade names,
symbols, emblems, logos, insignias, indicia of origin, slogans, and designs)
other than the Licensed Marks and other than any marks or names that contain the
words “Ritz-Carlton” or other Licensor Intellectual Property. The Licensee Marks
include all trademarks and names assigned by Licensor to Licensee under
Section 13.7.A. The Licensee Marks do not include any of the Proprietary Marks.

“Licensee’s Website” has the meaning stated in Section 13.4.

“Licensor” means The Ritz-Carlton Hotel Company, L.L.C. and its successors and
assigns.

“Licensor Confidential Information” means: (i) the Brand Standards, including
the Brand Standards for the design, construction, renovation or operation of the
Projects; (ii) Electronic Systems and

 

Exhibit A - Page 9

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accompanying documentation developed for the System or elements thereof;
(iii) MVW Ritz-Carlton Business Customer Information; or (iv) any confidential
information, knowledge, trade secrets, business information or know-how
identified as confidential obtained from Licensor or its Affiliates (a) through
the use of any part of the System or concerning the System or the operation of
the MVW Ritz-Carlton Business and the Projects or (b) under any Transaction
Agreements. Licensor Confidential Information does not include any Licensee
Confidential Information or Licensee Intellectual Property. Additionally,
Licensor Confidential Information shall not include information that Licensee
can demonstrate was, at the time of disclosure by Licensor to Licensee, part of
the public domain or became part of the public domain, by publication or
otherwise, except by breach of the provisions of this Agreement.

“Licensor Intellectual Property” means (i) the Licensed Marks, and (ii) all
other intangible property licensed to Licensee for use in connection with the
MVW Ritz-Carlton Business, including trade secrets, MVW Ritz-Carlton Business
Customer Information, Brand Standards, know-how, copyrights and copyrightable
materials, and online locators that comprise or contain any of the Licensed
Marks (including domain names, email addresses, metatags, screen names and
social networking names), provided, the Licensor Intellectual Property does not
include any of the Licensee Intellectual Property.

“Licensor Lodging Facilities” means all hotels and other lodging facilities,
chains, brands, or hotel systems owned, leased, under development, or operated
or franchised, now or in the future, by Licensor or any of its Affiliates,
including: (i) Marriott Hotels, Resorts and Suites; Marriott Marquis Hotels; JW
Marriott Hotels and Resorts; Marriott Conference Centers; Marriott Executive
Apartments; Courtyard by Marriott Hotels; Fairfield Inn by Marriott Hotels;
Fairfield Inn & Suites by Marriott Hotels; Nickelodeon Resorts by Marriott;
Renaissance Hotels and Resorts; Renaissance ClubSport; Autograph Collection
Hotels; Residence Inn by Marriott Hotels; Bvlgari Hotels and Resorts; Edition
Hotels; Ritz-Carlton Hotels and Resorts; SpringHill Suites by Marriott Hotels;
TownePlace Suites by Marriott Hotels; and AC Hotels by Marriott; (ii) other
lodging products or concepts, including Marriott ExecuStay; JW Marriott
Residences; Marriott Marquis Residences; and (iii) any other lodging product or
concept developed or utilized by Licensor or any of its Affiliates in the
future.

“Licensor Usage Fees” means the fees for use of Licensor’s or its Affiliates’
Electronic Systems and other systems, copyrights and other materials, including,
without limitation, the Reservation System Fee and the fees for any other system
established under Section 10.

“Lodging Business” means the business of developing, promoting, constructing,
owning, leasing, acquiring, financing, managing, and/or operating, or
authorizing or otherwise licensing or franchising to other Persons the right to
develop, promote, construct, own, lease, acquire, finance, manage and/or
operate, hotels, resorts, corporate housing, serviced apartments, or other
transient or extended stay lodging facilities, including Condominium Hotels, but
does not include activities included in the term Destination Club Business or
Whole Ownership Residential Business.

“Lodging Competitor” means any Person or an Affiliate of any Person that
(i) owns or has direct or indirect Ownership Interest in a Lodging Competitor
Brand or (ii) is a master franchisee, master franchisor or sub-franchisor for a
Lodging Competitor Brand (for the purposes hereof, the terms master franchisee,
master franchisor, and sub-franchisor each mean a Person that has been granted
the right by a franchisor to offer and sell subfranchises for such Person’s own
account). A Person that has an interest in a Lodging Competitor Brand merely as
a franchisee or as a mere passive investor that has no Control or influence over
the business decisions of the Lodging Competitor Brand, such as limited partners
in a partnership or as a mere non-Controlling stockholder in a corporation, is
not a Lodging Competitor for purposes of this Agreement.

 

Exhibit A - Page 10

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“Lodging Competitor Brand” means (i) a branded full service or luxury hotel
chain with both (x) four thousand (4,000) or more rooms and (y) twenty (20) or
more hotels or (ii) a branded select service or extended stay hotel chain with
both (x) ten thousand (10,000) or more rooms and (y) fifty (50) or more hotels;
provided, however, that Lodging Competitor Brand shall not include a branded
hotel chain created or developed by Licensee or its Affiliates.

“Logoed Merchandise” has the meaning stated in Section 9.1.G.

“Luxury Brand Segment” means the “luxury” brand segment of the hospitality
industry as defined by Smith Travel Research (or its successor). If at any time
such segment is not then defined by Smith Travel Research (or its successor),
then such segment shall be replaced by a comparable segment as is then defined
by Smith Travel Research (or its successor). In the event Smith Travel Research
(or its successor) ceases to define comparable segmentation or in the event that
Smith Travel Research (or its successor) ceases to exist, then the parties shall
identify a replacement source and a replacement definition of the segment
comparable to “luxury” as previously defined by Smith Travel Research (or its
successor). Any dispute regarding the selection of replacement definitions or
sources shall be settled by Expert resolution in accordance with Section 22.5.

“Management Company” has the meaning stated in Section 8.3.

“Management Company Acknowledgment” means an acknowledgment signed by the
Management Company, Licensee and Licensor, the current form of which is attached
hereto as Exhibit C.

“Marketing Content” means all advertising, marketing, promotional, sales and
public relations concepts, press releases, materials, copy, concepts, plans,
programs, seminars, brochures, directories, and sales and marketing campaigns or
other information to be released to the public, whether in paper, digital,
electronic or computerized form, or in any form of media now or hereafter
developed.

“Marriott Family Member” means J.W. Marriott, Jr., Richard E. Marriott, any
brother or sister of J.W. Marriott, Sr., any children or grandchildren of any of
the foregoing, any spouses of any of the foregoing, or any trust or other entity
established primarily for the benefit of one or more of the foregoing.

“Marriott License Agreement” has the meaning set forth in Recital H.

“Marriott Licensed Business” means the Destination Club Business and Whole
Ownership Residential Business of Licensee that is licensed to use the
“Marriott” name and mark pursuant to the Marriott License Agreement.

“Maximum Available Net Assets” shall mean, with respect to any Person, the
greatest of the Available Net Assets of such Person calculated as of the
following dates: (A) the Effective Date, and (B) each date on which such Person
expressly reaffirms the Guaranty set forth in Section 28 of this Agreement.

“Member” means (i) an owner of a timeshare, fractional, or interval ownership
interest, use right or other entitlement to use a Destination Club Unit or
(ii) an owner of an interest in a Residential Unit.

“Member Service Center” means a facility at which Licensee provides Members with
off-site services with respect to their use and enjoyment of interests in
Ritz-Carlton Destination Club Products.

“Minimum Customer Satisfaction Score” means the minimum score that Projects are
required to meet and maintain for customer satisfaction under the Customer
Satisfaction System.

 

Exhibit A - Page 11

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“Mixed-Use Project” has the meaning stated in Section 5.2.F.

“Modified Third-Party List” has the meaning set forth in Section 9.1.E.

“MVW Ritz-Carlton Business” means, collectively, the Ritz-Carlton Destination
Club Business and the Ritz-Carlton Whole Ownership Residential Business operated
under the Licensed Marks and the System pursuant to this Agreement.

“MVW Ritz-Carlton Business Customer Information” means the names, addresses,
phone and fax numbers, email addresses and other personal information of owners,
customers or potential owners or customers (including all Members and their
family members), mailing lists, “lead” lists, contact lists, or similar lists or
databases, and related data, in each case in whatever form and to the extent
such information (i) was in Licensee’s possession as of the date of the Spin-Off
Transaction, (ii) obtained by Licensee in connection with the MVW Ritz-Carlton
Business on or after the date of the Spin-Off Transaction (including directly or
indirectly obtained from Licensor or its Affiliates or by or through the Brand
Loyalty Program), or (iii) any Modified Third-Party List.

“Negotiation Opportunity Notice” has the meaning stated in Sections 5.4.A. and
5.6.

“New Licensee Programs” has the meaning stated in Section 9.5.B.

“New Project Application” has the meaning stated in Section 5.2.A.

“New Projects” means Ritz-Carlton Destination Club Projects and Ritz-Carlton
Residential Projects that are not in existence or operating as of the Effective
Date but that are subsequently developed and operated pursuant to the terms and
conditions of this Agreement.

“Noncompetition Agreement” has the meaning stated in Section 2.1.

“Non-Controlled Property Owners’ Association” means a Property Owners’
Association that is not controlled by Licensee or one of its Affiliates .

“Non-RCHC Managed Projects” has the meaning stated in Section 8.3.B.

“Non-Renewal Agreement” has the meaning stated in Section 18.1.A(ii).

“Non-RHL Territory” means the United States, Canada, Chile, Brazil, Taiwan, and
their respective territories and possessions.

“Non-Site Specific Destination Club Ownership Vehicle” means an ownership
vehicle (such as a trust or property owning company) that (i) holds interests in
Destination Club Units and (ii) is included as part of a Non-Site Specific
Destination Club Program.

“Non-Site Specific Destination Club Program” means a program under which
purchasers acquire an ownership interest, use right or other entitlement to use
a system of Destination Club Projects.

“Obligations” has the meaning set forth in Section 28.1.

“Offering Documents” has the meaning stated in Section 9.1.B.

“Operational Brand Standards” means those standards related to marketing and
sales operations, Member services, and Project operations, as set forth in the
following documents as they exist on the Effective Date, as they may be modified
pursuant to Section 7.2: (i) Owner Services Brand Standards; (ii) Resort
Operations Brand Standards; and (iii) Marketing and Sales Operations Brand
Standards.

 

Exhibit A - Page 12

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“Other Mark(s)” means any trademark, trade name, symbol, slogan, design,
insignia, emblem, device, or service mark that is not a Licensed Mark.

“Ownership Interest” means all forms of ownership of legal entities or property,
both legal and beneficial, voting and non-voting, including stock interests,
partnership interests, limited liability company interests, joint tenancy
interests, leasehold interests, proprietorship interests, trust beneficiary
interests, proxy interests, power-of-attorney interests, and all options,
warrants, and any other forms of interest evidencing ownership or Control.

“Payment Obligations” has the meaning set forth in Section 3.8.A.

“Permitted Licensee Affiliate Names” means the names of certain of Licensee’s
Affiliates set forth on Exhibit J.

“Permitted Territorial Restrictions” has the meaning set forth in Section 5.7.B.

“Person” means an individual; legal entity such as a partnership, trust,
corporation, limited liability company; a government; an unincorporated
organization; or any other legal entity of any kind.

“Personally Identifiable Information” means any information 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
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 that is generated, collected, stored or obtained as part of this Agreement
or in connection with the MVW Ritz-Carlton Business, including transactional and
other data pertaining to users.

“Projects” means the Existing Projects and the New Projects.

“Property Owners’ Association” means an association of owners of interests in
Ritz-Carlton Destination Club Units, in Ritz-Carlton Residential Units, or in a
Licensed Non-Site Specific Destination Club Program.

“Proprietary Marks” means the Licensed Marks, the Licensor Intellectual
Property, and any other intangible property, trademarks, trade names, trade
dress, words, symbols, logos, slogans, designs, insignia, emblems, devices,
service marks, and indicia of origin (including restaurant names, lounge names,
or other outlet names), or combinations thereof, that are owned or registered by
Licensor or any of its Affiliates, or are used to identify or are otherwise
associated by virtue of usage with the System, all as may be changed, deleted,
added to or otherwise modified by Licensor or its Affiliates. The Proprietary
Marks may be owned currently by Licensor or any of its Affiliates or later
developed or acquired, and may or may not be registered or applied for in any
jurisdiction. The Proprietary Marks do not include any Licensee Marks or
Licensee Intellectual Property.

“Public Facilities” means any meeting rooms, conference rooms, restaurants,
bars, lounges, pools, recreation facilities, lobby areas, and all other similar
public facilities.

“Purchase Contract” has the meaning set forth in Section 3.1.C.(ii).

 

Exhibit A - Page 13

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“Quality Assurance Audit System” means the process utilized by Licensee to
measure the quality and performance of operations at the Projects as it exists
on the Effective Date, as it may be modified pursuant to Section 7.2.

“Quality Assurance Program” means the quality assurance program used by Licensee
to monitor customer satisfaction and the operations, facilities and services at
the Projects as it exists on the Effective Date, as it may be modified pursuant
to Section 7.2. The Quality Assurance Program includes the Customer Satisfaction
System and the Quality Assurance Audit System.

“RCHC Managed Project” has the meaning stated in Section 8.3.A(i).

“RCHC Management Agreement” has the meaning stated in Section 8.3.A(i).

“Registrar” has the meaning stated in Section 13.4.B.

“Remediation Arrangement” means an arrangement agreed to by Licensor and
Licensee under which, as applicable, Licensee agrees to (and completes) the cure
of any material noncompliance with this Agreement or the Brand Standards or
Licensor agrees to (and completes) the cure of any material failure to comply
with Licensor’s material obligations under this Agreement. Such Remediation
Arrangement shall provide (i) reasonable opportunities for the parties to
consult with each other or their respective Affiliates with respect to the
appropriate cure for such noncompliance and (ii) for reasonable time periods for
Licensee or Licensor, as applicable, to diligently pursue and cure such
noncompliance, and the period to cure under the Remediation Arrangement shall
not exceed one (1) year unless otherwise agreed by the parties.

“Reservation System” means any reservation system designated by Licensor for use
by Ritz-Carlton Hotels (including all Software, Hardware and electronic access
related thereto).

“Reservation System Fee” means the fee Licensee must pay to Licensor
representing Licensee’s share of the costs and expenses of the Reservation
System, including development and incremental operating costs, ongoing
maintenance, field support costs, and a reasonable return on capital.

“Residential Project” means a project that includes Residential Units, including
all land used in connection with the project and (i) the freehold or long-term
leasehold interest to the site of the project; (ii) all improvements,
structures, facilities, entry and exit rights, parking, pools, landscaping, and
other appurtenances (including the project building and all operating systems)
located at the site of the project; and (iii) all furniture, fixtures,
equipment, supplies and inventories installed or located in the Public
Facilities of such improvements at the site of the project.

“Residential Royalty Fees” has the meaning stated in Section 3.1.B.

“Residential Units” means whole ownership residential units, including single
family homes, condominium units, or other housing units which are owned on a
whole (not fractional) ownership basis.

“Rewards Agreement” means the Marriott Rewards Affiliation Agreement between
Marriott International, Inc., Marriott Rewards, LLC, Marriott Vacations
Worldwide Corporation, and Marriott Ownership Resorts, Inc. regarding the Brand
Loyalty Program entered into in connection with the Spin-Off Transaction.

“RHL” means The Ritz Hotel, Limited, an English private company.

 

Exhibit A - Page 14

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“RHL Agreement” means that certain Amended and Restated Global Trademark
Agreement between Licensor and RHL dated January 1, 2008, as such agreement may
be amended, under which Licensor is licensed to use and sublicense the name,
“Ritz”, as part of the Licensed Marks throughout the RHL Territory.

“RHL Territory” as of the Effective Date means all of the Territory, except for
the United States, Canada, Chile, Brazil, and Taiwan, and their respective
territories and possessions.

“Ritz-Carlton Destination Club Business” means the Destination Club Business
operated under the name “Ritz-Carlton Destination Club”, “Ritz-Carlton Club”,
and the System and using other Licensed Marks, all pursuant to this Agreement.
The Ritz-Carlton Destination Club Business does not include the business of
managing or franchising hotels, other overnight lodging accommodation products
offered for transient rental, except as specifically provided in Section 9.2, or
any Condominium Hotel.

“Ritz-Carlton Destination Club Products” means Destination Club Products
existing as of the Effective Date or to be developed in future, and which are
sold, marketed, developed, and/or operated under the name “Ritz-Carlton
Destination Club”, “Ritz-Carlton Club”, or the System or using other Licensed
Marks, all pursuant to this Agreement. Ritz-Carlton Destination Club Products
shall exclude hotels and other overnight lodging accommodation products offered
for transient rental, subject to Licensee’s rights set forth in Section 9.2.

“Ritz-Carlton Destination Club Projects” means Destination Club Projects
existing as of the Effective Date or to be developed in future, and which are
marketed, developed, and/or operated under the name “Ritz-Carlton Destination
Club”, “Ritz-Carlton Club”, or the System or using other Licensed Marks, all
pursuant to this Agreement. Ritz-Carlton Destination Club Projects shall exclude
hotels and other overnight lodging accommodation products offered for transient
rental, subject to Licensee’s rights set forth in Section 9.2. Where the
Ritz-Carlton Destination Club Project is limited to Ritz-Carlton Destination
Club Units being offered within a larger, mixed-use facility, and Licensee does
not control the other improvements, structures, facilities, entry and exit
rights, parking, pools, landscaping, and other appurtenances located at such
facility, then the Ritz-Carlton Destination Club Project shall refer only to
such Ritz-Carlton Destination Club Units, and the other improvements,
structures, facilities, entry and exit rights, parking, pools, landscaping, and
other appurtenances located at such facility shall be of a quality and standard
that is comparable to that required of Ritz-Carlton Destination Club Projects
generally under this Agreement.

“Ritz-Carlton Destination Club Units” means Destination Club Units existing as
of the Effective Date or to be developed in future, and which are sold,
marketed, developed, and/or operated under the name “Ritz-Carlton Destination
Club”, “Ritz-Carlton Club”, or the System or using other Licensed Marks, all
pursuant to this Agreement.

“Ritz-Carlton Hotel” means a full-service hotel operated by Licensor, an
Affiliate of Licensor, or a licensee of Licensor or its Affiliates under the
trade name Ritz-Carlton and does not include any other Licensor Lodging Facility
or other business operation.

“Ritz-Carlton Residential Projects” means Residential Projects existing as of
the Effective Date or to be developed in the future, and which are marketed,
developed, and/or operated under the name “Ritz-Carlton Residences” or the
System or using other Licensed Marks, all pursuant to this Agreement. Where the
Ritz-Carlton Residential Project is limited to Ritz-Carlton Residential Units
being offered within a larger, mixed-use facility, and Licensee does not control
the other improvements, structures, facilities, entry and exit rights, parking,
pools, landscaping, and other appurtenances located at such facility, then the
Ritz-Carlton Residential Project shall refer only to such Ritz-Carlton
Residential Units,

 

Exhibit A - Page 15

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and the other improvements, structures, facilities, entry and exit rights,
parking, pools, landscaping, and other appurtenances located at such facility
shall be of a quality and standard that is comparable to that required of
Ritz-Carlton Residential Projects generally under this Agreement.

“Ritz-Carlton Residential Units” means Residential Units existing as of the
Effective Date or to be developed in future, and which are sold, marketed,
developed, and/or operated under the name “Ritz-Carlton Residences” or the
System or using other Licensed Marks, all pursuant to this Agreement.

“Ritz-Carlton Whole Ownership Residential Business” means the Whole Ownership
Residential Business operated under (i) the name “Ritz-Carlton Residences”, and
(ii) the System and other Licensed Marks, all pursuant to this Agreement.

“Royalty Fees” means, collectively, the Destination Club Royalty Fees and the
Residential Royalty Fees.

“Sales Facilities” means galleries, desks and other physical facilities from
which interests in Destination Club Units and/or Residential Units which are
part of the MVW Ritz-Carlton Business are offered and sold to the public.

“Separation and Distribution Agreement” means the Separation and Distribution
Agreement between Marriott International, Inc. and Marriott Vacations Worldwide
Corporation entered into in connection with the Spin-Off Transaction.

“Service Modifications” has the meaning set forth in Section 11.2.C.

“Services Manual” means the manual under which certain services are provided by
Licensor or its Affiliates to Licensee or its Affiliates in accordance with
Section 11.2.

“Significant Shareholder” means any Person that is:

(i) either a Marriott Family Member or on the date hereof possesses, directly or
indirectly, and such possession has been publicly disclosed, the power to vote
5% or more of the outstanding shares of common stock of the Licensee,

(ii) or hereafter becomes a spouse of or any other relative (by blood, marriage
or adoption) of a Person described in clause (i),

(iii) or becomes a transferee of the interests of any of the foregoing Person or
Persons by descent or by trust or similar arrangement intended as a method of
descent, or

(iv)(x) an employee benefit or stock ownership plan of the Licensee or (y) a
grantor trust established for the funding, directly or indirectly, of the
Licensee’s employee benefit plans and programs.

“Soft Goods” means textile, fabric and vinyl and similar products used in
finishing and decorating the Ritz-Carlton Destination Club Units and the
corridors and the Public Facilities of the Projects, such as vinyl wall and
floor coverings, drapes, sheers, cornice coverings, carpeting, bedspreads,
lamps, lamp shades, artwork, task chairs, upholstery and all other unspecified
items of the same class.

“Software” means all computer software and accompanying documentation (including
all future enhancements, upgrades, additions, substitutions and other
modifications) provided to Licensee by or through Licensor and/or third parties
designated by Licensor or its Affiliates required for the operation of and
connection to any Electronic System.

 

Exhibit A - Page 16

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“Specially Designated National or Blocked Person” means: (i) a Person designated
by the U.S. Department of Treasury’s Office of Foreign Assets Control as a
“specially designated national or blocked person” or similar status; (ii) a
Person described in Section 1 of U.S. Executive Order 13224, issued on
September 23, 2001; or (iii) a Person otherwise identified by government or
legal authority as a Person with whom Licensor, Licensee or any of their
Affiliates, are prohibited from transacting business. As of the Effective Date,
a list of such designations and the text of the Executive Order are published
under the internet website address www.ustreas.gov/offices/enforcement/ofac.

“Starwood Brand” means any brand owned or controlled by Starwood Hotels and
Resorts or its successors-in-interest (excluding Licensor or its Affiliates) as
of the Effective Date or at any time in the future, regardless of whether such
brand is subsequently acquired by a third party. As of the Effective Date, the
Starwood Brands include Le Meridien, Westin, The Luxury Collection, aLoft, Four
Points, Sheraton, Element by Westin, St. Regis, and W Hotels.

“System” means the Brand Standards, the Licensor Intellectual Property and other
distinctive, distinguishing elements or characteristics that Licensor or its
Affiliates have developed, designated or authorized for the operation of the MVW
Ritz-Carlton Business and the Projects, including: the Reservation System and
other Electronic Systems, the Brand Loyalty Programs, training programs,
Licensor websites, and advertising programs, as such may be modified, amended or
supplemented in accordance with Section 7.2. The System does not include any of
the Licensee Intellectual Property.

“System Removal Agreement” has the meaning stated in Section 18.1.A(ii).

“Tax Sharing and Indemnity Agreement” means the Tax Sharing and Indemnity
Agreement between Marriott International, Inc. and Marriott Vacations Worldwide
Corporation entered into in connection with the Spin-Off Transaction.

“Taxes” means all taxes (including any sales, gross receipts, value-added or
goods and services taxes), levies, charges, impositions, stamp or other duties,
fees, deductions, withholdings or other payments levied or assessed by any
competent governmental authority, including by any federal, national, state,
provincial, local, or other tax authority.

“Term” means the Initial Term and the Extension Terms, if any.

“Territory” means the world.

“Third-Party List” has the meaning stated in Section 9.1.E.

“Total Available Net Assets” has the meaning set forth in Section 28.3.

“Transaction Agreements” has the meaning set forth in the Separation and
Distribution Agreement.

“Transfer” means any sale, conveyance, assignment, exchange, pledge,
encumbrance, lease or other transfer or disposition, directly or indirectly,
voluntarily or involuntarily, absolutely or conditionally, by operation of law
or otherwise.

 

Exhibit A - Page 17

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“Travel Expenses” means all commercially reasonable travel, food and lodging,
living, and other out-of-pocket costs and expenses (including, the cost and
expense of obtaining any required visas, work permits or similar documentation).

“Undeveloped Parcels” has the meaning stated in Section 5.3.

“Unregistered Area” has the meaning stated in Section 13.1.C(2).

“Vulnerable Registrations” has the meaning stated in Section 13.1.C(2).

“Whole Ownership Residential Business” means the business of (i) developing and
operating Residential Projects; (ii) developing, selling, marketing, managing,
operating and financing Residential Units;(iii) managing rental programs
associated with Residential Projects; (iv) establishing and operating sales
facilities for Residential Units; (v) managing the owner services related to
Residential Units; and (vi) managing or operating the amenities of Residential
Projects (e.g. country clubs, spas, golf courses, food and beverage outlets,
gift and sundry shops, etc.) located at or in the general vicinity of
Residential Projects and businesses that are ancillary to the foregoing
activities, all associated with Residential Projects.

 

Exhibit A - Page 18

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EXHIBIT B

EXISTING PROJECTS

 

Approved Name of Project

  

Address of Project

  

Project Operator

  

Destination Club

and/or Residential

The Abaco Club on Winding Bay, a Ritz-Carlton Managed Club   

P.O. Box AB20571

Marsh Harbour Abaco, The Bahamas

   The Ritz-Carlton Hotel Company, Ltd.   

Destination Club

Residential

The Ritz-Carlton Club, Aspen Highlands   

0075 Prospector Road

Aspen, Colorado 81611

   The Ritz-Carlton Management Company, L.L.C.    Destination Club The
Ritz-Carlton Club, Bachelor Gulch   

100 Bachelor Ridge

Beaver Creek, Colorado 81620

   The Ritz-Carlton Management Company, L.L.C.    Destination Club The
Ritz-Carlton Residences at Kauai Lagoons   

3325 Holokawelu Way

Lihue, Hawaii 96766

   The Ritz-Carlton Management Company, L.L.C.    Destination Club The
Ritz-Carlton Club, Lake Tahoe   

700 Northstar Drive

Truckee, California 96161

   The Ritz-Carlton Management Company, L.L.C.    Destination Club The
Ritz-Carlton Club, St. Thomas   

6900 Great Bay

St. Thomas 00802 U.S. Virgin Islands

   RC Hotels (Virgin Islands), Inc.    Destination Club The Ritz-Carlton Club,
Vail   

1031 South Frontage Road

Vail, Colorado 81657

   The Ritz-Carlton Management Company, L.L.C.    Destination Club The
Ritz-Carlton Club & Residences, Kapalua Bay   

1 Bay Drive

Lahaina, Maui, Hawaii 96761

   The Ritz-Carlton Development Company, Inc.   

Destination Club

Residential

The Ritz-Carlton Club & Residences, San Francisco   

690 Market Street

San Francisco, California 94101

   The Ritz-Carlton Management Company, L.L.C.   

Destination Club

Residential

The Ritz-Carlton Golf Club & Spa, Jupiter   

115 Eagle Tree Terrace

Jupiter, Florida 34477

   The Ritz-Carlton Management Company, L.L.C.   

Destination Club

Residential

The Ritz-Carlton Residences, Vail   

1031 South Frontage Road

Vail, Colorado 81657

   The Ritz-Carlton Management Company, L.L.C.    Residential

 

Exhibit B - Solo Page

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EXHIBIT B-1

UNDEVELOPED PARCELS

 

Project / Asset

  

Inv To be Sold

Abaco, Bahamas   

• Beachfront lots

(10.1 Acres)

• Ironshore lots

(5.6 Acres)

• Golf lots

(26.0 Acres)

• Inland lots

(9.6 Acres)

• Marles facing land

(58.2 Acres)

Grand Bahama, Bahamas   

• Undeveloped

Timeshare Parcel (20 Acres)

• MVCI Plan = 348 Units

 

• Undeveloped

Hotel Parcel

(10 Acres)

• MVCI Plan = 380 rooms

 

Exhibit B - 1 - Page 1

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Project / Asset

  

Inv To be Sold

Kauai Lagoons, HI   

• Inn on the Cliffs

(22 units)

• Townhomes

(5 units)

• Makalii Bldg A

(37 units)

• Makalii Bldg B

(52 units)

• Maikalii Bldg C

(28 units)

• Residential Golf Lots

(65 lots)

• MVC T/S

(292 units)

• MVC T/S Sequel

(193 units)

• Affordable Housing (31 units)

• Golf Course, Restaurant & Golf Clubhouse

St. Thomas Sequel, Cabrita Point, USVI

 

Residential Lots

  

Lots:

• 28 available

 

2

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

EXHIBIT C

MANAGEMENT COMPANY ACKNOWLEDGMENT

This Management Company Acknowledgment (“Management Company Acknowledgment”) is
executed as of                         , 20            , by and between
                        , a                         (“Management Company”),
Marriott Vacations Worldwide Corporation, a Delaware corporation (“Licensee”),
and The Ritz-Carlton Hotel Company, L.L.C., a Delaware limited liability company
(“Licensor”).

WHEREAS, Management Company has entered into an agreement (“Management
Agreement”) with Licensee, pursuant to which Management Company will operate the
[NAME OF PROJECT] (the “Project”) located at                          (“Approved
Location”), in accordance with the terms of that certain License, Services and
Development Agreement dated effective November 19, 2011 for Ritz-Carlton
Projects (as such agreement may be amended, supplemented, restated or otherwise
modified, the “License Agreement”) between Licensor and Licensee; and

WHEREAS, Licensee has requested that Licensor consent to the operation of the
Project by Management Company in accordance with the License Agreement.

NOW, THEREFORE, in consideration of the mutual undertakings and benefits to be
derived herefrom, the receipt and sufficiency of which are acknowledged by each
of the parties hereto, it is hereby agreed as follows:

1. Licensor’s Consent. Subject to and in accordance with the terms and
conditions of this Management Company Acknowledgment and the License Agreement,
Licensor hereby consents to the operation of the Project by Management Company
and grants to Management Company the right to operate the Project in accordance
with the Brand Standards and to access and use the System, at, and only at, the
Approved Location during the term of the License Agreement on behalf of
Licensee. Licensor’s grant in the immediately preceding sentence will terminate
without notice to Management Company contemporaneously with the occurrence of
any of the following events: (a) any termination of the License Agreement or
Licensee’s rights under the License Agreement with respect to the Project or
(b) the execution of another management company acknowledgment among Licensor,
Licensee and another management company with respect to the Project; provided
that the duties and obligations of Management Company that by their nature or
express language survive such termination, including Sections 3.b. and c. below,
will continue in full force and effect notwithstanding the termination of
Licensor’s grant in the immediately preceding sentence.

2. Management Company Representations and Covenants. Management Company
represents and warrants to Licensor that:

a. Management Company (and any Person this is in Control of Management Company
or that is Controlled by Management Company) (i) is not known in the community
as being of bad moral character; (ii) has not been convicted in any court of a
felony or other offense that could result in imprisonment for one (1) year or
more or a fine or penalty of one million dollars ($1,000,000) (as adjusted
annually after the Effective Date of the License Agreement by the GDP Deflator)
or more; (iii) is not a Specially Designated National or Blocked Person; or
(iv) is not a Lodging Competitor;

b. neither Management Company nor any Affiliate of Management Company is a
Lodging Competitor; and

 

Exhibit C - Page 1

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

c. the Management Agreement is valid, binding and enforceable and contains no
terms, conditions, or provisions that are, or through any act or omission of
Licensee or Management Company, may be or may cause a breach of or default under
the License Agreement.

3. Management Company and Licensee Acknowledgments. Management Company and
Licensee covenant and agree to the following:

a. Management Company will have the exclusive authority and responsibility for
the day-to-day on-site management of the Project on behalf of and for the
benefit of Licensee with respect to and in accordance with the terms of the
License Agreement. The general manager of the Project will be an employee of
Management Company and devote such time and attention to the management and
operation of the Project as is necessary to fully comply with the terms,
conditions and restrictions set forth in the License Agreement;

b. The Project will be operated in strict compliance with the requirements of
the License Agreement, and Management Company will observe fully and be bound by
all terms, conditions and restrictions regarding the management and operation of
the Project as set forth in the License Agreement, including those related to
Licensor Intellectual Property, as if and as though Management Company had
executed the License Agreement as “Licensee,” provided that Management Company
obtains no rights under the terms of the License Agreement, except as
specifically set forth herein and the rights granted hereunder do not constitute
a license or franchise or sub-license or sub-franchise to Management Company.
Management Company will comply with all Applicable Laws in connection with its
management of the Project and will obtain in a timely manner all permits,
certificates, and licenses necessary for the full and proper operation of the
Project;

c. Licensor may enforce directly against Management Company all terms in the
License Agreement regarding Licensor Intellectual Property and the management
and operation of the Project during and subsequent to Management Company’s
tenure as operator of the Project. Licensor may seek and obtain all available
legal and equitable remedies from Management Company based on Management
Company’s failure to comply with the terms of this Management Company
Acknowledgment, in addition to any remedies Licensor may obtain from Licensee
under the License Agreement;

d. Management Company hereby assigns (and will cause each of its employees or
independent contractors who contributed to such modifications, derivatives or
additions to assign) to Licensor, in perpetuity throughout the world, all
rights, title and interest (including the entire copyright and all renewals,
reversions and extensions thereof) in and to all modifications, derivatives or
additions to the Licensor Intellectual Property and other aspects of the System
proposed by or on behalf of Management Company or its Affiliates. Management
Company waives (and will cause each of its employees or independent contractors
who contributed to such modifications, derivatives or additions to waive) all
rights of “droit moral” or “moral rights of authors” or any similar rights that
Management Company (or its employees or independent contractors) may now or
hereafter have in the modifications, derivatives or additions to the Licensor
Intellectual Property and other aspects of the System proposed by or on behalf
of Management Company or its Affiliates and Management Company disclaims any
interest in such modifications by virtue of a constructive trust. Management
Company agrees to execute (or cause to be executed) and deliver to Licensor any
documents and to do any acts that may reasonably be deemed necessary by Licensor
to perfect or protect the title in the modifications, derivatives and additions
herein conveyed, or intended to be conveyed now or in the future;

 

Exhibit C - Page 2

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

e. Any default under the terms of the License Agreement caused wholly or
partially by Management Company will constitute a default under the terms of the
Management Agreement, for which Licensee may terminate the Management Agreement;

f. Licensee and Management Company will not modify or amend the Management
Agreement in such a way as to create a conflict or other inconsistency with the
terms of the License Agreement or this Management Company Acknowledgment;

g. Except in extraordinary circumstances, such as theft or fraud on the part of
Management Company or a default by Licensee under the License Agreement caused
by Management Company for which Licensee needs to promptly remove Management
Company from the Project, the Management Agreement will not be terminated or
permitted to expire without at least thirty (30) days’ prior notice to Licensor;

h. Management Company will perform the day-to-day operations of the Project.
Licensor has the right to communicate directly with Management Company, and the
managers at the Project regarding day-to-day operations of the Project, provided
that Licensor shall not direct Management Company to take, or fail to take, any
action that may cause a breach of the Management Agreement or this Management
Acknowledgement. Licensor has the right to rely on instructions of Management
Company and the managers at the Project as to matters relating to the operation
of the Project, and the agreements of such managers are binding on Management
Company; and

4. Existence and Power. Each of Management Company and Licensee represents and
warrants with respect to itself that (i) it is a legal entity duly formed,
validly existing, and in good standing under the laws of the jurisdiction of its
formation, (ii) it has the ability to perform its obligations under this
Management Company Acknowledgment and under the Management Agreement, and
(iii) it has all necessary power and authority to execute and deliver this
Management Company Acknowledgment.

5. Authorization; Contravention.

a. Management Company and Licensee each represents and warrants with respect to
itself that the execution and delivery of this Management Company Acknowledgment
and the performance by Management Company and Licensee of its respective
obligations hereunder and under the Management Agreement: (i) have been duly
authorized by all necessary action; (ii) do not require the consent of any third
parties (including lenders) except for such consents as have been properly
obtained; and (iii) do not and will not contravene, violate, result in a breach
of, or constitute a default under (a) its certificate of formation, operating
agreement, articles of incorporation, by-laws, or other governing documents,
(b) any regulation of any governmental body or any decision, ruling, order, or
award by which each may be bound or affected, or (c) any agreement, indenture or
other instrument to which each is a party; and

b. Management Company represents and warrants to Licensor that: (i) neither
Management Company (including any and all of its directors and officers), nor
any of its Affiliates or the funding sources for any of the foregoing is a
Specially Designated National or Blocked Person (as defined in the License
Agreement); (ii) neither Management Company nor any of its Affiliates is
directly or indirectly owned or controlled by the government of any country that
is subject to an embargo by the United States government; and (iii) neither
Management Company nor any of its Affiliates is acting on behalf of a government
of any country that is subject to such an embargo. Management Company further
represents and warrants that it is in compliance with any applicable anti-money
laundering law and terrorist financing law. Management Company agrees that it
will notify Licensor in writing immediately upon the occurrence of any event
which would render the foregoing representations and warranties of this
Section 5.b. incorrect.

 

Exhibit C - Page 3

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

6. Controlling Agreement. If there are conflicts between any provision(s) of the
License Agreement and this Management Company Acknowledgment on the one hand and
the Management Agreement on the other hand, the provision(s) of the License
Agreement and this Management Company Acknowledgment will control.

7. No Release. This Management Company Acknowledgment will not release or
discharge Licensee from any liability or obligation under the License Agreement,
and Licensee will remain liable and responsible for the full performance and
observance of all of the provisions, covenants, and conditions set forth in the
License Agreement.

8. Limited Consent. Licensor’s consent to Management Company operating the
Project and Licensor’s grant to Management Company of the right to operate the
Project are personal to Management Company, and this Management Company
Acknowledgment is not assignable by Licensee or Management Company. If there is
a change in control of Management Company or if Management Company becomes, is
acquired by, comes under the control of, or merges with or into a Lodging
Competitor, or if there is a material adverse change to the financial status or
operational capacity of Management Company, Licensee will promptly notify
Licensor of any such change and Management Company will be subject to the
consent process under the License Agreement as a new operator of the Project.

9. Defined Terms. Unless specifically defined herein, all capitalized terms used
in this Management Company Acknowledgment will have the same meanings set forth
in the License Agreement.

10. Governing Law; Venue; Dispute Resolution. The parties agree that this
Management Company Acknowledgment shall be subject to the governing law and, for
the purpose of resolving any dispute under Section 13 of this Management Company
Acknowledgment, the venue provisions set forth in Section 22.1 of the License
Agreement.

11. Management Company’s Address. Management Company’s mailing address is
                                                             . Management
Company agrees to provide notice to both Licensee and Licensor if there is any
change in Management Company’s mailing address.

12. No Third Party Beneficiaries. Nothing in this Management Company
Acknowledgment is intended, or will be deemed, to confer any rights or remedies
under or by reason of this Management Company Acknowledgment upon any Person
other than Licensor, Licensee and their respective Affiliates, successors and
assigns.

13. Injunctive Relief. Licensor will be entitled to injunctive or other
equitable relief from a court of competent jurisdiction, without the necessity
of proving the inadequacy of money damages as a remedy or irreparable harm,
without the necessity of posting a bond, and without waiving any other rights or
remedies at law or in equity, for any actual or threatened material breach or
violation of this Management Company Acknowledgment for which such relief is an
available remedy, the Brand Standards (including, but not limited to, threats or
danger to public health or safety) or actual or threatened misuse or
misappropriation of the Licensor Intellectual Property or the Licensor
Confidential Information. The rights conferred by this Section 13 expressly
include, without limitation, Licensor’s entitlement to affirmative injunctive,
declaratory, and other equitable or judicial relief (including specific
performance) for Management Company’s failure to operate any portion of the
Project in accordance with the applicable Brand Standards, including, without
limitation, affirmative relief that any such deficiencies are cured and
thereafter meet the Brand Standards.

 

Exhibit C - Page 4

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14. Arbitration. The parties agree that except as otherwise specified in this
Management Company Acknowledgment, any Dispute or any other matter concerning
any aspect of the relationship of Licensor and Management Company will be
finally settled by arbitration according to the arbitration provisions set forth
in Section 22.4 of the License Agreement.

15. Miscellaneous. The parties hereby incorporate by reference Sections 22.3
(costs of enforcement), 24.1.A (construction and severability), and 26.2
(multiple counterparts) of the License Agreement.

16. WAIVER OF JURY TRIAL AND PUNITIVE AND EXEMPLARY DAMAGES. THE PARTIES AGREE
THAT LICENSEE, MANAGEMENT COMPANY AND LICENSOR EACH HEREBY ABSOLUTELY,
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY AND THE RIGHT TO CLAIM OR
RECEIVE SPECIAL, CONSEQUENTIAL, PUNITIVE AND EXEMPLARY DAMAGES IN ANY
ARBITRATION, LITIGATION, ACTION, CLAIM, SUIT OR PROCEEDING, AT LAW OR IN EQUITY,
ARISING OUT OF, PERTAINING TO OR IN ANY WAY ASSOCIATED WITH THE COVENANTS,
UNDERTAKINGS, REPRESENTATIONS OR WARRANTIES SET FORTH HEREIN, THE RELATIONSHIPS
OF THE PARTIES HERETO, WHETHER AS “MANAGEMENT COMPANY,” “LICENSEE” OR “LICENSOR”
OR OTHERWISE, THIS AGREEMENT, OR ANY ACTIONS OR OMISSIONS IN CONNECTION WITH ANY
OF THE FOREGOING.

17. Entire Agreement. This Management Company Acknowledgment, together with the
License Agreement and the Management Agreement, including all exhibits,
attachments and addenda, and any execution copies executed simultaneously or in
connection with, this Management Company Acknowledgment and the License
Agreement, contain the entire agreement between the parties as it relates to the
Project and the Approved Location as of the date of this Management Company
Acknowledgment. This is a fully integrated agreement. No agreement of any kind
relating to the matters covered by this Management Company Acknowledgment will
be binding upon any party hereto unless and until the same has been made in a
written, non-electronic instrument that has been duly executed by the
non-electronic signature of the parties. This Management Company Acknowledgment
may not be amended or modified by conduct manifesting assent, or by electronic
signature, and each party is hereby put on notice that any individual purporting
to amend or modify this Management Company Acknowledgment by conduct manifesting
assent or by electronic signature is not authorized to do so.

[SIGNATURE BLOCKS APPEAR ON THE FOLLOWING PAGE]

 

Exhibit C - Page 5

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Management Company Acknowledgment, under seal, as of the date first above
written.

 

LICENSOR:   THE RITZ-CARLTON HOTEL COMPANY, L.L.C. By:       (SEAL) Name:       
Title:       LICENSEE:  

MARRIOTT VACATIONS WORLDWIDE CORPORATION

By:       (SEAL) Name:        Title:       MANAGEMENT COMPANY:  

[MANAGEMENT COMPANY]

By:       (SEAL) Name:        Title:      

 

Exhibit C - Page 6

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EXHIBIT D

FORM OF OPERATING STATEMENT

SEE ATTACHED

 

Exhibit D

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Marriott Vacations Worldwide

Royalty fees due to RC based on period results

For Period X, 20XX from X/XX/20XX to X/XX/20XX

 

      Total
Closings      Prespin
Closings      Postspin
Closings      Commission
Earned    Royalty
Rate     Amount Due
to RC      Comments  

Luxury

                   

3.1.A.ii.a—Developer Closings in Destination Club

                 2.0 %      —        

3.1.A.ii.b—Reacquired Closings in Destination Club

                 1.0 %      —        

3.1.A.iii.a—M&S Agreements in Destination Club

                 2.0 %      —        

3.1.A.iii.b—Resale Closings in Destination Club

                 1.0 %      —        

3.1.B.ii.a—Developer Closings in Residential Units

                 2.0 %      —        

3.1.B.ii.b—Reacquired Closings in Residential Units

                 1.0 %      —        

3.1.B.iii.a—M&S Agreements in Residential Units

                 2.0 %      —        

3.1.B.iii.b—Resale Closings in Residential Units

                 1.0 %      —           

 

 

    

 

 

    

 

 

         

 

 

    

Total Luxury

     —           —           —                —           

 

 

    

 

 

    

 

 

         

 

 

    

Total MVW

     —           —           —                —           

 

 

    

 

 

    

 

 

         

 

 

    

Adjustment from YTD calculation

                      See comment A   

Final MVW Amount Due to RC

                   —                         

 

 

    

A Required true-up of YTD royalty fee due to RC based on closings that were not
included in previous period report totals.

MVW, to the best of our knowledge, certificate that the data represented in this
document is free of errors and misrepresentations.

 

   VP and Controller, MVW

 

1 of 7

Exhibit D - Page 1

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Marriott Vacations Worldwide

Royalty fees due to RC based on period results

YTD For Period X, 20XX from X/XX/20XX to X/XX/20XX

 

      Total
Closings      Prespin
Closings      Postspin
Closings      Commission
Earned    Royalty
Rate     Amount Due
to RC      Comments  

Luxury

                   

3.1.A.ii.a—Developer Closings in Destination Club

                 2.0 %      —        

3.1.A.ii.b—Reacquired Closings in Destination Club

                 1.0 %      —        

3.1.A.iii.a—M&S Agreements in Destination Club

                 2.0 %      —        

3.1.A.iii.b—Resale Closings in Destination Club

                 1.0 %      —        

3.1.B.ii.a—Developer Closings in Residential Units

                 2.0 %      —        

3.1.B.ii.b—Reacquired Closings in Residential Units

                 1.0 %      —        

3.1.B.iii.a—M&S Agreements in Residential Units

                 2.0 %      —        

3.1.B.iii.b—Resale Closings in Residential Units

                 1.0 %      —           

 

 

    

 

 

    

 

 

         

 

 

    

Total Luxury

     —           —           —                —           

 

 

    

 

 

    

 

 

         

 

 

    

Total MVW

     —           —           —                —           

 

 

    

 

 

    

 

 

         

 

 

    

Adjustment from YTD calculation

                      See comment A                       

Final MVW Amount Due to RC

                   —                         

 

 

    

A Required true-up of YTD royalty fee due to RC based on closings that were not
included in previous period report totals.

MVW, to the best of our knowledge, certificate that the data represented in this
document is free of errors and misrepresentations.

 

   VP and Controller, MVW

2 of 7

 

Exhibit D - Page 2

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

Marriott Vacations Worldwide

Property and Built Unit Counts

For Quarter X, 2011 from X/XX/20XX to X/XX/20XX

 

     Beginning of Quarter              Changes              End of Quarter  

Property Count

        

Luxury

           

 

 

    

 

 

    

 

 

 

Total Property Count

     —           —           —        

 

 

    

 

 

    

 

 

 

Built Units

        

Luxury

           

 

 

    

 

 

    

 

 

 

Total Built Units

     —           —           —        

 

 

    

 

 

    

 

 

 

3 of 7

 

Exhibit D - Page 3

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

Marriott Vacations Worldwide

Royalty fees due to RC based on period results

For Period X, 20XX from X/XX/20XX to X/XX/20XX

 

      NATO      Luxury      Europe      Asia Pacific      Tolat MVW     
Comments  

Destination Club Closings

                 

3.1.A.ii.a—Developer Closings in Destination Club

                 

Luxury Distribution 1

                 

Luxury Distribution 2

                    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.A.ii.a—Developer Closings in Destination Club

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Royalty due at @ 2%

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1. A.ii.B—Reacquired Closings in Destination Club

                 

Luxury Distribution 1

                 

Luxury Distribution 2

                    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.A.ii.B—Reacquired Closings in Destination Club

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Royalty due at @ 1%

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.A.iii.a—M&S Agreements in Destination Club

                 

Luxury Distribution 1

                    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.A.iii.a—M&S Agreements in Destination Club

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total MVW commission earned

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Royalty due at 2% of MVW commission earned

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.A.iii.b—Resale Closings in Destination Club

                 

Luxury Distribution 1

                    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.A.iii.b—Resale Closings in Destination Club

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total MVW commission earned

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Royalty due at 1% of MVW commission earned

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total Royalty Due on Destination Club Closings

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Residential Unit Closings

                 

3.1.B.ii.a—Developer Closings In Residential Units

                 

Luxury Distribution 1

                 

Luxury Distribution 2

                    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.B.ii.a—Developer Closings in Residential Units

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Royalty due at @ 2%

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.B.ii.B—Reacquired Closings in Residential Units

                 

Luxury Distribution 1

                 

Luxury Distribution 2

                    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.B.ii.B—Reacquired Closings in Residential Units

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Royalty due at @ 1%

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.B.iii.a—M&S Agreements in Residential Units

                 

Luxury Distribution 1

                    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.B.iii.a—M&S Agreements in Residential Units

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total MVW commission earned

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Royalty due at 2% of MVW commission earned

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.B.iii.b—Resale Closings in Residential Units

                 

Luxury Distribution 1

                    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.B.iii.b—Resale Closings in Residential Units

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total MVW commission earned

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Royalty due at 1% of MVW commission earned

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total Royalty Due on Residential Unit Closings

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total Royalty Fee to be Paid-PTD

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Add YTD true up if necessary

                    See comment A      

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Final Period Royalty Fee to be Paid- PTD

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

A Required true-up of YTD royalty fee due to RC based on closings that were not
Included in previous period report totals.

4 of 7

 

Exhibit D - Page 4

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

Marriott Vacations Worldwide

Royalty fees due to RC based on period results

For Period X, 20XX from X/XX/20XX to X/XX/20XX

 

    

NATO

  

Luxury

  

Europe

  

Asia Pacific

   Total MVW     

Comments

B Breakdown of total period closing to pre- and post-spin totals

   Total MVW Closings             MVW Closings on pre-spin contract sales      
              

 

 

           MVW Closings on post-spin contract sales       Ties to reference C   
           

 

 

    

C Validation of post-spin closing by royalty category

   Closings (3.1.A.ii.a)      —               Closings (3.1.A.ii.b)      —     
         Closings (3.1.A.iii.a)      —               Closings (3.1.A.iii.b)     
—               Closings (3.1.B.ii.a)      —               Closings (3.1.B.ii.b)
     —               Closings (3.1.B.iii.a)      —               Closings
(3.1.B.iii.b)      —                       

 

 

           Total      —         Ties to reference B               

 

 

           Check      —                       

 

 

    

MVW, to the best of our knowledge, certifies that the data represented in this
document is free of errors and misrepresentations.

 

   VP and Controller, MVW

5 of 7

 

Exhibit D - I Page 5

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

Marriott Vacations Worldwide

Royalty fees due to RC based on period results

YTD For Period X, 20XX from X/XX/20XX to X/XX/20XX

 

      NATO      Luxury      Europe      Asia Pacific      Total MVW     
Comments

Destination Club Closings

                 

3.1.A.ii.a—Developer Closings in Destination Club

                 

Luxury Distribution 1

                 

Luxury Distribution 2

                    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.A.ii.a—Developer Closings In Destination Club

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Royalty due at @ 2%

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.A.ii.B—Reacquired Closings in Destination Club

                 

Luxury Distribution 1

                 —        

Luxury Distribution 2

                 —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.A.ii.B—Reacquired Closings in Destination Club

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Royalty due at @ 1%

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.A.iii.a—M&S Agreement in Destination Club

                 

Luxury Distribution 1

                    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.A.iii.a—M&S Agreements in Destination Club

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total MVW commission earned

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Royalty due at 2% of MVW commission earned

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.A.iii.b—Resale Closings in Destination Club

                 

Luxury Distribution 1

                    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.A.iii.b—Resale Closings in Destination Club

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total MVW commission earned

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Royalty due at 1% of MVW commission earned

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total Royalty Due on Destination Club Closings

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Residential Unit Closings

                 

3.1.B.ii.a— Developer Closings in Residential Units

                 

Luxury Distribution 1

                 

Luxury Distribution 2

                    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.B.ii.a— Developer Closings in Residential Units

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Royalty due at @ 2%

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.B.ii.B—Reacquired Closings in Residential Units

                 

Luxury Distribution 1

                 

Luxury Distribution 2

                    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.B.ii.B—Reacquired Closings in Residential Units

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Royalty due at @ 1%

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.B.iii.a—M&S Agreements in Residential Units

                 

Luxury Distribution 1

                    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.B.iii.a—M&S Agreements in Residential Units

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total MVW commission earned

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Royalty due at 2% of MVW commission earned

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.B.iii.b—Resale Closings in Residential Units

                 

Luxury Distribution 1

                    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

3.1.B.iii.b—Resale Closings in Residential Units

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total MVW commission earned

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Royalty due at l% of MVW commission earned

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total Royally Due on Residential Unit Closings

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total Royalty Fee to be Paid-YTD

     —           —           —           —           —           

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

True up check:

                 

Total Royalty Fee- YTD per Period 8 report Current Period 9 Royalty Fee

                    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

Total

                    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

6 of 7

 

Exhibit D - Page 6

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

Marriott Vacations Worldwide

Royalty fees due to RC based on period results

YTD For Period X, 20XX from X/XX/20XX to X/XX/20XX

 

    

NATO

   Luxury      Europe      Asia Pacific      Total MVW      Comments

YTD true up

   —        —           —           —           —         See Comments A

A Required true-up of YTD royalty fee due to RC based on closings that 
were not included in previous period report totals.

  

  

B Breakdown of total period closing to pre- and post-spin totals

     Total MVW Closings         

MVW Closings on pre-spin contract sales

  

                    

 

 

    

MVW Closings on post-spin contract sales

  

      Ties to reference C               

 

 

    

C Validation of post-spin closing by royalty category

        Closings (3.1.A.ii.a)         —                 Closings (3.1.A.ii.b)   
     —                 Closings (3.1.A.iii.a)         —                 Closings
(3.1.A.iii.b)         —                 Closings (3.1.B.ii.a)         —        
        Closings (3.l.B.ii.b)         —                 Closings (3.1.B.iii.a)
        —                 Closings (3.1.B.iii.b)         —                    
  

 

 

             Total         —         Ties to Reference B               

 

 

             Check         —                       

 

 

    

MVW, to the best of our knowledge, certifies that the data represented in this
document is free of errors and misrepresentations.

 

   VP and Controller, MVW

 

7 of 7

Exhibit D - Page 7

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

EXHIBIT E

AFFILIATE SUBLICENSE AGREEMENT

THIS AFFILIATE SUBLICENSE AGREEMENT (this “Sublicense Agreement”) is entered
into this              day of                         , 2        , (“Effective
Date”) by and between Marriott Vacations Worldwide Corporation, a Delaware
corporation (“MVWC”) and                                          
               , a                                      and an Affiliate of MVWC
(“Sublicensee”).

RECITALS

A. MVWC is the licensee under that certain License, Services And Development
Agreement dated effective November 19, 2011 with The Ritz-Carlton Hotel Company,
L.L.C., a Delaware limited liability company (“Licensor”), a true and correct
copy of which has been provided to Sublicensee (the “Ritz-Carlton License”).
Each initially capitalized term which is not defined in this Sublicense
Agreement shall have the meaning given to such term in the Ritz-Carlton License.

B. Under the Ritz-Carlton License and subject to the terms and conditions
thereof, including, without limitation, all reservations of rights and
limitations on exclusivity set forth therein, MVWC has been granted a license to
use the Licensed Marks and the System to operate the Ritz-Carlton Destination
Club Business and the Ritz-Carlton Whole Ownership Residential Business within
the Territory.

[Use the following Recitals C. and D. for New Project development]

C. MVWC is permitted to delegate the authority to develop New Projects to MVWC
Affiliates pursuant to Section 5.2.D. of the Ritz-Carlton License and in
accordance with the terms and conditions of this Sublicense Agreement.

D. MVWC has delegated to Sublicensee the authority to develop the New Project
described in Exhibit A to this Sublicense Agreement (the “Project”).

[Use the following Recitals C. and D. for Existing/New Project operation]

C. MVWC is permitted to delegate the authority to operate Existing Projects and
New Projects to MVWC Affiliates pursuant to Section 5.1.C. and 5.2.D. of the
Ritz-Carlton License and in accordance with the terms and conditions of this
Sublicense Agreement.

D. MVWC has delegated to Sublicensee the authority to operate the Project(s)
described in Exhibit A to this Sublicense Agreement (the “Project(s)”).

[Use the following Recitals C. and D. for Sales and Marketing]

C. MVWC is permitted to delegate certain non-management functions involving
regional and/or local sales and marketing of Ritz-Carlton Destination Club
Products and Residential Units for Ritz-Carlton Residential Projects to any
Affiliate pursuant to Section 5.8.B. of the Ritz-Carlton License and, where, in
Licensor’s judgment, it is required to fulfill such functions, to sublicense to
such Affiliate the right to use the Licensed Marks and the System.

D. MVWC has delegated to Sublicensee the sales and marketing functions described
in Exhibit A to this Sublicense Agreement (“Sales and Marketing Services”) and
in connection therewith is willing to sublicense to Sublicensee the right to use
the Licensed Marks and System in accordance with the terms of this Sublicense
Agreement.

 

Exhibit E - Page 1

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

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

1. RIGHTS GRANTED.

[Use the following paragraph 1 for New Project development]

MVWC hereby grants to Sublicensee a non-exclusive license to use the Licensed
Marks and the System, during the Term (defined below) of this Sublicense
Agreement, for the sole purpose of developing the Project identified on Exhibit
A.

[Use the following paragraph 1 for Existing/New Project operation]

MVWC hereby grants to Sublicensee a non-exclusive license to use the Licensed
Marks and the System, during the Term (defined below) of this Sublicense
Agreement, for the sole purpose of operating the Project(s) identified on
Exhibit A.

[Use the following paragraph 1 for Sales and Marketing]

MVWC hereby grants to Sublicensee a non-exclusive license to use the Licensed
Marks and the System, during the Term (defined below) of this Sublicense
Agreement, for the sole purpose of performing the Sales and Marketing Services
within the territor(y)(ies) identified on Exhibit B.

2. RITZ-CARLTON LICENSE.

This Sublicense Agreement is subject and subordinate to the Ritz-Carlton
License. Except as may be inconsistent with the terms and provisions hereof, the
terms and provisions of the Ritz-Carlton License shall be applicable to this
Sublicense Agreement and shall be incorporated into this Sublicense Agreement as
if MVWC was the licensor and Sublicensee was the licensee under the Ritz-Carlton
License [with respect to the Project(s)] [In Sales and Marketing agreement,
substitute “with respect to the Sales and Marketing Services”]. Sublicensee
acknowledges and agrees that, [with respect to the Project(s)] [In Sales and
Marketing agreement, substitute “with respect to the Sales and Marketing
Services”], it is bound by the same responsibilities, limitations, and duties of
the licensee under the Ritz-Carlton License and that such responsibilities,
limitations, and duties are hereby incorporated in this Sublicense Agreement.

3. REPRESENTATIONS AND WARRANTIES.

Sublicensee represents and warrants that it satisfies the definition of
“Affiliate” under the Ritz-Carlton License.

4. TERM AND TERMINATION.

[Use the following paragraph 4.A. for New Project development]

A. The Term of this Sublicense Agreement begins on the Effective Date and
expires on the earlier of (i) the date on which Sublicensee’s authority to
develop the Project expires or terminates, (ii) the date on which the Project is
Deflagged, or (iii) the termination or expiration of the Ritz-Carlton License.

 

Exhibit E - Page 2

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[Use the following paragraph 4.A. for Existing/New Project operation]

A. The Term of this Sublicense Agreement begins on the Effective Date and
expires on the earlier of (i) the date on which Sublicensee’s authority to
operate the Project, or, if this Sublicense Agreement covers more than one
(1) Project, all of the Projects, expires or terminates, (ii) the date on which
the Project is, or, if this Sublicense Agreement covers more than one
(1) Project, all of the Projects are, Deflagged, or (iii) the termination or
expiration of the Ritz-Carlton License. If this Sublicense Agreement covers more
than one (1) Project and any (but not all) of those Projects are Deflagged or
Sublicensee’s authority to operate any such Project expires or is terminated,
Exhibit A shall be amended to delete the affected Project(s), and Sublicensee
shall no longer have the right to use the Licensed Marks or System in connection
with the operation of such Project(s).

[Use the following paragraph 4.A. for Sales and Marketing]

A. The Term of this Sublicense Agreement begins on the Effective Date and
expires on the earlier of (i) the date on which Sublicensee’s authority to
perform the Sales and Marketing Services expires or terminates, or (ii) the
termination or expiration of the Ritz-Carlton License.

B. MVWC shall have the right to terminate this Sublicense Agreement immediately
upon written notice to Sublicensee in the event of Sublicensee’s material breach
of this Sublicense Agreement.

5. RIGHTS AND OBLIGATIONS UPON EXPIRATION OR TERMINATION.

Upon the expiration or termination of this Sublicense Agreement, all rights
herein granted to Sublicensee shall revert to MVWC or Licensor , and Sublicensee
shall immediately cease all use of the Licensed Marks and System.

6. ASSIGNMENT.

A. This Sublicense Agreement is personal to Sublicensee, and Sublicensee may not
Transfer this Sublicense Agreement or any interest herein or any Ownership
Interest in Sublicensee without MVWC’s prior written consent, which MVWC may
grant or withhold in its sole discretion. Any such attempted Transfer shall be
void and shall constitute a material breach of this Sublicense Agreement.

B. MVWC may Transfer this Sublicense Agreement in accordance with the terms of
the Ritz-Carlton License.

7. MISCELLANEOUS.

A. This Sublicense Agreement, including the Recitals, contains the entire
agreement between the parties concerning the sublicensed rights and may not be
modified without the prior written consent of both parties and, except to the
extent required by Applicable Law, without Licensor’s prior written approval. In
the event of a conflict between this Sublicense Agreement and the Ritz-Carlton
License, the Ritz-Carlton License shall control.

B. This Sublicense Agreement does not constitute and shall not be construed as
constituting a partnership, joint venture, agency or employment relationship, or
any relationship other than that of licensor and licensee or sublicensee.

 

Exhibit E - Page 3

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C. The language of this Sublicense Agreement shall in all cases be construed as
a whole, according to its fair meaning and not strictly for or against any of
the parties. Headings of paragraphs herein are for convenience of reference only
and are without substantive significance.

D. Sublicensee acknowledges that the rights and powers retained by Licensor
under the Ritz-Carlton License are necessary to protect Licensor’s intellectual
property rights, and specifically, to conserve the goodwill and good name of
Licensor’s products and company and the name “Ritz-Carlton”. Sublicensee
therefore agrees that Sublicensee will not allow the same to become involved in
matters which will, or could, detract from or impugn the public acceptance and
popularity thereof, or impair their legal status.

E. MVWC and Sublicensee agree that to the extent permitted under Applicable Law,
Licensor and its Affiliates are third party beneficiaries of this Sublicense
Agreement, and it is intended by MVWC and Sublicensee that Licensor and its
Affiliates will be entitled to enforce this Sublicense Agreement. MVWC and
Sublicensee further agree that Licensor and its Affiliates are not liable for
and do not assume any duties, obligations or liabilities under this Sublicense
Agreement unless agreed to in writing by Licensor or its Affiliates, as
applicable. Sublicensee acknowledges and agrees that (i) its obligations
hereunder (including payment obligations) [with respect to the Project(s)] [In
Sales and Marketing agreement, substitute “with respect to the Sales and
Marketing Services”] are primary obligations; (ii) that Licensor and its
Affiliates may pursue Sublicensee directly to enforce such obligations, and
(iii) that Licensor and its Affiliates are not required to proceed against MVWC
or any Guarantor (as defined in the Ritz-Carlton License) before proceeding
against Sublicensee with respect to the enforcement of such obligations.

F. The respective obligations of the parties under this Sublicense Agreement,
which by their nature would continue beyond the termination, cancellation or
expiration of this Sublicense Agreement, including but not limited to the
provisions of Paragraph 4, shall survive termination, cancellation or expiration
of this Sublicense Agreement.

G. Sublicensee agrees that this Sublicense Agreement shall be subject to the
governing law and dispute resolution provisions set forth in the Ritz-Carlton
License.

IN WITNESS WHEREOF, the parties have executed this Sublicense Agreement as of
the date first above written.

 

MARRIOTT VACATIONS WORLDWIDE CORPORATION By:        Name:        Title:    
SUBLICENSEE:   By:        Name:        Title:    

 

Exhibit E - Page 4

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EXHIBIT A

DESCRIPTION OF PROJECT(S)

[In Sales and Marketing agreement, substitute “SALES AND MARKETING SERVICES” for
“DESCRIPTION OF PROJECT(S)”]

 

Exhibit A to Exhibit E - Solo Page

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[Use with Sales and Marketing Agreement]

EXHIBIT B

SALES AND MARKETING SERVICES TERRITOR(Y)(IES)

 

Exhibit B to Exhibit E - Solo Page

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EXHIBIT F

PROVISIONS TO BE INCLUDED IN SUBLICENSE AGREEMENT WITH NON-AFFILIATES FOR SALES,
MARKETING AND RELATED SERVICES

1. RIGHTS GRANTED.

Marriott Vacations Worldwide Corporation (“MVWC”) hereby grants to Sublicensee a
non-exclusive license to use the Licensed Mark(s) identified on Exhibit [__]
hereto and relevant aspects of the System, during the Term (defined below) of
this Sublicense Agreement, for the sole purpose of performing the Services.

2. USE AND OWNERSHIP OF LICENSED MARKS; QUALITY CONTROL.

A. All use of the Licensed Marks by Sublicensee under this Sublicense Agreement
shall inure to the benefit of The Ritz-Carlton Hotel Company, L.L.C.
(“Licensor”) and its affiliates. Licensor reserves the right to use and grant to
others the right to use all or part of the Licensed Marks, as may be applicable,
in connection with goods and services offered by Licensor, any of its affiliates
or others.

B. Nothing herein shall be construed to grant Sublicensee any right whatsoever
to use (except as provided herein) or license others to use the Licensed Marks
or any names, marks, logos, commercial symbols, or indicia of origin owned by
Licensor or its affiliates.

C. Sublicensee covenants and agrees that in no event will any employees,
contractors, or agents of Sublicensee or others retained by Sublicensee in
connection with its provision of the Services, identify themselves as employees
of, or as representing or speaking or acting for Licensor.

D. Sublicensee recognizes that Licensor and its affiliates are the sole and
exclusive owners of all right, title and interest of every kind and nature,
whether by statute or common law, in law or equity, which attach, inure, subsist
or exist in the Licensed Marks, including specifically the Licensed Marks and
all goodwill associated with the Licensed Marks.

E. Sublicensee agrees that it will not during the term of this Sublicense
Agreement or thereafter (i) contest the ownership rights or any other rights of
Licensor or its affiliates in and to the Licensed Marks, contest the validity of
the Licensed Marks or do anything either by an act of omission or commission
which might impair, jeopardize, violate, infringe or dilute the Licensed Marks;
(ii) claim adversely to Licensor, its affiliates or anyone claiming through
Licensor any right, title, or interest in and to the Licensed Marks; (iii) use
the Licensed Marks other than in the manner provided for in this Sublicense
Agreement; (iv) misuse or harm or bring into dispute the Licensed Marks;
(v) register or apply to register in any country of the world the Licensed Marks
or any other mark which is, in Licensor’s reasonable opinion, the same as or
confusingly similar to the Licensed Marks for the benefit of Sublicensee or any
other person or entity, directly or indirectly; (vi) use any other mark which in
Licensor’s opinion is confusingly similar to the Licensed Marks; or (vii) use
any of the Licensed Marks in its corporate name or trade name or seek to
register any corporate name or trade name containing any of the Licensed Marks.

F. Sublicensee agrees to cooperate fully and in good faith with Licensor and its
affiliates for the purpose of securing and preserving the rights of Licensor and
its affiliates in and to the Licensed Marks by executing all documents and
taking all other acts reasonably necessary to record, register, or otherwise
acknowledge the existence of this sublicense or the rights granted to
Sublicensee hereunder to use the Licensed Marks and by providing such consents,
cooperation, and other assistance as Licensor may reasonably request to perfect,
defend, and protect Licensor’s and its affiliates’ ownership of the Licensed
Marks. [If there is an expense associated with this section, the relevant terms
of the License Agreement between Licensor and MVWC will govern which bears the
expense, as between Licensor and MVWC.]

 

Exhibit F - Page 1

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G. Sublicensee shall promptly notify MVWC of any objection to its use of the
Licensed Marks or any unauthorized use or attempted use, by any other person,
firm or entity, of the Licensed Marks or any variations similar thereto, of
which it is aware. In the event Licensor undertakes the prosecution of any
litigation relating to the Licensed Marks, Sublicensee shall execute any and all
documents and do such acts and things as Licensor may reasonably request in
connection with such defense or prosecution.

H. Any act or omission which purports to create an interest in the Licensed
Marks in favor of Sublicensee, directly or indirectly, shall be considered a
material breach of this Sublicense Agreement and grounds for its immediate
termination, including restitution for any damage incurred. Any application or
registration by or on behalf of Sublicensee or its affiliates made in
contravention of the terms and conditions of this Sublicense Agreement which
would create in Sublicensee or any of its affiliates any right or interest, or
the appearance of any right or interest, with respect to the Licensed Marks,
shall be deemed to at all times to have been made solely and exclusively for the
benefit of Licensor or its affiliates, and Sublicensee and its affiliates
jointly and severally, do unconditionally and irrevocably assign to Licensor any
and all right, title, or interest that it may have or appear to have with
respect to the Licensed Marks.

I. Sublicensee shall at all times conduct its sales and marketing activities in
a high quality, professional and courteous manner so as not to dilute or damage
the image and reputation of high quality service symbolized by the Licensed
Marks. Sublicensee shall immediately cease any marketing or promotional activity
or practice that MVWC or Licensor determines is not in keeping with the
foregoing standards or otherwise not in accordance with the provisions of this
Sublicense Agreement.

3. CONFIDENTIALITY.

During the course of its engagement under this Sublicense Agreement, Sublicensee
may have access to Licensor Confidential Information (as defined in the
Ritz-Carlton License). Sublicensee will not, during the term hereof or
thereafter, without Licensor’s prior consent, which consent may be granted or
withheld in Licensor’s sole discretion, copy, duplicate, record, reproduce, in
whole or in part, or otherwise transmit or make available to any “unauthorized”
person or entity any Licensor Confidential Information or use the Licensor
Confidential Information in any manner not expressly authorized by this
Sublicense Agreement. Sublicensee may divulge such Licensor Confidential
Information only to such of Sublicensee’s employees or agents as require access
to it in order to provide the Services under this Sublicense Agreement, and only
if such employees or agents are apprised of the confidential nature of such
information before it is divulged to them and they are bound by confidentiality
obligations substantially similar to those listed above. All other persons or
entities are “unauthorized” for purposes of this Sublicense Agreement.
Sublicensee agrees that the Licensor Confidential Information has commercial
value and that Licensor and its affiliates have taken commercially reasonable
measures to maintain its confidentiality, and, as such, the Licensor
Confidential Information is proprietary and a trade secret of Licensor and its
affiliates. Licensee will be liable to Licensor for any breaches of the
confidentiality obligations in this Paragraph 3. by its employees and agents.
Licensee will maintain the Licensor Confidential Information in a safe and
secure location and will immediately report to Licensor and MVWC the theft or
loss of all or any part of the Licensor Confidential Information.

4. INSURANCE AND INDEMNIFICATION.

A. All insurance policies obtained or maintained by Sublicensee will by
endorsement specifically name as additional insureds Licensor, any affiliate of
Licensor designated by Licensor, and their employees.

B. Sublicensee will, and hereby does, indemnify and, at Licensor’s option,
defend Licensor and its affiliates, their officers, directors, agents and
employees, and their respective successors and assigns, from and against any and
all damages, claims, demands, suits, judgments, losses, or expenses (including
attorneys’ fees and litigation costs) of any nature whatsoever (including, but
not limited to, libel, slander, disparagement, defamation, copyright
infringement, trademark infringement, patent infringement, trade secret
infringement,

 

Exhibit F - Page 2

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invasion of privacy or publicity rights, piracy and/or plagiarism arising from
or related to any materials prepared by Sublicensee in connection with the
provision of the Services under this Sublicense Agreement, violation of consumer
protection rules, or any offerings of Sublicensee not consistent with this
Sublicense Agreement or applicable law), arising directly or indirectly from or
out of: (i) any act, error or omission of Sublicensee or its directors, invitees
or employees, agents, or contractors; and/or (ii) any occupational injury or
illness sustained by any employees, agents, or contractors of Sublicensee in
furtherance of the Services hereunder; and/or (iii) any failure of Sublicensee
to perform the Services hereunder in accordance with the highest generally
accepted professional standards; and/or (iv) any breach of Sublicensee’s
representations as set forth herein or in any other agreement related to the
provision of the Services; and/or (v) any other failure of Sublicensee to comply
with the obligation on its part to be performed hereunder or in any other
agreement related to the provision of the Services. The indemnification
contained herein shall extend to claims occurring after this Sublicense
Agreement has terminated as well as while this Sublicense Agreement is in force.

5. TERM AND TERMINATION.

A. The Term of this Sublicense Agreement begins on the Effective Date and
expires on the earlier of (i) the date on which Sublicensee’s authority to
perform the Services expires or terminates or (ii) the termination or expiration
of the Ritz-Carlton License.

B. MVWC shall have the right to terminate this Sublicense Agreement immediately
upon written notice to Sublicensee in the event of Sublicensee’s material breach
of this Sublicense Agreement.

6. RIGHTS AND OBLIGATIONS UPON EXPIRATION OR TERMINATION.

Upon the expiration or termination of this Sublicense Agreement, all rights
herein granted to Sublicensee shall end, and Sublicensee shall immediately cease
all use of the Licensed Marks and System.

7. ASSIGNMENT.

A. This Sublicense Agreement is personal to Sublicensee, and Sublicensee may not
sell, assign or otherwise transfer this Sublicense Agreement or any interest
herein or any ownership interest in Sublicensee, or delegate any of its
obligations hereunder, without MVWC’s prior written consent, which MVWC may
grant or withhold in its sole discretion. Any such attempted transfer shall be
void and shall constitute a material breach of this Sublicense Agreement.

B. MVWC may sell, assign or otherwise transfer this Sublicense Agreement in
accordance with the terms of the Ritz-Carlton License.

8. LICENSOR AS THIRD-PARTY BENEFICIARY.

MVWC and Sublicensee agree that to the extent permitted under Applicable Law,
Licensor and its affiliate are third party beneficiaries of this Sublicense
Agreement, and it is intended by MVWC and Sublicensee that Licensor and its
affiliates will be entitled to enforce this Sublicense Agreement. MVWC and
Sublicensee further agree that Licensor and its affiliates are not liable for
and does not assume any duties, obligations or liabilities under this Sublicense
Agreement unless agreed to in writing by Licensor and its affiliates, as
applicable. Sublicensee acknowledges and agrees that (i) its obligations
hereunder (including payment obligations) with respect to the Services are
primary obligations; (ii) that Licensor and its affiliates may pursue
Sublicensee directly to enforce the such obligations, and (iii) that Licensor
and its affiliates are not required to proceed against MVWC or any Guarantor (as
defined in the Ritz-Carlton License) before proceeding against Sublicensee with
respect to the enforcement of such obligations.

 

Exhibit F - Page 3

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EXHIBIT G

DESIGN REVIEW ADDENDUM

This Design Review Addendum (“Addendum”) is a part of and is incorporated into
that certain License, Services, and Development Agreement dated effective
November 19, 2011 (hereinafter referred to as the “License Agreement”) by and
between The Ritz-Carlton Hotel Company, L.L.C. (“Licensor”), and Marriott
Vacations Worldwide Corporation (“Licensee”).

RECITALS

A. Pursuant to the terms of the License Agreement, Licensee has been granted a
license to operate the Destination Club Business and Whole Ownership Residential
Business by developing, selling, marketing, operating and financing Destination
Club Projects and Residential Projects (each, a “Project”); and

B. Licensee and Licensor intend for each New Project and the refurbishment, or
renovation of Existing Projects, to be designed, constructed, renovated and
refurbished in accordance with the Design Standards and the review process
described in this Addendum; and

C. Licensee desires to engage Licensor to provide certain review services during
the planning, development and operation phases of Projects for the purpose of
assuring compliance with the Design Standards, and Licensor desires to provide
such services to Licensee upon the terms set forth in this Addendum.

NOW, THEREFORE, Licensee and Licensor, in consideration of the foregoing and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, agree as follows:

ARTICLE 1

DEFINITIONS AND GENERAL MATTERS

1.1 Definitions. All capitalized terms not defined in this Addendum shall have
the meanings ascribed to them in the License Agreement, which is incorporated
herein by this reference. In this Addendum, the following terms have the
following meanings:

“Addendum” shall mean this Design Review Addendum, including the exhibits
attached hereto, as it may be amended, restated or supplemented from time to
time.

“Audio/Visual Systems” shall include, but not be limited to, the following
systems: general audio and visual systems, entertainment audio/video systems and
video information systems.

“Decorative Items” shall include, but not be limited to, artifacts, artwork,
carpeting, decorative lighting fixtures, etched glass, furniture, graphics,
interior landscaping, radios, televisions and window treatments.

“Design Standards” shall mean the Ritz-Carlton Destination Club Design Standards
(modules) which may be updated and amended on a periodic basis in accordance
with the terms of the License Agreement.

 

Exhibit G - Page 1

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

“Project Request Date” shall mean the date upon which Licensee provides Licensor
a Project Approval Request for a particular Project.

“Existing Project” shall mean a Project that has received Licensor’s approval
prior to the Project Request Date. A “New Project” will become an “Existing
Project” for purposes of the reviews required by this Addendum upon receipt of
final approval from Licensor for the opening thereof. Existing Projects shall
not include any Project that has ceased to be a Licensed Project.

“Facilities Program” shall have the meaning ascribed to it in Section 2.1.2.

“FF&E” shall mean furniture, fixtures and equipment, including without
limitation: Decorative Items; Audio/Visual Systems; in-unit kitchen appliances,
refrigerators and minibars; cabinetry; computer equipment; Food/Kitchen
Equipment; Laundry Equipment; Housekeeping Equipment; Telecommunications
Systems; and Security Systems.

“Fixed Asset Supplies” shall mean items included within “Operating Equipment”
under the Uniform System of Accounts that may be consumed in the operation of
the Project or are not capitalized including, but not limited to, linen, china,
glassware, tableware, uniforms and similar items used in the operation of the
Project.

“Food/Kitchen Equipment” shall include, but not be limited to, all food
preparation, cooking and holding equipment; exhaust hoods and hood fire
protection systems; general storage layout, refrigerators and freezers
(including coils, condensers and compressors); ice-making, beverage dispensing
and other food and beverage equipment; dishwashing equipment (except any glass
washer included in Housekeeping Equipment); and similar items used in the food
and beverage service operation of the Project.

“Housekeeping Equipment” shall mean equipment items to be used by Project
employees for cleaning the Project on a regular basis.

“Inventories” shall mean “Inventories” as defined in the Uniform System of
Accounts, such as, but not limited to, provisions in storerooms, refrigerators,
pantries and kitchens; beverages in wine cellars and bars; other merchandise
intended for sale; fuel; mechanical supplies; stationery; and other expensed
supplies and similar items.

“Laundry Equipment” shall mean washers, washer/extractors, dryers, chest-type
ironers, steam boiler, thermal fluid heater for ironer, lint control devices,
linen folders, linen carts, dry cleaning equipment (if required), laundry sinks,
air compressors, laundry scales and similar items used in the laundry operation
of the Project.

“Licensee” shall have the meaning ascribed to it in the preamble to this
Addendum or shall mean any successor or permitted assign, as applicable.

“License Agreement” shall have the meaning ascribed to it in the preamble to
this Addendum, as such agreement may be amended, restated or supplemented from
time to time.

“Licensor” shall have the meaning set forth in the preamble to this Addendum or
shall mean any successor or permitted assign, as applicable.

“Model Unit” shall have the meaning ascribed to it in Section 2.4.2.

 

Exhibit G - Page 2

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“Opening Date” shall mean the first (1st) day on which a Project (or phase
thereof) is open for overnight accommodation for owners and guests.

“Plans” shall have the meaning ascribed to it in Section 2.3.1.

“Project” shall have the meaning ascribed to it in the Recitals.

“Project Approval Request” shall have the meaning ascribed to it in Section 1.2.

“Project Related Areas” shall mean all facilities that are part of the Project,
but outside the Project, which: (i) connect to or are directly accessible to the
Project; (ii) provide services to the Project; and/or (iii) would normally be
incorporated as part of a free-standing project.

“Project Systems” shall include, but not be limited to, software, hardware,
cabling and all other items necessary for a computer; Audio/Visual Systems;
management systems; front office, back office and accounting management systems;
sales and reservations systems; timekeeping and payroll systems; point-of-sale
systems, including food, beverage and retail functions; food and beverage
inventory systems; engineering software; and word processing and other personal
computer applications.

“Refurbishment Review Waiver Request” shall mean a request by Licensee for
Licensor to waive the requirements of Article 3 due to the scope of the
refurbishment activities planned for a particular Project. Refurbishment Review
Waiver Requests shall be delivered to Licensor in writing and provide sufficient
detail regarding the activities and Project scope for which Licensee is seeking
a waiver. The intent behind this mechanism is to permit minor renovations and
refurbishments to occur without the cost and time associated with the review
process outlined in Article 3.

“Security Systems” shall mean video surveillance equipment; two-way radio
systems; inspection tour recording systems; security alarm systems; access
control systems (pedestrian and vehicular); and other special security systems
required for the Project.

“Site” shall mean the parcel of land upon which the Project is located.

“Substantial Completion” shall mean: (i) substantial completion of the Project
in conformance, in all material respects, with the Plans, Design Standards and
the requirements of this Addendum (other than minor punchlist items, which will
not individually or in the aggregate impair the use of the Project for its
intended use, or impair the Project owners’ and guests’ experience); (ii) the
provision of all Fixed Asset Supplies and Inventories and installation of the
FF&E and Project Systems as required for the operation of the Project; provided,
however, that if Licensee contracts with Licensor or an affiliate of Licensor to
procure FF&E and/or Fixed Asset Supplies required for the operation of the
Project, and Licensor or such affiliate is in default under the terms of such
procurement contract, such FF&E and/or Fixed Asset Supplies shall not be
required for Substantial Completion of the Project; and (iii) Licensee has
obtained required permits as set forth in Section 2.4.4 necessary for the
opening of the Project.

“Technical Services Fee” shall have the meaning ascribed to it in Article 5.

“Telecommunications Systems” shall mean PBX, phone systems, call accounting and
pocket paging systems, and high-speed Internet access.

“Termination” shall mean the expiration or sooner cessation of this Addendum.

 

Exhibit G - Page 3

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“Variance Notice” shall mean a separate written statement provided by Licensee
to Licensor concurrently with Licensee’s submittals to Licensor pursuant to
Article 2 and Article 3, which statement shall detail all variances from the
Plans or Design Standards contained in the relevant submittal. The Variance
Notice shall also include a description of the rationale for the variance from
the Design Standards.

1.2 Initiating the Review of a Project. To initiate Licensor’s review of work to
be performed in connection with a New Project or Existing Project, Licensee
shall submit to Licensor a memorandum describing the overall scope of the
Project along with a detailed description of the new construction, renovation or
refurbishment work for which Licensee is seeking approval from Licensor (the
“Project Approval Request”). The Project Approval Request should provide
specific contact information for a representative of Licensee through whom
Licensor may coordinate activities pursuant to this Addendum, provide a
narrative of the work contemplated to be performed, a description of the Site,
identify the Project as a New Project or an Existing Project, and include a
preliminary schedule for the work to be performed. Unless an alternative date is
agreed upon by the parties, within fifteen (15) days of receipt of the Project
Approval Request, representatives of Licensee and Licensor shall hold a
“kick-off meeting” to discuss the details surrounding the Project, the scope of
services to be provided by Licensor (e.g., shared services, on site management,
integration with adjoining resort) and other items the parties deem relevant.
Unless an alternative location is mutually agreed upon by the parties, the
kick-off meeting shall be held at the corporate headquarters of Licensor in
Chevy Chase, Maryland. The date upon which the Project Approval Request is
submitted to Licensor shall be considered the “Project Request Date” for the
subject Project.

1.3 Review of Projects and Scope of Addendum. It is acknowledged that the terms
of this Addendum shall apply to a variety of project types and undertakings,
each one of which will be categorized as a New Project or an Existing Project
for purposes of review for compliance with the Design Standards. The category of
the Project will determine the process for review necessary to obtain the
approval of Licensor. New Projects may include new construction (ground-up), the
addition of a phase at an Existing Resort (which has not been previously
approved by Licensor), or the conversion of a previously existing property to a
Project. New Projects undergo a thorough review in accordance with Article 2 of
this Addendum to assure they comply with the Design Standards. Existing Projects
routinely go through renovations and refurbishment processes which require an
abbreviated review of the undertakings as described in Article 3 of this
Addendum.

1.4 Licensee Representative and Approval of Consultants. As soon as reasonably
possible after the Project Request Date, but in no event later than thirty (30)
days thereafter, Licensee shall provide Licensor with the names and other
information reasonably requested by Licensor related to the Licensee’s
architect, interior designers and other consultants providing services to the
subject Project.

ARTICLE 2

TECHNICAL SERVICES FOR NEW PROJECTS

2.1 New Project Conceptual and Schematic Design Phase

2.1.1 Preliminary Information. Licensor and Licensee shall confirm the then
current version of the Design Standards for use by Licensee’s design team, along
with other information describing the standards that Licensor requires for the
Project and Project Related Areas, as appropriate for the Project. All Plans for
the Project shall incorporate the parameters described in the Design Standards.

 

Exhibit G - Page 4

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2.1.2 Schematic Design Phase. Based upon, and incorporating the information
provided in the materials described in Section 2.1.1 and the kick-off meeting
described in Section 1.2, Licensee shall prepare or cause to be prepared and
submitted to Licensor for approval: (i) a facilities program (“Facilities
Program”) describing the space requirements for all areas of the Project and the
Project Related Areas (e.g., public spaces, kitchen, laundry, back office,
etc.); (ii) a listing of each operating function of the Project and the
as-designed areas, and other documents reasonably necessary to represent the
size, layout and quality of the Project; (iii) a colored vicinity/location map
indicating vehicular traffic directions, ingress and egress points and major
surrounding developments and transportation centers; (iv) a site plan showing
all site elements and proposed landscaping; (v) floor plans, showing all spaces
listed in the Facilities Program; (vi) unit layouts, indicating all bath
fixtures, in-unit kitchen equipment (if applicable), closets, balconies and
other major features; (vii) building elevations and sections, showing exterior
materials, details and colors; (viii) a rendered perspective drawing of the
Project; and (ix) a sample board showing the proposed exterior materials. Such
materials may also include a rendering and preliminary architectural plans of
the Project Related Areas, as reasonably requested by Licensor, and a Variance
Notice, if applicable. Unless an alternative location is mutually agreed upon by
the parties, the presentation of the conceptual and schematic design submittal
shall be made by Licensee’s representatives in Chevy Chase, Maryland at the
corporate headquarters of Licensor. Licensee will revise and amend the schematic
design submittals as may be necessary to obtain Licensor’s approval.

2.2 New Project Design Development Phase

2.2.1 Design Development Phase. Licensee shall, based upon incorporating the
approvals described in Section 2.1.2, prepare or cause to be prepared in
accordance with the Design Standards a design development submittal which may
include the following: (i) a Project description and as-designed space
utilization program; (ii) development plans and specifications for the Project,
Site and related facilities; (iii) interior designer’s plans, furniture layouts,
reflected ceiling plans, interior elevations, wall sections, materials, lighting
and color schemes; (iv) interior designer’s and mechanical engineer’s
coordinated design of HVAC distribution; (v) interior designer’s and electrical
engineer’s coordination of lighting and emergency lighting and alarm systems;
(vi) a review of lighting layouts for such areas including specific fixture
selection and recommendations on and specifications of dimmer equipment; and
(vii) engineering drawings indicating locations and sizes of necessary
mechanical connections for Food/Kitchen Equipment, Housekeeping Equipment and
Laundry Equipment. All such plans and a Variance Notice, if applicable, shall be
submitted to Licensor for approval.

2.2.2 Interior Design. Prior to submission, or as part of the plans submitted
pursuant to Section 2.2.1, Licensee shall submit to Licensor for review and
approval: (i) interior design plans, including floor plans, reflected ceiling
plans, elevations, sections and renderings that are reasonably necessary to
adequately explain the design intent of the Project’s public spaces (which, upon
approval, shall become part of the Plans); (ii) display boards of fabrics,
carpets, furnishings, finishes, paints, lighting design guidelines (e.g.,
fixtures, chandeliers, sconces, etc.) and other materials for each Project space
designated by Licensor; and (iii) a Variance Notice, if applicable. Upon request
of Licensor and agreement by the parties of the date and location of such
presentation, Licensee shall present these materials to Licensor for approval of
the interior design of the Project, and Licensee shall revise and amend such
presentation materials as required to obtain final approval of the interior
design by Licensor.

2.3 New Project Construction Document Phase

2.3.1 Final Design Phase. Upon Licensor’s approval of the items submitted by
Licensee pursuant to Section 2.2, and based upon the designs therein approved by
Licensor, Licensee shall cause Licensee’s architect to produce final plans,
specifications and complete construction drawings

 

Exhibit G - Page 5

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(including, without limitation, architectural, electrical, plumbing, HVAC,
structural, civil engineering, life safety, and landscape drawings for the
Project and Project Related Areas) (collectively, the “Plans”), which shall be
properly sealed by Licensee’s architect. The Plans shall: (i) incorporate the
Design Standards into the Project and Project Related Areas; and
(ii) incorporate all legal requirements applicable to the design, construction
and operation of the Project and the Project Related Areas.

The Plans and a Variance Notice, if applicable, shall be submitted to Licensor
for approval at least thirty (30) days prior to commencement of construction of
the Project and Project Related Areas., Licensee may submit the Plans at the
time they are 30%, 60% and 90% complete for comment and approval by Licensor.

Following Licensor’s approval of the Plans, no change in such Plans shall be
made that materially affects the design, construction, operation, or aesthetics
of the Project or any of the Project Related Areas (as related to the scope of
Licensor’s approval of such areas), without the prior approval of Licensor.

2.3.2 Systems. In accordance with the approved schedule for the Project,
Licensee shall provide to Licensor: (i) general concepts for food and beverage
facilities, including without limitation point of sale systems; (ii) the
locations of security devices, and their specifications, installation details,
power and space requirements; and (iii) the locations and types of
Telecommunication Systems.

2.3.3 Decorative Items. Upon Licensor’s approval of the interior design
materials submitted pursuant to Section 2.2.2 and incorporating the information
provided to Licensee as set forth above, Licensee shall prepare or cause to be
prepared for Licensor’s approval, documents reasonably describing the Decorative
Items to be installed in the Project, and a Variance Notice, if applicable. Such
information shall include the description, quantity, product specification,
photograph (when appropriate), installed location and other pertinent
information about the Decorative Items.

2.4 New Project Construction Phase

2.4.1 Construction of Project, Observations. Licensee shall construct, furnish
and equip (or cause to be constructed, furnished and equipped) the Project and
the Project Related Areas in accordance with the Design Standards and the Plans
that have been previously approved by Licensor. During the course of
construction, Licensee shall cooperate with Licensor for the purpose of
permitting Licensor to observe from time to time, the construction of the
Project and the Project Related Areas as it proceeds to determine whether
construction is proceeding in accordance with the Design Standards and the
approved Plans. In particular, Licensor may visit the Site at such intervals as
Licensor deems reasonably necessary (which intervals shall include certain
milestone events described on Exhibit A). Licensee shall give Licensor at least
fifteen (15) days’ notice prior to each of the events described in Exhibit A in
order to enable Licensor to schedule its visit(s). However, the parties agree
that despite its right to observe the construction pursuant to this
Section 2.4.1, Licensor shall not be obligated to observe the construction of
the Project or the Project Related Areas unless otherwise specified on Exhibit
A. It is understood and agreed that Licensor is providing no construction
management services, and that construction management shall be the sole
responsibility of Licensee. To the extent that Licensor reasonably determines
and provides notice to Licensee thereof that the Project, or the Project Related
Areas, as constructed, furnished or equipped do not conform to the Design
Standards confirmed in Section 2.1.1, or to the approved Plans, Licensee shall
promptly correct or cause to be corrected such nonconforming work.

 

Exhibit G - Page 6

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2.4.2 Model Units. Prior to construction of the Project, Licensee shall
construct a model unit (“Model Unit”) for review and approval by Licensor, such
review and approval to include: (i) compliance with the Design Standards;
(ii) the level of fit, finish and quality appearing in the units and the general
arrangement of the unit; and (iii) FF&E installed in the Model Unit. Upon
receipt by Licensor of written notice from Licensee of completion of the Model
Unit, Licensor shall have thirty (30) days in which to review and approve the
Model Unit. If Licensor disapproves any portion of any Model Unit, Licensor
shall provide detailed written objections and describe the required changes to
such Model Unit that would be required to satisfy the Design Standards and
obtain the approval of Licensor. Upon receipt by Licensee of written notice from
Licensor that the Model Unit has been approved, Licensee shall construct,
furnish and equip (or cause to be constructed, furnished and equipped) the
Project in accordance with the level of fit, finish and quality appearing in,
the general arrangement of, and the FF&E installed in, the approved Model Unit.

2.4.3 Shop Drawings & Submittal Reviews. Licensee shall submit to Licensor, for
its approval, shop drawings, product data and samples generated by contractors
or vendors (the “Submittals”), in accordance with the list of Submittals
attached as Exhibit B.

2.4.4 Permits. Licensee shall be responsible for obtaining (or causing to be
obtained) all permits and other approvals required for construction and
operation of the Project, such as the building permit, occupancy permit,
elevator permits, occupational licenses, liquor licenses and others for the
Project and Project Related Areas.

2.4.5 Documents Upon Completion of Construction. Upon completion of construction
of the Project, Licensee shall submit to Licensor: (i) an architect’s
certification that the Plans comply with all applicable legal requirements and
that the Project has been constructed and completed in accordance with the Plans
approved by Licensor; and (ii) a copy of the temporary or, if available,
permanent certificate of occupancy for the Project. A copy of the permanent
certificate of occupancy for the Project should be provided to Licensor by no
later than thirty (30) days after receipt by Licensee.

ARTICLE 3

TECHNICAL SERVICES FOR EXISTING PROJECTS

3.1 Existing Project Refurbishment Conceptual and Schematic Design Phases

3.1.1 Preliminary Information. Licensor and Licensee acknowledge that it will
become necessary to make certain renovations and undertake certain
refurbishments to Existing Projects. Accordingly, Licensor and Licensee shall
confirm the then current version of the Design Standards for use by Licensee’s
design team for the planning and design of such renovation and refurbishment
activities. Unless a Refurbishment Review Waiver has been requested by Licensee,
and approved by Licensor, all Plans for the renovation and refurbishment of an
Existing Project shall incorporate the parameters described in the Design
Standards and be evaluated based on the process described in this Article 3.
Prior to commencing such renovation or refurbishment activities, representatives
of Licensor and Licensee shall meet at the subject Existing Project for an
initial review thereof. Licensor representatives shall cooperate with Licensee
to agree upon conceptual refurbishment and renovation activities that will
comply with the Design Standards.

3.1.2 Schematic Design Phase. Licensee shall, based upon and incorporating the
information provided in accordance with Section 3.1.1, prepare or cause to be
prepared and present to Licensor for approval, a conceptual design submittal
that may include the following: a description of the proposed refurbishment or
renovation plans; rendering and preliminary architectural plans; display boards
of fabrics, carpets, furnishings, finishes, and paints; lighting design
guidelines (e.g., fixtures, chandeliers, sconces, etc.); other materials
proposed to be incorporated into the Project; and a Variance Notice, if
applicable. Unless an alternative location is mutually agreed upon by the
parties, the presentation of the conceptual and schematic design presentation
shall be made by Licensee’s representatives at the corporate headquarters of
Licensor in Chevy Chase, Maryland.

 

Exhibit G - Page 7

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3.1.3 Decorative Items. Upon Licensor’s approval of the interior design
materials submitted pursuant to Section 3.1.2 and incorporating the information
provided to Licensee as set forth above, Licensee shall prepare or cause to be
prepared for Licensor’s approval documents reasonably describing the Decorative
Items to be installed in the Project and the installation locations or details
therefor, and a Variance Notice, if applicable. Such information may include the
description, quantity, recommended manufacturer and model number, product
specification, photograph (when appropriate), installed location and other
pertinent information about the Decorative Items.

3.2 Existing Project Refurbishment Construction Phase

3.2.1 Renovation and Refurbishment of Existing Project, Observations. Licensee
shall renovate, refurbish, furnish and equip (or cause to be renovated,
refurbished, furnished and equipped) the Project and the Project Related Areas
in accordance with the Design Standards and the Plans that have been previously
approved by Licensor. During the course of such activities, Licensor shall visit
the Project to assure compliance with the Design Standards and prior approvals.
To the extent that Licensor determines that the Project, or the Project Related
Areas, as renovated or refurbished, furnished or equipped do not conform to the
Design Standards in place at the time the Project was reviewed by Licensor,
Licensor shall promptly notify Licensee of such nonconformity in writing and
Licensee shall promptly correct (or cause to be corrected) such nonconforming
work.

3.2.2 Permits. Licensee shall be responsible for obtaining (or causing to be
obtained) all permits and other approvals required for renovation and
refurbishment of the Project, such as the building permit, occupancy permit,
elevator permits, occupational licenses, liquor licenses and others for the
Project and Project Related Areas.

ARTICLE 4

APPROVALS AND VARIANCES

4.1 Requests for Approval

4.4.1 Requests for Approval. Wherever in this Addendum the consent or approval
of Licensor or Licensee is required, such consent or approval unless otherwise
noted shall not be unreasonably withheld, delayed or conditioned, shall be in
writing and shall be executed by a duly authorized officer or agent of the party
granting such consent or approval. If either Licensor or Licensee fails to
respond within fifteen (15) days to a request by the other party for a consent
or approval, the other party shall provide notice to the nonresponsive party of
its failure, and such party shall respond within five (5) days or such consent
or approval shall be deemed to have been given, except (i) as otherwise
expressly provided in this Addendum, or (ii) in the case of consents or
approvals that may be granted or withheld in the sole discretion of a party, in
which case a failure to respond shall be deemed to be a withholding of consent
or approval. Upon obtaining approval from Licensor, Licensee may rely on such
approval for purposes of advancing design, renovation, refurbishment and
construction activities.

In the event Licensor disapproves a request for approval by Licensee, Licensor
shall provide detailed written objections and describe the required changes to
such request that are necessary to obtain the approval of Licensor.

 

Exhibit G - Page 8

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4.4.2 Licensor’s Approval of Variances. Licensee acknowledges that Licensor
will, in its review process, provide comments on the plans and specifications.
Such reviews do not relieve Licensee and its consultants of their responsibility
with regard to determining the completeness of subsequent documents and
compliance with the Design Standards. Licensee acknowledges that an approval by
Licensor at any stage does not constitute an approval of a variation in Plans or
Design Standards unless a Variance Notice covering the deviation has been
properly submitted by Licensee and accepted by Licensor in writing.

4.4.3 Nonconformity. To the extent that Licensor determines that the Project as
constructed, renovated or refurbished, furnished or equipped does not conform to
the Design Standards agreed to by the parties consistent with this Addendum, or
to the approved Plans, Licensor shall provide written notice thereof to Licensee
providing a detailed description of such nonconformity. Upon receipt of such
notice, Licensee shall promptly (i) correct (or cause to be corrected) such
nonconforming work, (ii) commence and diligently pursue a correction to such
nonconforming work, or (iii) provide Licensor with adequate assurances that such
nonconforming work will be promptly remedied within thirty (30) days after
receipt of written notice from Licensor.

ARTICLE 5

TECHNICAL SERVICES FEE

5.1 Technical Services Fee. Licensee shall pay to Licensor a fee for services
rendered pursuant to this Addendum in accordance with the schedule of fees
attached hereto as Exhibit C and incorporated herein by this reference.

ARTICLE 6

OPENING DATE

6.1 Opening Date. The Opening Date shall in no event be earlier than the date on
which all of the following have occurred: (i) all licenses, permits, and other
approvals and instruments necessary for operation of the Project (or phase
thereof) have been obtained, and (ii) on the Opening Date there will be no
ongoing construction on any portion of the Project (or phase thereof) that would
materially adversely limit, restrict, disturb or interfere with the experience
of the Project owners and guests. If, as of the Opening Date, there remain to be
completed minor unfinished punchlist items or installation of incidental FF&E
and Fixed Asset Supplies in the common areas, lobby, administrative offices or
any units to be opened on the Opening Date, none of which preclude Licensee from
operating the Project (or phase thereof) in accordance with the Design
Standards, the Opening Date shall not be delayed for such reasons; however,
Licensee shall be obligated to promptly finish such items pursuant to the
requirements of this Addendum.

ARTICLE 7

INSURANCE

7.1 Insurance Required. At all times during the construction of the Project
(where a certificate of occupancy has not been issued) during such construction
or such later date as indicated below, Licensee shall, at its expense, procure
and maintain (or cause its general contractor to procure and maintain) insurance
protecting Licensee and Licensor against loss or damage arising out of or in
connection with the construction of the Project.

 

Exhibit G - Page 9

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1. Such insurance shall, at minimum include:

(a) Commercial general liability insurance in an amount not less than One
Million Dollars ($1,000,000) per each occurrence with a general aggregate limit
of not less than Two Million Dollars ($2,000,000). Such insurance shall include,
but is not limited to, the following coverages or endorsements:

 

  •  

Independent Contractors Liability

 

  •  

For any time-share Project that is developed or marketed in the United States
including United States Territories and for any Project developed or marketed in
jurisdictions in which there may be liability for construction defects,
Products/Completed Operations Liability (construction defect) to be maintained
for (i) three (3) years after the date of substantial completion of the Project
or issuance of a certificate of occupancy for the Project, whichever is later.
If a jurisdiction requires procurement of completed operations coverage or
equivalent coverage, then such coverage will be procured as required by
applicable law.

 

  •  

For any residential or fractional Project that is developed or marketed in the
United States including United States Territories and for any Project developed
or marketed in jurisdictions in which there may be liability for construction
defects, Products/Completed Operations Liability (construction defect) to be
maintained for (i) ten (10) years after the date of substantial completion of
the Project or issuance of a certificate of occupancy for the Project, whichever
is later, or (ii) such time frame as may be required to cover the statutory time
frame for construction defects in the state or country where the Project is
located. If such coverage is provided by the general contractor, evidence of
insurance shall be provided for the entire statutory time frame.

 

  •  

Explosion, Collapse and Underground Coverage

(b) Business auto liability including owned, non-owned and hired vehicles, with
combined single limits for bodily injury and property damage in an amount not
less than One Million Dollars ($1,000,000) per each occurrence.

(c) Umbrella or excess liability, on a following form, in an amount not less
than:

 

  a. Two Million ($2,000,000) Dollars per occurrence for projects with
construction value equal to or less than $500,000 and the Project is not
occupied

 

  b. Four Million ($4,000,000) Dollars per occurrence for projects with
construction value of $500,001 to $1,000,000 or if under $500,000 and the
Project is occupied

 

  c. Nine Million ($9,000,000) Dollars per occurrence for projects with
construction value of $1,000,001 to $10,000,000;

 

  d. Fourteen Million ($14,000,000) per occurrence Dollars for projects with
construction value of $10,000,001 to $20,000,000;

 

  e. Nineteen Million ($19,000,000) Dollars per occurrence for projects with
construction value of $20,000,001 to $50,000,000;

 

Exhibit G - Page 10

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  f. Such greater amount as is reasonably determined by Licensor and Licensee
where the total project construction costs are greater than Fifty Million
Dollars ($50,000,000).

Such coverage shall be in excess of the insurance required under
Section 7.1.A.1(a), Section 7.1.A.1(b), and the employers liability required
under Section 7.1.A.1(f). The general aggregate shall apply in total to this
Project only if coverage is provided by a general contractor and shall be
reinstated annually during construction. Upon the latest to occur of substantial
completion of the Project or the issuance of a certificate of occupancy for the
Project, the coverage shall specifically include the completed operations
liability (construction defects) in the amounts required under this
Section 7.1.1.

(d) Builders risk insuring such risks as commonly covered by an “all risk of
physical loss” form on a replacement cost basis covering equipment to be
installed in, and supplies to be used at, the Project and all Project related
areas, including contractors’ supplies, tools and equipment.

(e) Workers’ compensation insurance covering all of Licensee’s, its general
contractors’, its subcontractors’ and its consultants’ employees, in statutory
amounts and employers’ liability of not less than One Million
Dollars ($1,000,000) for each accident.

7.2 General Provisions.

A. All insurance policies required under Section 7.1.A.1 .(a) and (b) shall
include Licensor and its Affiliates as additional insureds. Licensee shall
deliver to Licensor, upon commencement of construction of a Project,
certificates of insurance, and if so requested copies of the insurance policies
in the event of a claim, with respect to all policies required pursuant to
Section 7.1 and, in the case of insurance policies about to expire, shall
deliver certificates with respect to renewals thereof. If commercially
available, such policies of insurance shall be endorsed to provide that the
insurance shall not be canceled without at least thirty (30) days’ prior written
notice to the certificate holder. For all the above coverages, Licensee shall,
and shall cause the general contractor and all subcontractors to, waive their
respective rights of recovery and its insurers’ rights of subrogation against
Licensor and such coverage shall be primary and non-contributory to any other
coverages Licensor may carry.

B. Licensee’s obligation to maintain the insurance hereunder will not relieve
Licensee of its obligations under any indemnification under this Agreement or
the License Agreement. As required by Licensor on similar projects, Licensor
reserves the right to review the insurance coverages and limits from time to
time and require increases or amendments to the insurance outlined in 7.1 based
on competitive terms and conditions in the jurisdiction of the Project. Such
requirements shall be mutually agreed by Licensor and Licensee, but in no event
shall the changes be less than those required by Licensor on similar projects.

ARTICLE 8

MISCELLANEOUS

8.1 Relationship. In the performance of this Addendum, Licensor shall act solely
as an independent contractor. This Addendum shall in no respect be interpreted,
deemed or construed as making Licensor a partner, joint venturer with, or agent
of, Licensee.

 

Exhibit G - Page 11

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8.2 Third-Party Rights. Nothing herein shall be construed to give any rights or
benefits hereunder to any person or entity, other than Licensee or Licensor, and
the rights of third-party beneficiaries are hereby expressly negated.

8.3 Headings; Section References. The headings of Sections herein are inserted
for convenience only and are in no way intended to describe, interpret, define
or limit the scope or content of this Addendum or any provision hereof. All
references to Articles, Sections, paragraphs, clauses, exhibits, or addenda
shall refer to the corresponding Article, Section, paragraph, clause of or
exhibit or addendum attached to this Addendum unless otherwise specified.

8.4 Waiver. The failure of either party to insist upon a strict performance of
any of the terms or provisions of this Addendum, or to exercise any option,
right or remedy contained in this Addendum, shall not be construed as a waiver
or as a relinquishment for the future of such term, provision, option, right or
remedy, but the same shall continue and remain in full force and effect. No
waiver by either party of any term or provision hereof shall be deemed to have
been made unless expressed in writing and signed by such party.

8.5 Partial Invalidity. If any portion of any term or provision of this
Addendum, or the application thereof to any person or circumstance shall be
invalid or unenforceable, at any time or to any extent, the remainder of this
Addendum, or the application of such term or provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each term and provision of this Addendum
shall be valid and be enforced to the fullest extent permitted by law.

8.6 Engagement of Third Party Consultants. Licensor may, at its own cost, engage
third party consultants to perform some of its services under this Addendum.

 

Exhibit G - Page 12

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EXHIBIT A

TO

DESIGN REVIEW ADDENDUM

MILESTONE EVENTS

Licensor will visit the Site for the purpose of performing its obligations under
the Addendum at approximately the following times unless otherwise noted:

Commencement of metal stud installation in units.

**Completion of the Model Unit (fully finished and furnished).

**Licensee’s kickoff meeting with the fire and life safety contractor

**After fire life safety equipment has been installed but prior to
drywall/sheetrock.

Commencement of public space finishes.

Commencement of furniture installation.

**Final Acceptance.

In addition to the above-described milestone events, Licensor may visit the Site
to observe the construction of the Project and Project Related Areas at such
intervals as Licensor deems reasonably necessary.

 

** Indicates mandatory visit to the Project by the appropriate Licensor
representative to participate in activities associated with milestone.

 

Exhibit A to Exhibit G - Solo Page

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EXHIBIT B

TO

DESIGN REVIEW ADDENDUM

SUBMITTALS

REQUIRED SUBMITTAL FORM:

* Sample / ** Shop drawing / ***             Manufacturers literature

DIVISION 5

Decorative Metal work (bar rail, wall trim, grills, etc.) **/***

DIVISION 6

Millwork, paneling, trim casework */**

DIVISION 7

Exterior finish materials and colors *

DIVISION 8

Public Space and Guest Unit doors and Hardware ***

Storefront including entrance and revolving doors ***

DIVISION 9

All finish material

(Interior Design installation drawings, specifications and sample/color book) *

DIVISION 10

Building signs **

Interior graphics */**

DIVISION 11

Front desk equipment ***

Kitchen and laundry equipment ***

DIVISION 12

All furniture, fabric and upholstery */**

DIVISION 13 — NA

DIVISION 14

Elevator cab interiors */**

Elevator equipment **/***

DIVISION 15

Major mechanical equipment & controls including:

Boilers, chillers, cooling tower, air handlers & pumps **/***

Mechanical room layout **

Fire Protection Systems ***/**

- Any exceptions to approved Design Documents

 

Exhibit B to Exhibit G- Page 1

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DIVISION 16

Fire Protection Systems **/***

- Any exceptions to approved Design Documents

 

Exhibit B to Exhibit G - Page 2

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EXHIBIT C

TO

DESIGN REVIEW ADDENDUM

TECHNICAL SERVICES FEE

Review Categories

   Review Fees  

New Projects and Conversions of Existing Projects

   $ 80,000   

Refurbishment/Renovation of Existing Projects

  

Soft Goods Refurbishment Review

   $ 6,000   

Refurbishment/renovation Projects In Excess of Soft Goods Update

   $ 15,000   

The review fees (“Review Fees”) shall be billed by Licensor to Licensee on a
lump sum basis as indicated for each review category identified above. Licensee
shall pay the Review Fees in four (4) quarterly and equal installments. The
first installment shall be payable upon submission of the first documents/plans
for review by Licensor. In the event a Project is terminated before
fully-reviewed by Licensor, the parties shall reasonably pro-rate the Review
Fees based on the actual review work performed by Licensor.

The Review Fees listed above are inclusive of all expenses, included, but not
limited to, travel, telephone, shipping, equipment, supplies, physical reviews
of the Project, document approval, attendance at design progress meetings and
meetings held in conjunction with the milestone events described on Exhibit “A”
to the Addendum, on-site inspections during design & construction, post
construction services and all other meetings required to successfully complete
the review of each Project for compliance with the Design Standards.

Within one hundred twenty (120) days following the second anniversary of the
License Agreement, the parties shall meet to evaluate the Review Fees and again
on each second anniversary thereof. In the event the Review Fees are less, or
greater than, the actual cost incurred by Licensor in the review of Licensee’s
Projects, the Review Fees shall be re-negotiated by the parties to an amount
anticipated to cover the reasonable costs thereof.

 

Exhibit C to Exhibit G- Solo Page

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EXHIBIT H

EXISTING PROJECTS AT WHICH LICENSEE

HAS NOT ENGAGED IN TRANSIENT RENTAL

Existing Projects for which Licensee has not notified Licensor of Licensee’s
intention to engage in transient rentals

 

Project Name

  

Place

The Ritz-Carlton Club, Bachelor Gulch

   (Bachelor Gulch, Colorado)

The Ritz-Carlton Club, Jupiter

   (Jupiter, Florida)

The Ritz-Carlton Club, Kapaula Bay

   (Mauai, Hawaii)

Existing Projects for which Licensee has notified Licensor of Licensee’s
intention to engage in transient rentals

 

Project Name

  

Place

The Ritz-Carlton Club, Aspen Highlands

   (Aspen, Colorado)

The Ritz-Carlton Club, Lake Tahoe

   (Lake Tahoe, California)

The Ritz-Carlton Residences at Kauai Lagoons

   (Kauaii, Hawaii)

The Ritz-Carlton Club, San Francisco

   (San Francisco, California)

 

Exhibit H - Solo Page

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EXHIBIT I

EXISTING GOLF FACILITIES

 

Facility Name

  

Place

The Abaco Club on Winding Bay

   (Abaco, Bahamas)

The Ritz-Carlton Golf Club & Spa

   (Jupiter, Florida)

 

Exhibit I - Solo Page

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EXHIBIT J

PERMITTED LICENSEE AFFILIATE NAMES

 

Affiliate

  

Jurisdiction of

Organization

United States Affiliates

  

RBF, LLC

  

Delaware

Also does business under the name The Ritz-Carlton Golf Club & Spa, Jupiter

  

The Ritz-Carlton Development Company Inc.

  

Delaware

The Ritz-Carlton Management Company, LLC

  

Delaware

The Ritz-Carlton Sales Company, Inc.

  

Delaware

The Ritz-Carlton Title Company, Inc.

  

Delaware

Non-United States Affiliates

  

The Ritz-Carlton Club, St. Thomas, Inc.

  

Virgin Islands - US

 

Exhibit J - Solo Page

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EXHIBIT K

NEW PROJECT APPLICATION

I. PROJECT DESCRIPTION

Applicant:             Marriott Vacations Worldwide

Date Submitted:____________

Project

Description:                                                                 
                                         
                                         
                                         
                                                

                                                                   
                                         
                                         
                                         
                                                                     

                                                                           
                                         
                                         
                                         
                                                             

Brand(s):____________________

Project Name (if

known):                                                                  
                                         
                                         
                                         
                                                      

Number of Villas/Keys Planned:                                       
                                          Number of Floors:
                                                                             

 

        Villas         Keys      

Destination Club Unit Mix:

   Studios:      _____         _____         

1-Bedroom:

     _____         _____         

2-Bedroom:

     _____         _____         

3-Bedroom:

     _____         _____         

4-Bedroom:

     _____         _____         

Other:

     _____         _____         

Lock-out Units

     _____         _____               Villas         Keys      

Residential Unit Mix:

   Studios:      _____         _____         

1-Bedroom:

     _____         _____         

2-Bedroom:

     _____         _____         

3-Bedroom:

     _____         _____         

4-Bedroom:

     _____         _____         

Other:

     _____         _____         

Lock-out Units

     _____         _____      

On-Site Facilities

           

Restaurant Facilities /# of Seats:                                          
                                         
                                         
                                                              

Bars or

Lounges:                                                               
                                         
                                         
                                         
                                              

Retail Shops:                                          
                                         
                                         
                                         
                                                          

Recreation/Golf/Spa:                                          
                                         
                                         
                                         
                                           

 

Exhibit K - Page 1

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Marketplace:                                                              
                                         
                                         
                                                                                

Sales Gallery:                                          
                                         
                                        
                                         
                                                          

Pools:                                          
                                         
                                         
                                         
                                                                       

Play Areas:                                        
                                         
                                         
                                         
                                                               

Other:                                                                          
                                         
                                         
                                         
                                       

Is the site co-located with any lodging or other facilities? If so, provide
details.

                                                                           
                                         
                                         
                                         
                                                             

                                                                   
                                         
                                         
                                         
                                                                     

If co-located with RCHC lodging, is a shared services and/or integration
agreement contemplated? If so, provide details.

                                                                           
                                         
                                         
                                         
                                                             

Description of Site:

Total Square Footage of Site:                                          
                                       Acreage:
                                         
                                            

Site is controlled by MVW as follows:

( ) Owned by MVW                                         
                                                ( ) Leased by MVW

( ) Purchase Contract                                        
                                               ( ) Other:
___________________________

If the site is currently owned by an entity other than the MVW, please provide
the following information:

Fee Owner:                                        
                                         
                                         
                                         
                                                               

Street Address:                                       
                                         
                                         
                                         
                                                         

City, State, Zip Code, Country:                                       
                                         
                                         
                                                                    

Phone Number:                                          
                                         
                                         
                                         
                                                     

Relationship to MVW, if any:                                        
                                         
                                         
                                                                      

OTHER INFORMATION ABOUT THE SITE

Are there currently any existing
moratoriums?                                       
                                ( ) Yes* ( ) No

Are there any restrictions on the site that would necessitate special

local variances (e.g., parking, signage, liquor licenses,
etc.)?                                                  ( ) Yes* ( ) No

 

* Explain the situation(s) and your plans to resolve same (attach supplemental
sheets if necessary):

                                                                   
                                         
                                         
                                         
                                                                     

                                                                   
                                         
                                         
                                         
                                                                     

 

Exhibit K - Page 2

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Please submit with your application:

 

(1) A copy of the deed, lease, purchase contract or other documents showing
MVW’s ownership or control of the site;

 

(2) A copy of the plat of the site and a site plan;*

 

(3) Photographs of site and surrounding land uses;

 

(4) A conceptual floor plan and elevation (may be omitted if prototype [Brand]
or if only variation to prototype is the addition of rooms); and

 

(5) A map of the location.

 

* See Minimum Submission Requirements at Attachment A

 

II. PROPOSED DEVELOPMENT/CONVERSION COSTS AND PROJECTIONS

Property will be a: _____ New Development _____ Conversion/Renovation

If a new development, please complete Section II A and C and the remainder of
this application. If a conversion/renovation, please complete Section II B and C
and the remainder of this application.

A. NEW DEVELOPMENT

PROPOSED DEVELOPMENT COSTS:

Land Cost: $_______________

Development Cost (Construction/Other): $_______________

Total Cost: $ ______________         Per Villa/Room: $__________         Per
Residence $___________

Anticipated Construction Start: ___________

Estimated Opening Date: ________________

SALES PROJECTIONS:

Estimated number of Vacation Ownership Interests:________ Estimated gross
contract sales:____________

Estimated number of Residential Units:________                     Estimated
gross contract sales:____________

B. CONVERSION/RENOVATION

NAME OF PROPERTY AND CURRENT
USE:____________________________________________________

Acquisition Cost: $________________

Conversion Cost: $________________

 

Exhibit K - Page 3

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Total Cost: $_____________________         Per Villa/Room: $___________

Year Built: _______________________

Anticipated Conversion/Renovation Start:________________________

Estimated Conversion/Renovation Date: _________________________

SALES PROJECTIONS:

Estimated number of Vacation Ownership Interests:________   Estimated gross
contract sales:________

Estimated number of Residential Units:_________                     Estimated
gross contract sales:________

C. PROPOSED TRANSACTION SUMMARY

Please describe the proposed transaction terms and associated agreements, as
well as results of the

territorial

search.                                                                  
                                         
                                         
                                         
                                                         

                                                                   
                                         
                                        
                                         
                                                                       

                                                                           
                                         
                                         
                                         
                                                             

D. RENTAL PROGRAM

Please indicate if transient rental is contemplated and describe applicable
rental program arrangements:

                                                                   
                                         
                                         
                                         
                                                                     

                                                                           
                                         
                                         
                                         
                                                             

 

III. OWNERSHIP STRUCTURE AND DUE DILIGENCE

Please provide the information requested in this section for the property owner,
if different, from Marriott Vacations Worldwide.

Owner

Name:                                                                  
                                         
                                         
                                         
                                                         

A/an ___________________                   ( ) General Partnership      ( )
Privately Held Corporation

                (state)                                         ( ) Limited
Partnership      ( ) Individual

                                                                   ( ) Public
Corporation       ( ) Joint Venture

                                                                   ( ) Trust
    ( ) Estate          ( ) Other

                                                                   ( )
Syndicated Limited Partnership

                                                                   ( ) Limited
Liability Company

MVW Interest in
Owner:_________________________________________________________________

 

Exhibit K - Page 4

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Contact:

   Principal Correspondent:

Name: ___________________________________

   Name:__________________________________

Title: ____________________________________

   Title:___________________________________

Street Address:____________________________

   Street Address: __________________________

Phone Number: ___________________________

   Phone Number:__________________________

Fax Number:______________________________

   Fax Number:____________________________

E-mail Address:____________________________

   E-mail Address:__________________________ Tax ID
No.:________________________________   

Authorized Signer for Entity:

Name: ___________________________________

Title: ____________________________________

Please provide the following for each individual or entity that is related to
the transaction.

 

Full Name    Home and Business Street
Addresses, Phone  Numbers,
& Email Address    Description of Interest                        

 

Exhibit K - Page 5

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ATTACHMENT A: MINIMUM SUBMISSION REQUIREMENTS

 

1. Facilities program summary describing the space requirements for all areas of
the project and the project related areas (e.g., public spaces, kitchen,
laundry, back office, etc.);

 

2. A listing of each operating function of the project and the “as designed”
areas, and other documents reasonably necessary to represent the size, layout
and quality of the project;

 

3. A colored vicinity/location map indicating vehicular traffic directions,
ingress and egress points and major surrounding developments and transportation
centers;

 

4. A site plan showing all site elements and proposed landscaping;

 

5. Floor plans, showing all spaces listed in the facilities program;

 

6. Unit layouts, in unit kitchen equipment (if applicable), closets, balconies
and other major features;

 

7. Building elevations and sections, showing exterior materials, details and
colors;

 

8. A rendered perspective drawing of the project; and

 

9. A description of the proposed exterior materials.

 

Exhibit K - Page 6

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EXHIBIT L

PURCHASER DISCLOSURE STATEMENT

[The Ritz-Carlton Development Company, Inc.]1 independently owns and manages
[The Ritz-Carlton Destination Club]2 program. The programs and products provided
under the [The Ritz-Carlton Destination Club] brand are owned, developed, and
sold by [The Ritz-Carlton Development Company, Inc.], not by The Ritz-Carlton
Hotel Company, L.L.C. or any of its affiliates. [The Ritz-Carlton Development
Company, Inc.] is an independent entity and is not an affiliate of The
Ritz-Carlton Hotel Company, L.L.C. [The Ritz-Carlton Development Company, Inc.]
and its affiliates use The Ritz-Carlton marks under license from The
Ritz-Carlton Hotel Company, L.L.C., and the right to use such marks shall cease
if such license expires or is revoked or terminated. The Ritz-Carlton Hotel
Company, L.L.C. and its affiliates make no representations, warranties, or
guaranties, express or implied, with respect to the information contained in any
offering documents or with respect to the [The Ritz-Carlton Destination Club]
program.

 

 

1 

Insert name of appropriate entity to which the disclosure relates.

 

2 

Insert name of appropriate product or program to which the disclosure relates.

 

Exhibit L - Solo Page