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EXHIBIT NO. 10.1
 
INDEMNIFICATION AGREEMENT
 
THIS INDEMNIFICATION AGREEMENT (“Agreement”) is made and entered into this ___
day of September, 2006, by and between SUNTERRA CORPORATION, a Maryland
corporation (the “Company”), and     (“Indemnitee”).
 
WHEREAS, at the request of the Company, Indemnitee currently serves as a
[director/officer] of the Company, and therefore may be subjected to claims,
suits or proceedings arising as a result of his service; and
 
WHEREAS, as an inducement to Indemnitee to continue to serve as such
[director/officer], the Company has agreed to indemnify and to advance expenses
and costs incurred by Indemnitee in connection with any such claims, suits or
proceedings, to the fullest extent permitted by law; and
 
WHEREAS, the parties by this Agreement desire to set forth their agreement
regarding indemnification and advance of expenses;
 
NOW, THEREFORE, in consideration of the premises and the covenants contained
herein, the Company and Indemnitee do hereby covenant and agree as follows:
 
Section 1.   Definitions. For purposes of this Agreement:
 
(a)   “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated by
the SEC under the Act.
 
(b)   “Associate” shall have the meaning set forth in Rule 12b-2 promulgated by
the SEC under the Act.
 
(c)   “Change in Control” means a change in control of the Company occurring
after the Effective Date of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any
similar item on any similar schedule or form) promulgated under the Securities
Exchange Act of 1934, as amended (the “Act”), whether or not the Company is then
subject to such reporting requirement; provided, however, that, without
limitation, such a Change in Control shall be deemed to have occurred if after
the Effective Date (i) any “person” (as such term is used in Sections 13(d) and
14(d) of the Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company
representing more than 50% of the combined voting power of the Company’s then
outstanding securities without the prior approval of at least two-thirds of the
members of the Board of Directors in office immediately prior to such person
attaining such percentage interest; (ii) there occurs a proxy contest, or the
Company is a party to a merger, consolidation, sale of assets, plan of
liquidation or other reorganization not approved by at least two-thirds of the
members of the Board of Directors then in office, as a consequence of which
members of the Board of Directors in office immediately prior to such
transaction or event constitute less than a majority of the Board of Directors
thereafter; or (iii) during any period of two consecutive years, other than as a
result of an event described in clause (c)(ii) of this Section 1, individuals
who at the beginning of such period constituted the Board of Directors
(including for this purpose any new director whose election or nomination for
election by the Company’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of such period) cease for any reason to constitute at least a majority
of the Board of Directors.

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(d)   "Corporate Status" means the status of a person who is or was a director,
trustee, officer, employee or agent of the Company or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise for
which such person is or was serving at the request of the Company.
 
(e)   "Disinterested Director" means a director of the Company who is not and
was not a party to the Proceeding in respect of which indemnification is sought
by Indemnitee.
 
(f)   "Effective Date" means the date set forth in the first paragraph of this
Agreement.
 
(g)   "Expenses" shall include all reasonable attorneys' fees, retainers, court
costs, transcript costs, fees of experts, accountants and other professionals,
witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, and all other disbursements
or expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, or being or
preparing to be a witness in a Proceeding.
 
(h)   "Independent Counsel" means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither is, nor in the past five
years has been, retained to represent: (i) the Company or Indemnitee in any
matter material to either such party, or (ii) any other party to the Proceeding
giving rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term "Independent Counsel" shall not include any person who,
under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or Indemnitee in
an action to determine Indemnitee's rights under this Agreement. Independent
Counsel shall be selected by Indemnitee, with the approval of the Board of
Directors, which approval will not be unreasonably withheld.
 
(i)   "Proceeding" includes any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation, regulatory
inquiry, administrative hearing or any other proceeding, whether civil,
criminal, administrative or investigative (including on appeal), except one
initiated by an Indemnitee pursuant to Section 11 of this Agreement to enforce
his rights under this Agreement.
 
(j)   "Representative" means Indemnitee's appraisers, independent accountants,
legal counsel and other agents, consultants and advisors.
 
(k)   "Schedule 13D Group" means those parties that are members of a group, of
which group Indemnitee is also a member, that identifies itself as such a group
for the purposes of filing Schedule 13D with the SEC.

(l)   "SEC" means the Securities and Exchange Commission.
 
Section 2.   Services by Indemnitee. Indemnitee will serve as a
[director/officer] of the Company. However, this Agreement shall not impose any
obligation on Indemnitee or the Company to continue Indemnitee's service to the
Company beyond any period otherwise required by law or by other agreements or
commitments of the parties, if any.

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Section 3.   Indemnification - General. The Company shall indemnify, and advance
Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to
the fullest extent permitted by Maryland law in effect on the date hereof and as
amended from time to time; provided, however, that no change in Maryland law
shall have the effect of reducing the benefits available to Indemnitee hereunder
based on Maryland law as in effect on the date hereof. The rights of Indemnitee
provided in this Section 3 shall include, without limitation, the rights set
forth in the other sections of this Agreement, including any additional
indemnification permitted by Section 2-418(g) of the Maryland General
Corporation Law ("MGCL").
 
Section 4.   Proceedings Other Than Proceedings by or in the Right of the
Company. Indemnitee shall be entitled to the rights of indemnification provided
in this Section 4 if, by reason of or related to his Corporate Status, he is, or
is threatened to be, made a party to or a witness in any threatened, pending, or
completed Proceeding, other than a Proceeding by or in the right of the Company
to procure a judgment in its favor against Indemnitee. Pursuant to this Section
4, Indemnitee shall be indemnified against all judgments, penalties, fines and
amounts paid in settlement and all Expenses actually and reasonably incurred by
him or on his behalf in connection with a Proceeding by reason of or related to
his Corporate Status unless it is established that: (i) the act or omission of
Indemnitee was material to the matter giving rise to the Proceeding and (a) was
committed in bad faith, or (b) was the result of active and deliberate
dishonesty; (ii) Indemnitee actually received an improper personal benefit in
money, property or services; or (iii) in the case of any criminal Proceeding,
Indemnitee had reasonable cause to believe that his conduct was unlawful.
 
Section 5.   Proceedings by or in the Right of the Company. Indemnitee shall be
entitled to the rights of indemnification provided in this Section 5 if, by
reason of or related to his Corporate Status, he is, or is threatened to be,
made a party to any threatened, pending or completed Proceeding brought by or in
the right of the Company to procure a judgment in its favor against Indemnitee.
Pursuant to this Section 5, Indemnitee shall be indemnified against all
judgments, penalties, fines and amounts paid in settlement and all Expenses
actually and reasonably incurred by him or on his behalf in connection with such
Proceeding unless: (i) the Indemnitee is adjudged liable to the Company; or (ii)
it is established that: (a) the act or omission of Indemnitee was material to
the matter giving rise to such a Proceeding and (1) was committed in bad faith,
or (2) was the result of active and deliberate dishonesty; or (b) Indemnitee
actually received an improper personal benefit in money, property or services.
 
Section 6.   Court-Ordered Indemnification. Notwithstanding any other provision
of this Agreement, a court of appropriate jurisdiction, upon application of
Indemnitee and such notice as the court shall require, may order indemnification
in the following circumstances:
 
(a)   if it determines Indemnitee is entitled to reimbursement under Section
2-418(d)(1) of the MGCL, the court shall order indemnification, in which case
Indemnitee shall be entitled to recover the expenses of securing such
reimbursement; or

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(b)   if it determines that Indemnitee is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether or not
Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of
the MGCL or (ii) has been adjudged liable for receipt of an improper personal
benefit under Section 2-418(c) of the MGCL, the court may order such
indemnification as the court shall deem proper. However, indemnification with
respect to any Proceeding by or in the right of the Company or in which
liability shall have been adjudged in the circumstances described in Section
2-418(c) of the MGCL shall be limited to Expenses.
 
Section 7.   Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is, by reason of or related to his Corporate Status, made a
party to and is successful, on the merits or otherwise, in the defense of any
Proceeding, he shall be indemnified for all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith. If Indemnitee is not
wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all
Expenses actually and reasonably incurred by him or on his behalf in connection
with each successfully resolved claim, issue or matter, allocated on a
reasonable and proportionate basis. For purposes of this Section and without
limitation, the termination of any claim, issue or matter in such a Proceeding
by dismissal, with or without prejudice, shall be deemed to be a successful
result as to such claim, issue or matter.
 
Section 8.   Advance of Expenses. The Company shall advance all reasonable
Expenses incurred by or on behalf of Indemnitee in connection with any
Proceeding to which Indemnitee is, or is threatened to be, made a party or a
witness, within ten days after the receipt by the Company of a statement or
statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of such Proceeding. Such
statement or statements shall reasonably evidence the Expenses incurred by
Indemnitee and shall include or be preceded or accompanied by a written
affirmation by Indemnitee of Indemnitee's good faith belief that the standard of
conduct necessary for indemnification by the Company as authorized by law and by
this Agreement has been met and a written undertaking by or on behalf of
Indemnitee, in substantially the form attached hereto as Exhibit A or in such
form as may be required under applicable law as in effect at the time of the
execution thereof, to reimburse the portion of any Expenses advanced to
Indemnitee relating to claims, issues or matters in the Proceeding as to which
it shall ultimately be established by a final decision of a court of competent
jurisdiction, with no further right of appeal, that the standard of conduct has
not been met and which have not been successfully resolved as described in
Section 7. To the extent that Expenses advanced to Indemnitee do not relate to a
specific claim, issue or matter in the Proceeding, such Expenses shall be
allocated on a reasonable and proportionate basis. The undertaking required by
this Section 8 shall be an unlimited general obligation by or on behalf of
Indemnitee and shall be accepted without reference to Indemnitee's financial
ability to repay such advanced Expenses and without any requirement to post
security therefor. For the avoidance of doubt, the Company agrees that it shall
not condition any advancement of Expenses upon the Indemnitee posting security
for such advanced Expenses.

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Section 9.   Procedure for Determination of Entitlement to Indemnification.
 
(a)   To obtain indemnification under this Agreement, Indemnitee shall submit to
the Company a written request, including therein or therewith such documentation
and information as is reasonably available to Indemnitee and is reasonably
necessary to determine whether and to what extent Indemnitee is entitled to
indemnification. The Secretary of the Company shall, promptly upon receipt of
such a request for indemnification, advise the Board of Directors in writing
that Indemnitee has requested indemnification.
 
(b)   Upon written request by Indemnitee for indemnification pursuant to the
first sentence of Section 9(a) hereof, a determination, if required by
applicable law, with respect to Indemnitee's entitlement thereto shall promptly
be made in the specific case: (i) if a Change in Control shall have occurred, by
Independent Counsel in a written opinion to the Board of Directors, a copy of
which shall be delivered to Indemnitee; or (ii) if a Change of Control shall not
have occurred, (A) by the Board of Directors (or a duly authorized committee
thereof) by a majority vote of a quorum consisting of Disinterested Directors
(as herein defined), or (B) if a quorum of the Board of Directors consisting of
Disinterested Directors is not obtainable or, even if obtainable, such quorum of
Disinterested Directors so directs, by Independent Counsel in a written opinion
to the Board of Directors, a copy of which shall be delivered to Indemnitee, or
(C) if so directed by a majority of the members of the Board of Directors, by
the stockholders of the Company, or (D) if requested by Indemnitee, by
Independent Counsel in a written opinion to the Board of Directors; and, if it
is so determined that Indemnitee is entitled to indemnification, or if no such
determination is required by applicable law, payment to Indemnitee shall be made
within ten days after such determination (or, if no such determination is
required, within ten days after Indemnitee's submission of a written request for
indemnification). Indemnitee shall cooperate with the person, persons or entity
making such determination with respect to Indemnitee's entitlement to
indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or Expenses incurred by Indemnitee in so cooperating with the person,
persons or entity making such determination, and any costs or Expenses of the
Independent Counsel, shall be borne by the Company (irrespective of the
determination as to Indemnitee's entitlement to indemnification) and the Company
shall indemnify and hold Indemnitee harmless therefrom.
 
Section 10.   Presumptions and Effect of Certain Proceedings.
 
(a)   In making a determination with respect to entitlement to indemnification
hereunder, the person or persons or entity making such determination shall
presume that Indemnitee is entitled to indemnification under this Agreement if
Indemnitee has submitted a request for indemnification in accordance with
Section 9(a) of this Agreement, and the Company shall have the burden of proof
to overcome that presumption in connection with the making of any determination
contrary to that presumption.
 
(b)   The termination of any Proceeding by judgment, order, settlement,
conviction, a plea of nolo contendere or its equivalent, or an entry of an order
of probation prior to judgment, does not create a presumption that Indemnitee
did not meet the requisite standard of conduct described herein for
indemnification.

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Section 11.   Remedies of Indemnitee.
 
(a)   If (i) a determination is made pursuant to Section 9 of this Agreement
that Indemnitee is not entitled to indemnification under this Agreement, (ii)
advance of Expenses is not timely made pursuant to Section 8 of this Agreement,
(iii) no determination of entitlement to indemnification shall have been made
pursuant to Section 9(b) of this Agreement within 30 days after receipt by the
Company of the request for indemnification, (iv) payment of indemnification is
not made pursuant to Section 7 of this Agreement within ten days after receipt
by the Company of a written request therefor, or (v) payment of indemnification
is not made within ten days after a determination has been made that Indemnitee
is entitled to indemnification, Indemnitee shall be entitled to an adjudication
in an appropriate court of the State of Maryland, or in any other court of
competent jurisdiction, of his entitlement (including by reason of having met
the applicable standard of conduct to be entitled to indemnification as set
forth in this Agreement) to such indemnification or advance of Expenses.
Alternatively, Indemnitee, at his option, may seek an award in arbitration to be
conducted by a single arbitrator pursuant to the commercial Arbitration Rules of
the American Arbitration Association. Indemnitee shall commence such proceeding
seeking an adjudication or an award in arbitration within 180 days following the
date on which Indemnitee first has the right to commence such proceeding
pursuant to this Section 11(a); provided, however, that the foregoing clause
shall not apply to a proceeding brought by Indemnitee to enforce his rights
under Section 7 of this Agreement.
 
(b)   In any judicial proceeding or arbitration commenced pursuant to this
Section 11 the Company shall have the burden of proving that Indemnitee is not
entitled to indemnification or advance of Expenses, as the case may be.
 
(c)   If a determination shall have been made pursuant to Section 9(b) of this
Agreement that Indemnitee is entitled to indemnification, the Company shall be
bound by such determination in any judicial proceeding or arbitration commenced
pursuant to this Section 11, absent a misstatement by Indemnitee of a material
fact, or an omission of a material fact necessary to make Indemnitee's statement
not materially misleading, in connection with the request for indemnification.
 
(d)   In the event that Indemnitee, pursuant to this Section 11, seeks a
judicial adjudication of or an award in arbitration to enforce his rights under,
or to recover damages for breach of, this Agreement, Indemnitee shall be
entitled to recover from the Company, and shall be indemnified by the Company
for, any and all Expenses actually and reasonably incurred by him in such
judicial adjudication or arbitration. If it shall be determined in such judicial
adjudication or arbitration that Indemnitee is entitled to receive part but not
all of the indemnification or advance of Expenses sought, the Expenses incurred
by Indemnitee in connection with such judicial adjudication or arbitration shall
be appropriately prorated.

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Section 12.   Defense of the Underlying Proceeding.
 
(a)   Indemnitee shall notify the Company promptly upon being served with or
receiving any summons, citation, subpoena, complaint, indictment, information,
notice, request or other document relating to any Proceeding which may result in
the right to indemnification or the advance of Expenses hereunder; provided,
however, that the failure to give any such notice shall not disqualify
Indemnitee from the right, or otherwise affect in any manner any right of
Indemnitee, to indemnification or the advance of Expenses under this Agreement
unless the Company's ability to defend in such Proceeding or to obtain proceeds
under any insurance policy is materially and adversely prejudiced thereby, and
then only to the extent the Company is thereby actually so prejudiced.
 
(b)   Subject to the provisions of the last sentence of this Section 12(b) and
of Section 12(c) below, the Company shall have the right to defend Indemnitee in
any Proceeding which may give rise to indemnification hereunder using counsel of
the Company's choice, subject to the prior approval of Indemnitee, which shall
not be unreasonably withheld; provided, however, that the Company shall notify
Indemnitee of any such decision to defend within 15 calendar days following
receipt of notice of any such Proceeding under Section 12(a) above. The Company
may consent to the entry of any judgment against Indemnitee or enter into any
settlement or compromise pursuant to which Indemnitee would have no obligations
or liabilities, but the Company would be required to pay monetary damages.
Notwithstanding the foregoing, the Company shall not, without the prior written
consent of Indemnitee, which shall not be unreasonably withheld or delayed,
consent to the entry of any judgment against Indemnitee or enter into any
settlement or compromise; provided, however, that the Company shall not, without
Indemnitee's prior written consent, which consent shall be granted or withheld
in Indemnitee's sole discretion, consent to the entry of any judgment against
Indemnitee or enter into any settlement or compromise which (i) includes an
admission of fault of Indemnitee, (ii) does not include, as an unconditional
term thereof, the full release of Indemnitee from all liability in respect of
such Proceeding, which release shall be in form and substance reasonably
satisfactory to Indemnitee, or (iii) imposes or includes any other terms,
conditions or provisions which Indemnitee believes, in his good faith judgment,
to be adverse to Indemnitee in any material respect. This Section 12(b) shall
not apply to a Proceeding brought by Indemnitee under Section 11 above or
Section 18 below.
 
(c)   Notwithstanding the provisions of Section 12(b) above, if in a Proceeding
to which Indemnitee is a party by reason of or related to Indemnitee's Corporate
Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel
approved by the Company, which approval shall not be unreasonably withheld, that
he may have separate defenses or counterclaims to assert with respect to any
issue which may not be consistent with other defendants in such Proceeding, (ii)
Indemnitee reasonably concludes, based upon an opinion of counsel approved by
the Company, which approval shall not be unreasonably withheld, that an actual
or apparent conflict of interest or potential conflict of interest exists
between Indemnitee and the Company, or (iii) if the Company fails to assume the
defense of such Proceeding in a timely manner, or at any time thereafter fails
to reasonably defend such Proceeding, Indemnitee shall be entitled to be
represented by separate legal counsel of Indemnitee's choice, subject to the
prior approval of the Company, which shall not be unreasonably withheld, at the
expense of the Company. In addition, if the Company fails to comply with any of
its obligations under this Agreement or in the event that the Company or any
other person takes any action to declare this Agreement void or unenforceable,
or institutes any Proceeding to deny or to recover from Indemnitee the benefits
intended to be provided to Indemnitee hereunder, Indemnitee shall have the right
to retain counsel of Indemnitee's choice, subject to the prior approval of the
Company, which shall not be unreasonably withheld, at the expense of the Company
(subject to Section 11(d)), to represent Indemnitee in connection with any such
matter.

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Section 13.   Non-Exclusivity; Survival of Rights; Subrogation; Insurance.
 
(a)   The rights of indemnification and advance of Expenses as provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee
may at any time be entitled under applicable law, the Charter or Bylaws of the
Company, any agreement or a resolution of the stockholders entitled to vote
generally in the election of directors or of the Board of Directors, or
otherwise. No amendment, alteration or repeal of this Agreement or of any
provision hereof shall limit or restrict any right of Indemnitee under this
Agreement in respect of any action taken or omitted by such Indemnitee in his
Corporate Status prior to such amendment, alteration or repeal.
 
(b)   In the event of any payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all papers required and take all action necessary
to secure such rights, including execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights.
 
(c)   The Company shall not be liable under this Agreement to make any payment
of amounts otherwise indemnifiable or payable or reimbursable as expenses
hereunder if and to the extent that Indemnitee has otherwise actually received
such payment under any insurance policy, contract, agreement or otherwise;
provided, however, that if and to the extent that Indemnitee is at any time
thereafter required to return, refund or repay, or shall otherwise not be
entitled to the benefit of, any such payment, then the Company's liability under
this Agreement with respect to such payment shall be reinstated and the
provisions of this Agreement shall continue to apply with respect thereto, and
any applicable time periods under this Agreement shall automatically be extended
for the period during which Indemnitee was entitled to the benefit of such
payment.
 
Section 14.   Insurance. The Company will use its reasonable best efforts to
acquire directors and officers liability insurance, on terms and conditions
deemed appropriate by the Board of Directors of the Company, with the advice of
counsel, covering Indemnitee or any claim made against Indemnitee for service as
a director or officer of the Company and covering the Company for any
indemnification or advance of Expenses made by the Company to Indemnitee for any
claims made against Indemnitee for service as a director or officer of the
Company. Without in any way limiting any other obligation under this Agreement,
the Company shall indemnify Indemnitee for any payment by Indemnitee arising out
of the amount of any deductible or retention and the amount of any excess of the
aggregate of all judgments, penalties, fines, settlements and reasonable
Expenses incurred by Indemnitee in connection with a Proceeding over the
coverage of any insurance referred to in the previous sentence.

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Section 15.   Indemnification for Expenses of a Witness. Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee is, by reason
of or related to his Corporate Status, a witness in any Proceeding, whether
instituted by the Company or any other party, and to which Indemnitee is not a
party, he shall be advanced all reasonable Expenses and indemnified against all
Expenses actually and reasonably incurred by him or on his behalf in connection
therewith.
 
Section 16.   Duration of Agreement; Binding Effect.
 
(a)   This Agreement shall continue until and terminate upon the expiration of
the last to expire of any applicable statute of limitations for claims against
Indemnitee which are subject to indemnification pursuant to this Agreement;
provided, that the rights of Indemnitee hereunder shall continue until the final
termination of any Proceeding then pending in respect of which Indemnitee is
granted rights of indemnification or advance of Expenses hereunder and of any
proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement
relating thereto.
 
(b)   The indemnification and advance of Expenses provided by, or granted
pursuant to, this Agreement shall be binding upon and be enforceable by the
parties hereto and their respective successors and assigns (including any direct
or indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), shall continue as
to an Indemnitee who has ceased to be a director, trustee, officer, employee or
agent of the Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise which such person is or was
serving at the written request of the Company, and shall inure to the benefit of
Indemnitee and his spouse, assigns, heirs, devisees, executors and
administrators and other legal representatives.
 
(c)   The Company shall require and cause any successor (whether direct or
indirect by purchase, merger, consolidation or otherwise) to all, substantially
all or a substantial part, of the business and/or assets of the Company, by
written agreement in form and substance satisfactory to Indemnitee, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place.
 
Section 17.   Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason whatsoever:
(a) the validity, legality and enforceability of the remaining provisions of
this Agreement (including, without limitation, each portion of any section of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable that is not itself invalid, illegal or unenforceable) shall not in
any way be affected or impaired thereby; and (b) to the fullest extent possible,
the provisions of this Agreement (including, without limitation, each portion of
any section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested thereby.
 
Section 18.   Exception to Right of Indemnification or Advance of Expenses.
Notwithstanding any other provision of this Agreement, Indemnitee shall not be
entitled to indemnification or advance of Expenses under this Agreement with
respect to any Proceeding brought by Indemnitee or any member of a Schedule 13D
Group, Affiliate, Associate or Representative or by a third party at the behest
of any of the aforementioned (provided that the foregoing shall not limit or
otherwise affect Indemnitee's rights to indemnification or advance of Expenses
in connection with any defenses or counterclaims asserted by Indemnitee in any
Proceeding), unless (a) the Proceeding is brought to enforce indemnification
under this Agreement or otherwise or (b) the Company's Bylaws, as amended, the
Charter, a resolution of the stockholders entitled to vote generally in the
election of directors or of the Board of Directors or an agreement approved by
the Board of Directors to which the Company is a party expressly provide
otherwise.

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Section 19.   Identical Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same Agreement.
One such counterpart signed by the party against whom enforceability is sought
shall be sufficient to evidence the existence of this Agreement.
 
Section 20.   Headings. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
 
Section 21.   Modification and Waiver. No supplement, modification or amendment
of this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.
 
Section 22.   Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed, or (ii) mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed:
 
(a)   If to Indemnitee, to: The address set forth on the signature page hereto.
 
(b)   If to the Company to:
 
Sunterra Corporation
3865 West Cheyenne Avenue
North Las Vegas, Nevada 89032
Attn: General Counsel

or to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.

Section 23.   Governing Law. The parties agree that this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Maryland, without regard to its conflicts of laws rules.

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Section 24.   Miscellaneous. Use of the masculine pronoun shall be deemed to
include usage of the feminine pronoun where appropriate.
 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
 
ATTEST:
 
COMPANY
   
SUNTERRA CORPORATION
                   
 
 
By:
 
     
Name:
       
Title:
                     
WITNESS:
 
INDEMNITEE
                       
 
   
Name:
     
Address:
             

 
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EXHIBIT A
FORM OF AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES ADVANCED
 
To the Board of Directors of Sunterra Corporation:

Re: Undertaking to Repay Expenses Advanced

Ladies and Gentlemen:

This undertaking is being provided pursuant to that certain Indemnification
Agreement dated the ___ day of September, 2006, by and between Sunterra
Corporation (the "Company") and the undersigned Indemnitee (the "Indemnification
Agreement"), pursuant to which I am entitled to advance of expenses in
connection with [Description of Proceeding] (the "Proceeding").
 
Terms used herein and not otherwise defined shall have the meanings specified in
the Indemnification Agreement.
 
I am subject to the Proceeding by reason of or related to my Corporate Status or
by reason of or related to alleged actions or omissions by me in such capacity.
I hereby affirm that at all times, insofar as I was involved as
[director/officer] of the Company, in any of the facts or events giving rise to
the Proceeding, I (1) did not act in bad faith, (2) did not engage in active and
deliberate dishonesty, (3) did not receive any improper personal benefit in
money, property or services and (4) in the case of any criminal proceeding, had
no reasonable cause to believe that any act or omission by me was unlawful.
 
In consideration of the advance of Expenses by the Company for reasonable
attorneys' fees and related expenses incurred by me in connection with the
Proceeding (the "Advanced Expenses"), I hereby agree that if, in connection with
the Proceeding, it is ultimately established by a final decision of a court of
competent jurisdiction, with no further right of appeal, that (1) an act or
omission by me was material to the matter giving rise to the Proceeding and (a)
was committed in bad faith or (b) was the result of active and deliberate
dishonesty or (2) I actually received an improper personal benefit in money,
property or services or (3) in the case of any criminal proceeding, I had
reasonable cause to believe that the act or omission was unlawful, then I shall
promptly reimburse the portion of the Advanced Expenses relating to the claims,
issues or matters in the Proceeding as to which the foregoing findings have been
established and which have not been successfully resolved as described in
Section 7 of the Indemnification Agreement. To the extent that Advanced Expenses
do not relate to a specific claim, issue or matter in the Proceeding, I agree
that such Expenses shall be allocated on a reasonable and proportionate basis.
 
IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this ___
day of ____________________, 20___.

WITNESS:
Name: ____________________________
 
 

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