exv10w3






Exhibit 10.3




REDEMPTION AGREEMENT




          This REDEMPTION AGREEMENT (this “Agreement”), dated as of July 21, 2011, is entered
into by and between Cloobeck Diamond Parent, LLC, a Nevada limited liability company
(“CDP”), and Diamond Resorts Parent, LLC, a Nevada limited liability company (the
“Company”). Capitalized terms used herein and not otherwise defined herein have the
meanings given to such terms in Article VI below.




          WHEREAS, contemporaneously herewith, the Company is entering into that certain Securities
Purchase Agreement, dated as of the date hereof (the “Wellington Agreement”) with The
Hartford Growth Opportunities Fund, Hartford Growth Opportunities HLS Fund, Quissett Investors
(Bermuda) L.P., Quissett Partners, L.P., The Hartford Capital Appreciation Fund, Bay Pond Partners,
L.P. and Bay Pond Investors (Bermuda) L.P. (collectively, “Wellington”), pursuant to which
Wellington is purchasing Common Units of the Company (“Common Units”);




          WHEREAS, in connection with the issuance and sale of the Common Units, the Company desires to
purchase and redeem 34.735 Common Units of the Company from CDP, and CDP desires to sell such
securities to the Company, each on the terms and conditions set forth herein;




          NOW, THEREFORE, in consideration of the mutual covenants, agreements and understandings herein
contained, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:




ARTICLE I

REDEMPTION OF COMMON UNITS




     1.01. Redemption of Common Units. Subject to the terms and conditions of this Agreement, including the deliveries set forth
in Section 2.02, as of the date hereof, the Company hereby redeems from CDP, and CDP hereby
sells to the Company, 34.735 Common Units for an aggregate cash purchase price of $16,353,509.57
(the “Purchase Price”).



ARTICLE II

CLOSING




     2.01. Closing. The consummation of the transactions contemplated by this Agreement in connection with the
redemption of the 34.735 Common Units (the “Closing”) will take place at the offices of
Katten Muchin Rosenman LLP, 525 W. Monroe Street, Suite 1900, Chicago, Illinois (“Katten
Muchin”) or such other location as mutually agreed upon by the parties, on the date hereof (the
“Closing Date”).



 









 





     2.02. Deliveries by the Company to CDP at the Closing. At the Closing:




	 	(a)	 	Purchase Price. The Company shall deliver to CDP the
Purchase Price, by wire transfer of immediately available funds to the bank
account designated by CDP in accordance with the wire transfer instructions
provided by CDP to the Company prior to the date hereof.






	 	(b)	 	Representations and Covenants. The representations and
warranties made by the Company in Article III shall be true and
correct.





     2.03. Deliveries by CDP to the Company at the Closing. At the Closing:




	 	(a)	 	Representations and Covenants. The representations and
warranties made by CDP in Article IV shall be true and correct.





ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY




          The Company represents and warrants to CDP as of the date hereof as follows:




     3.01. Organization and Authority. The Company is a limited liability company duly organized, validly existing and in good
standing under the Laws of the State of Nevada. The Company has all requisite power and authority
to enter into and perform its obligations under this Agreement and the other agreements and
instruments that the Company is executing and delivering in connection with the transactions
contemplated by this Agreement.



     3.02. Authorization; Binding Effect. The execution, delivery and performance by the Company of this Agreement, and the
consummation and performance by the Company of the transactions contemplated hereby, have been duly
authorized by all necessary limited liability company action of the Company. This Agreement has
been duly executed and delivered at the Closing, constitutes a legal, valid and binding obligation
of the Company, enforceable in accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar Laws relating to or
affecting the rights of creditors generally and by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at Law). All proceedings or
actions required to be taken by the Company relating to the execution and delivery of this
Agreement at the Closing, and to the consummation and performance of the transactions contemplated
hereby have been taken.



     3.03. No Conflicts; No Consents. The execution, delivery or performance of this Agreement, and the consummation by the
Company of the transactions contemplated hereby, and compliance by the Company with the terms and
provisions hereof, will not (i) conflict with the Organizational Documents, or (ii) constitute a
violation by the Company of any Law applicable to the Company or its properties or assets. No
permit, authorization, consent or approval of or by, or any notification of or filing with, any
Person (governmental or private) is required by the Company in connection with the execution,
delivery and performance of this Agreement or the consummation by the Company of the transactions
contemplated hereby (other than such notifications or filings required under applicable federal or
state securities Laws, if any).



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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF CDP




          CDP represents and warrants to the Company as of the date hereof as follows:




     4.01. Organization and Authority. CDP is a limited liability company duly organized, validly existing and in good standing
under the Laws of the State of Nevada. CDP has all requisite power and authority to enter into and
perform its obligations under this Agreement and the other agreements and instruments that CDP is
executing and delivering in connection with the transactions contemplated by this Agreement.



     4.02. Authorization; Binding Effect. The execution, delivery and performance by CDP of this Agreement at the Closing, and the
consummation and performance by CDP of the transactions contemplated hereby, have been duly
authorized by all necessary limited liability company action of CDP. This Agreement has been duly
executed and delivered at the Closing, constitutes a legal, valid and binding obligation of CDP,
enforceable in accordance with their respective terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or
affecting the rights of creditors generally and by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law). All proceedings or
actions required to be taken by CDP relating to the execution and delivery of this Agreement and to
the consummation and performance of the transactions contemplated hereby have been taken.



     4.03. No Conflicts; No Consents. The execution, delivery or performance of this Agreement, and the consummation by CDP of
the transactions contemplated hereby, and compliance by CDP with the terms and provisions hereof,
will not (i) conflict with CDP’s articles of organization or operating agreement, or (ii)
constitute a violation by CDP of any Law applicable to CDP. No permit, authorization, consent or
approval of or by, or any notification of or filing with, any Person
(governmental or private) is required by CDP in connection with the execution, delivery and
performance of this Agreement or the consummation by CDP of the transactions contemplated hereby
(other than such notifications or filings required under applicable federal or state securities
laws, if any).



     4.04. Title to Purchased Units. CDP is the beneficial and record owner of the Common Units that it is selling pursuant to
this Agreement, free and clear of any liens, claims, charges, restrictions, options, preemptive
rights, mortgages, hypothecations, assessments, pledges, encumbrances or security interests of any
kind or nature whatsoever (collectively, “Liens”). Upon purchase and payment therefore and
delivery to the Company in accordance with the terms of this Agreement, the Company will acquire
good and valid title to such Common Units being redeemed hereunder, free and clear of any Liens
whatsoever.



ARTICLE V

FURTHER AGREEMENTS OF THE PARTIES




     5.01. Transaction Fees and Expenses. The Company agrees to pay the fees and expenses of CDP or its Affiliates (including without
limitation legal fees and expenses) incurred



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in connection with the negotiation and preparation of
this Agreement and the consummation of the transactions contemplated hereby. Concurrently with the
Closing, within five (5) days after demand by CDP, the Company will reimburse CDP for the fees and
expenses incurred by CDP in connection with such Closing and the transactions contemplated hereby,
which have not been previously paid by the Company.




     5.02. Survival. All of the provisions of this Agreement shall survive the Closing. The representations and
warranties of the Company shall not be affected by any knowledge or investigation of CDP.



     5.03. Consent and Waiver. In connection with the execution and delivery of this
Agreement, CDP hereby consents to (i) the transactions consummated at the Closing and (ii) the
transactions contemplated by the Transaction Agreements. CDP hereby irrevocably waives any and all
breaches, violations, conflicts, defaults, and events of default under the Registration Rights
Agreement (prior to its amendment and restatement in connection with the Closing), the LLC
Agreement (prior to its amendment and restatement in connection with the Closing), the
Securityholders Agreement (prior to its amendment and restatement in connection with the Closing),
and any other agreement between the Company and CDP which is in effect as of the date hereof, but
only as such breaches, violations, conflicts, defaults, and events of default may occur in
connection with the consummation of the transactions at the Closing under the Transaction
Agreements



ARTICLE VI

DEFINITIONS




          For the purposes of this Agreement, the following terms have the meanings set forth below:




          “Affiliate” of any particular Person means any other Person controlling, controlled by
or under common control with such particular Person, where “control” means the possession, directly
or indirectly, of the power to direct the management and policies of a Person whether through the
ownership of voting securities, contract or otherwise.




          “Agreement” has the meaning set forth in the Preamble to this Agreement.




          “Articles of Organization” means the Company’s Articles of Organization filed with the
Nevada Secretary of State on March 28, 2007.




          “CDP” means Cloobeck Diamond Parent, LLC, a Nevada limited liability company.




          “Closing” has the meaning set forth in Section 2.01.




          “Closing Date” has the meaning set forth in Section 2.01.




          “Company” has the meaning set forth in the Preamble to this Agreement.




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          “Common Units” has the meaning set forth in the Recitals to this Agreement.




          “Governmental Authority” means federal, state, county, or local government, political
subdivision or governmental, regulatory or administrative authority, body, agency, board, bureau,
commission, department, instrumentality, official or court.




          “Katten Muchin” has the meaning set forth in Section 2.01.




          “Law” means any statute, law, code, ordinance, regulation, rule, order, judgment,
writ, injunction, act or decree of any Governmental Authority.




          “Lien” has the meaning set forth in Section 4.04.




          “LLC Agreement” means that certain Fourth Amended and Restated Operating Agreement of
the Company, dated as of the date hereof, by and among CDP, 1818 Partners, LLC, DRP Holdco, LLC,
Silver Rock Financial LLC, IN — FP1 LLC, BDIF LLC and CM — NP LLC, The Hartford Growth
Opportunities Fund, Hartford Growth Opportunities HLS Fund, Quissett Investors (Bermuda) L.P.,
Quissett Partners, L.P., The Hartford Capital Appreciation Fund, Bay Pond Partners, L.P. and Bay
Pond Investors (Bermuda) L.P.




          “Organizational Documents” means the Articles of Organization and the LLC Agreement.




          “Purchase Price” has the meaning set forth in Section 1.01.




          “Person” means an individual, a partnership, a limited liability company, a
corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political subdivision thereof.




          “Registration Rights Agreement” means that certain Second Amended and Restated
Registration Rights Agreement, dated as of the date hereof, by and among the Company, CDP, 1818
Partners, LLC, DRP Holdco, LLC, Silver Rock Financial LLC, IN — FP1 LLC, BDIF LLC and CM — NP
LLC, The Hartford Growth Opportunities Fund, Hartford Growth Opportunities HLS Fund, Quissett
Investors (Bermuda) L.P., Quissett Partners, L.P., The Hartford Capital Appreciation Fund, Bay Pond
Partners, L.P. and Bay Pond Investors (Bermuda) L.P.




          “Securityholders Agreement” means that certain Fourth Amended and Restated
Securityholders Agreement, dated as of the date hereof, by and among the Company, CDP, 1818
Partners, LLC, DRP Holdco, LLC, Silver Rock Financial LLC, IN — FP1 LLC, BDIF LLC and CM — NP
LLC, The Hartford Growth Opportunities Fund, Hartford Growth Opportunities HLS Fund, Quissett
Investors (Bermuda) L.P., Quissett Partners, L.P., The Hartford Capital Appreciation Fund, Bay Pond
Partners, L.P. and Bay Pond Investors (Bermuda) L.P.




          “Transaction Agreements” shall mean the LLC Agreement, the Securityholders Agreement,
the Registration Rights Agreement, and the Wellington Agreement.




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ARTICLE VII

MISCELLANEOUS




     7.01. Entire Agreement. This Agreement (together with the Schedules hereto and the documents referred to herein)
contains, and is intended as, a complete statement of all of the terms of the arrangements between
the parties with respect to the matters provided for herein, and supersedes any previous
agreements, understandings, representations and warranties, whether written or oral, between the
parties with respect to those matters.



     7.02. Remedies.




	 	(a)	 	In the event of any actual or threatened breach of any of the
provisions of this Agreement, the parties hereto agreement that the
non-breaching party may avail itself of any statutory, equitable, or common law
remedy.






	 	(b)	 	Each of the parties hereto recognizes and acknowledges that a
breach by it of any covenants or agreements contained in this Agreement will
cause the other party to sustain damages for which it would not have an adequate
remedy at law for money damages, and therefore each of the parties hereto
agrees that in the event of any such breach the aggrieved party shall be
entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any
other remedy to which it may be entitled, at law or in equity.






	 	(c)	 	All rights, powers and remedies provided under this Agreement
or otherwise available in respect hereof at law or in equity shall be
cumulative and not alternative, and the exercise of any thereof by any party
shall not preclude the simultaneous or later exercise of any other such right,
power or remedy by such party.





     7.03. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of
Nevada, without effect to the principles of conflicts of law thereof.



     7.04. Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF
THIS AGREEMENT OR ANY ANCILLARY AGREEMENT OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION
OR ENFORCEMENT THEREOF.



     7.05. Venue; Submission to Jurisdiction. ANY AND ALL SUITS, LEGAL ACTIONS OR PROCEEDINGS ARISING OUT OF THIS AGREEMENT SHALL BE
BROUGHT ONLY IN A STATE OR FEDERAL COURT IN AND FOR LAS VEGAS, NEVADA AND EACH PARTY TO THIS
AGREEMENT HEREBY SUBMITS TO AND ACCEPTS THE EXCLUSIVE JURISDICTION OF SUCH COURTS FOR THE PURPOSE
OF SUCH SUITS, LEGAL ACTIONS OR PROCEEDINGS. TO THE FULLEST EXTENT



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PERMITTED BY LAW, EACH PARTY
HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH HE OR IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OR ANY SUCH SUIT, LEGAL ACTION OR PROCEEDING IN SUCH COURT AND HEREBY FURTHER
WAIVES ANY CLAIM THAT ANY SUIT, LEGAL ACTION OR PROCEEDING BROUGHT IN SUCH COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.




     7.06. Amendment; Waiver. No provision of this Agreement may be amended, waived or modified except by an instrument
or instruments in writing signed by all the parties hereto. The failure of any party hereto to
enforce at any time any provision hereof shall not be construed to be a waiver of such provision,
nor in any way to affect the validity hereof or any part hereof or the right of any party
thereafter to enforce each and every such provision.



     7.07. Notices. All notices and other communications under this Agreement shall be in writing and shall be
deemed given when delivered personally, mailed by registered mail, return receipt requested, sent
by documented overnight delivery service or, to the extent receipt is confirmed, by telecopy to the
parties at the following addresses (or to such other address as a party may have specified by
notice given to the other party pursuant to this provision):


To the Company:



Diamond Resorts Parent, LLC

10600 West Charleston Boulevard

Las Vegas, NV 89135

Attention: Stephen J. Cloobeck and David F. Palmer

Facsimile: (702) 798-8840



with a copy, which shall not constitute notice, to:



Katten Muchin Rosenman LLP

525 West Monroe Street

Suite 1900

Chicago, IL 60661

Attention: Howard S. Lanznar

Facsimile: (312) 902-1061



To CDP:



Cloobeck Diamond Parent, LLC

10600 West Charleston Boulevard

Las Vegas, NV 89135

Attention: Stephen J. Cloobeck and David F. Palmer

Facsimile: (702) 798-8840



with a copy, which shall not constitute notice, to:



Katten Muchin Rosenman LLP

525 West Monroe Street

Suite 1900

Chicago, IL 60661

Attention: Howard S. Lanznar

Facsimile: (312) 902-1061




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     7.08. Severability. If any provision of this Agreement is held by any court of competent jurisdiction to be
illegal, invalid or unenforceable, such provision shall be of no force and effect, but the
illegality, invalidity or unenforceability shall have no effect upon and shall not impair the
enforceability of any other provision of this Agreement.



     7.09. Assignment and Binding Effect. None of the parties hereto may assign any of its rights or delegate any of its duties under
this Agreement without the prior written consent of the others, except that CDP may assign its
rights to any Person who purchases all or substantially all of the assets of CDP, and such
Person(s) shall assume the obligations of CDP hereunder. All of the terms and provisions of this
Agreement shall be binding on, and shall inure to the benefit of, the parties hereto and their
respective legal successors and permitted assigns of the parties.



     7.10. No Benefit to Others. The representations, warranties, covenants and agreements contained in this Agreement are
for the sole benefit of the parties hereto and their respective successors and permitted assigns
and they shall not be construed as conferring and are not intended to confer any rights on any
other Persons.



     7.11. Counterparts. This Agreement may be executed in two (2) or more original, facsimile or PDF counterparts,
each of which shall be deemed an original, and each party thereto may become a party hereto by
executing a counterpart hereof. This Agreement and any counterpart so executed shall be deemed to
be one and the same instrument. Additionally, to the extent receipt is confirmed, this Agreement
may be executed and sent by telecopy with the original to follow by documented overnight delivery
service.



     7.12. Interpretation. Article titles, headings to sections and the table of contents are inserted for convenience
of reference only and are not intended to be a part or to affect the meaning or interpretation
hereof. The Schedules referred to herein shall be construed with and as an integral part of this
Agreement to the same extent as if they were set forth verbatim herein. As used herein, “include”,
“includes” and “including” are deemed to be followed by “without limitation” whether or not they
are in fact followed by such words or words of like import, “writing”, “written” and comparable
terms refer to printing, typing, lithography and other means of reproducing words in a visible
form, references to a Person are also to its successors and permitted assigns, “hereof”, “herein”,
“hereunder” and comparable terms refer to the entirety hereof and not to any particular article,
section or other subdivision hereof or attachment hereto, references to any gender include
references to the plural and vice versa, references to this Agreement or other documents are as
amended or supplemented from time to time, references to “Article”, “Section” or another
subdivision or to an attachment or “Schedule” are to an article, section or subdivision hereof or
an attachment or “Schedule” hereto, references to “generally accepted accounting principles” shall
mean generally accepted accounting principles in the United States.



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          The parties hereto have executed this Redemption Agreement as of the date first written above.




	 	 	 	 	 
	 	COMPANY:


DIAMOND RESORTS PARENT, LLC

a Nevada limited liability company

 	 
	 	By:  	/s/ David F. Palmer
 	 
	 	 	Name:  	David F. Palmer 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 
	 	CDP:


CLOOBECK DIAMOND PARENT, LLC

 	 
	 	By:  	/s/ Stephen J. Cloobeck
 	 
	 	 	Name:  	Stephen J. Cloobeck 	 
	 	 	Title:  	Sole Manager 	 



[Signature Page to Redemption Agreement]