Document:

Exhibit101-Diamond-MasterAgreementHMCSandJHJM

MASTER AGREEMENT
THIS MASTER AGREEMENT (this “Agreement”), dated as of January 6, 2015 (the “Closing Date”), is by and among Diamond Resorts International, Inc., a Delaware corporation (“DRII”), Diamond Resorts Corporation, a Maryland corporation (“DRC”; together with DRII, the “DRII Parties”), Hospitality Management and Consulting Service, L.L.C., a Nevada limited liability company (“HMCS”), Stephen J. Cloobeck, individually (“SJC”), Cloobeck Companies, LLC, a Nevada limited liability company (“Cloobeck Companies”), JHJM Nevada I, LLC, a Nevada limited liability company formerly known as Diamond Resorts, LLC (“JHJM”; JHJM and Cloobeck Companies being referred to herein, collectively, as the “SJC Entities”; and SJC and the SJC Entities being referred to herein as the “SJC Parties”), and, solely for purposes of Sections 1(a)(ii), 1(b) and 10 hereof, Nevada Resort Properties Polo Towers Limited Partnership, a Nevada limited partnership (“Polo Towers”).  Each of the DRII Parties, HMCS and the SJC Parties is referred to herein as a “Party” and, collectively, as the “Parties.”
RECITALS
WHEREAS, DRC and HMCS are parties to that certain Amended and Restated Homeowner Association Oversight Consulting and Executive Management Services Agreement, dated as of December 31, 2012 (the “HMCS Agreement”), pursuant to which HMCS provides executive management and consulting services to DRC.
WHEREAS, HMCS and JHJM are parties to that certain Amended and Restated Services Agreement, dated as of December 31, 2012 (the “Existing Services Agreement”), pursuant to which JHJM provides (i) the services of SJC to the DRII Parties, and (ii) strategic oversight and direction of hospitality services provided by the DRII Parties.
WHEREAS, each of JHJM and Polo Towers is party, together with Polo Towers Master Owners Association, Inc., a Nevada corporation (the “Association”), and other parties thereto, to that certain Amended and Restated Grant of Reciprocal Easements and Declaration of Covenants, Conditions and Restrictions, dated as of June 19, 2002, recorded August 27, 2002 in Book 20020827 as Instrument No. 02443 in the Recorder’s Office of Clark County, Nevada (“Official Records”) (as modified by the document entitled “Amendment to Article 9 (Only) of Amended and Restated Grant of Reciprocal Easements and Declaration of Covenants, Conditions and Restrictions dated as of March 25, 2003, recorded March 26, 2003 in Book 20030326 as Instrument No. 00730 of the Official Records, as further modified by the document entitled “Amendment to Article Four (Only) of Amended and Restated Grant of Reciprocal Easements and Declaration of Covenants, Conditions and Restrictions” dated as of June 26, 2003, recorded June 26, 2003 in Book 20030626 as Instrument No. 03913 of the Official Records, and as further modified by the document entitled “Amendment to Article 10.02 (Only) of Amended and Restated Grant of Reciprocal Easements and Declaration of Covenants, Conditions and Restrictions” dated as of October 1, 2003, recorded October 21, 2003 in Book 20031021 as Instrument No. 00837 of the Official Records, the “REA”), pursuant to which, among other things, JHJM and Polo Towers are entitled to rights, and subject to restrictions, with respect to, or otherwise relating to, parcels of land specified therein.

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WHEREAS, Cloobeck Companies and Chautauqua Management, LLC, a Nevada limited liability company of which David F. Palmer, DRII’s president and chief executive officer, is the sole manager (“Chautauqua”), own all of the outstanding equity interests in HMCS, and Cloobeck Companies and Chautauqua desire to sell to DRC, and DRC desires to purchase from Cloobeck Companies and Chautauqua, all of the outstanding equity interests in HMCS pursuant to a Membership Interest Purchase Agreement to be entered into among Cloobeck Companies, Chautauqua and DRC (the “HMCS Purchase Agreement”).
WHEREAS, JHJM and HMCS desire to terminate the Existing Services Agreement, upon the terms and conditions stated in this Agreement.
WHEREAS, each of JHJM and Polo Towers desires to assign to DRC, and DRC desires to assume from JHJM and Polo Towers, all of its right, title and interest in and to, and all of its obligations under, the “greeter easement” set forth in Article 8 of the REA, free of any liens or other encumbrances (other than liens and encumbrances set forth in the REA), pursuant to an Assignment and Assumption Agreement to be entered into among JHJM, Polo Towers and DRC (the “Assignment Agreement”).
WHEREAS, SJC is the sole manager of or otherwise has the ability to control each of Cloobeck Companies and JHJM, and SJC and/or his immediate family members (or entities of which SJC and/or his immediate family members own the outstanding equity interests or of which SJC and/or his immediate family members are otherwise the ultimate beneficiaries) beneficially own all of the outstanding equity interests of Cloobeck Companies and JHJM. 
WHEREAS, SJC controls and beneficially owns, directly or indirectly, substantially all of the equity of Polo Towers.
WHEREAS, SJC and each of the other SJC Parties will derive substantial benefit from the consummation of the transactions contemplated hereby and by the other Transaction Documents (as defined below).
WHEREAS, the Audit Committee (the “Audit Committee”) of the Board of Directors of DRII (the “Board”), consisting solely of independent members of the Board, none of whom has an economic or other interest in the transactions contemplated by this Agreement or any of the other Transaction Documents (collectively, the “Transactions”), acting in accordance with the charter of the Audit Committee and DRII’s Related Party Transactions Policy, unanimously approved, and recommended that the Board approve, the execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation of the Transactions.
WHEREAS, the Board, acting upon the recommendation of the Audit Committee, by unanimous vote of all of the directors (other than SJC and Mr. Palmer, the only two directors with an economic or other interest in the Transactions and each of whom abstained from such vote and the related deliberations of the Board), (i) determined that it is in the best interests of DRII and its stockholders to enter into this Agreement and each of the other Transaction Documents with the SJC Parties, and (ii) approved the execution, delivery and performance of this Agreement and each of the other Transaction Documents and the consummation of the Transactions.

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NOW THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement and each of the other Transaction Documents and of the Transactions, the Parties, severally and not jointly, hereby agree as follows:
AGREEMENT
1.Closing of Transactions; Cash Consideration.  
(a)    Transaction Documents.  On the Closing Date:
(i)    Each of DRC and Cloobeck Companies shall execute and deliver (and the Parties acknowledge that Chautauqua is also contemporaneously executing and delivering) the HMCS Purchase Agreement, together with any other agreements and instruments to which such Person will be a party or by which such Person will be bound in connection with the Transactions; and
(ii)    Each of JHJM, Polo Towers and DRC shall execute and deliver the Assignment Agreement.
(b)    Cash Consideration.  In consideration of the covenants and agreements of the SJC Parties and Polo Towers contained in this Agreement and each of the other Transaction Documents and of the Transactions, DRII shall deliver to SJC or his designee(s) (and each of the SJC Parties and Polo Towers hereby authorizes and directs DRII to deliver to SJC or his designee(s)), on or prior to January 30, 2015, an amount equal to $16,500,000 (the “Cash Consideration”) by wire transfer of immediately available funds in accordance with written wire instructions provided by, or on behalf of, SJC to DRII in advance of the Closing Date.  Each of the SJC Parties and Polo Towers acknowledges and agrees that the receipt of the Cash Consideration by SJC or his designee(s) shall be deemed to be the receipt by such SJC Party or Polo Towers, as applicable, of all or any portion of such Cash Consideration to which such SJC Party or Polo Towers, as applicable, may be entitled.
(c)    The Closing.  The consummation of the transactions contemplated by this Agreement (the “Closing”) shall be effective for all purposes under this Agreement as of 12:01 a.m. in Las Vegas, Nevada on January 1, 2015 (the “Effective Time”).  The Parties hereto acknowledge and agree that all proceedings at the Closing shall be deemed to have been taken and all documents to be executed and delivered by all Parties at the Closing shall be deemed to have been taken and executed simultaneously.
(d)    Allocation of Cash Consideration.  DRII may prepare and deliver to the SJC Parties an allocation of all or any portion of the aggregate consideration paid, payable, given or to be given, including the Cash Consideration, with respect to the Transactions, including for purposes of preparing and filing of any income tax returns; and each Party shall file tax returns in a manner consistent with any such allocation.
2.    SJC Services.  

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(a)    Termination of Existing Services Agreement.  Each of HMCS and JHJM hereby covenants, acknowledges and agrees that, notwithstanding the terms set forth in the Existing Services Agreement (including the termination provisions set forth in Section 4 thereof, the compliance with which is hereby waived by each of HMCS and JHJM), effective as of the Effective Time: (a) the Existing Services Agreement shall be terminated in its entirety, by mutual agreement of HMCS and JHJM, without further action by HMCS or JHJM, and will have no further force or effect; and (b) neither HMCS nor JHJM shall be entitled to any rights (including any rights to payment of any amounts owed or owing under Sections 2, 3 or 4 of the Existing Services Agreement), or be subject to any obligations or liabilities, under the Existing Services Agreement; provided, however, that, Section 7.4 (Indemnification of Service Provider) of the Existing Services Agreement, together with such portions of the Existing Services Agreement as are necessary to enforce the covenants and agreements of HMCS set forth in Section 7.4 thereof, shall continue in full force and effect and survive the termination of the Existing Services Agreement pursuant to this Section 2(a) in accordance with the terms thereof.
(b)    Service as Chairman.  DRII hereby covenants and agrees that, at least through December 31, 2017, so long as SJC is serving as a member of the board of directors of DRII (the “Board”), SJC shall continue to be the Chairman of the Board (the “Chairman”), and the Company shall take such action as shall be necessary to effectuate such designation.  So long as SJC is serving as Chairman, DRII shall pay to SJC, and SJC shall be entitled to receive from DRII, commencing with the 2015 annual meeting of DRII’s stockholders, (i) an annual retainer equal to 200% of the annual retainer, and (ii) annual equity compensation equal to 200% of the annual equity compensation, in each case payable to members of the Board who are not officers or employees of the Company or the Vice Chairman of the Board (excluding, for the avoidance of doubt, any additional amounts payable for service on any committee of the Board or as chair of any such committee).  Such annual retainer and equity compensation shall be paid at the same times and on the same bases as applicable to the other members of the Board, and the Chairman shall be entitled to elect to receive his annual retainer in stock pursuant to DRII’s Non-Officer Director Share Accumulation Program.
(c)    Expense Reimbursement.
(i)    So long as SJC is serving as Chairman, the DRII Parties shall pay on behalf of SJC (or shall otherwise reimburse SJC for) all reasonable and ordinary expenses incurred by SJC in the course of SJC’s providing of services to, or on behalf of, the DRII Parties in his capacity as Chairman, subject in all respects to DRII’s expense reimbursement policy, as may be in effect from time to time (the “Reimbursement Policy”); provided that the maximum reimbursable amounts for SJC shall not be reduced below the amounts set forth in the Reimbursement Policy as in effect at the Effective Time (in the form previously provided to SJC) without the prior written consent of SJC.  In this regard, SJC shall file expense reports with respect to such expenses in accordance with the Reimbursement Policy, including adequate documentation.  Expense reimbursements shall be made in a timely manner consistent with the timeframes applicable to expense reimbursement for other senior executives of the DRII Parties.

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(ii)    So long as SJC is serving as Chairman, SJC shall be entitled to the benefits of, and subject to the terms set forth in, the aircraft use policy of DRII, as may be in effect from time to time (the “Aircraft Use Policy”).  In accordance with the Aircraft Use Policy, SJC shall execute and deliver a Time Sharing Agreement, in substantially the form previously provided to SJC, which shall set forth terms under which SJC shall reimburse the DRII Parties for expenses related to any use of aircrafts of the DRII Parties that is not for a bona fide business purpose in the course of SJC’s providing of services to, or on behalf of, the DRII Parties in his capacity as Chairman.
3.    Aircraft Agreements.
(a)    N702DR Lease Agreement.  DRC hereby covenants, acknowledges and agrees that it shall not terminate (or provide notice to N702DR, LLC, or to any successor in interest under the N702DR Lease Agreement, to terminate) the N702DR Lease Agreement pursuant to Section 18(b) thereof if and to the extent that any such termination would be effective on or prior to December 31, 2017; provided, that, for the avoidance of doubt, the Parties hereby acknowledge and agree that nothing set forth in this Section 3(a) shall be deemed to limit, modify or otherwise affect the rights of either of the parties to the N702DR Lease Agreement to terminate the N702DR Lease Agreement pursuant to Section 18 thereof, other than as expressly set forth in this Section 3(a).
(b)    Indemnification for N189DR Lease Guaranty.  DRC shall, for so long as SJC or any of his Affiliates shall be subject to the N189DR Lease Guaranty, indemnify and hold harmless SJC and each of his Affiliates (a “SJC Indemnified Party”) from any and all amounts that SJC is actually required to pay to Banc of America Leasing & Capital, LLC (or its successor-in-interest) under the N189DR Lease Guaranty.  SJC covenants, acknowledges and agrees to comply (and cause his Affiliates to comply), for so long as SJC or any of his Affiliates shall be subject to the N189DR Lease Guaranty, with all of the covenants and agreements set forth in the N189DR Lease Guaranty, including the “Financial Covenants” set forth in Section 4A thereof.
4.    Indemnification and Insurance.
(a)    Indemnification.  The DRII Parties hereby agree that all rights to indemnification by the DRII Parties or any of their respective subsidiaries or Affiliates existing as of the Effective Time in favor of any SJC Party as provided in such DRII Party’s certificate of incorporation or bylaws, in each case as in effect at the Effective Time, or pursuant to any other agreements in effect at the Effective Time, including, for the avoidance of doubt, the indemnification obligations of (i) DRII pursuant to that certain Indemnification Agreement, dated as of July 18, 2013, by and between DRII and SJC, and (ii) HMCS pursuant to Section 7.4 of the Existing Services Agreement, shall survive the consummation of the Transactions and shall remain in full force and effect, and the DRII Parties shall honor and fulfill (and shall cause their respective subsidiaries and Affiliates to honor and fulfill) in all material respects such rights to indemnification.  In addition, for a period of six years after the Effective Time, the DRII Parties shall not, and shall not permit HMCS to amend, repeal or modify any provision in HMCS’s operating agreement relating to the exculpation or indemnification of any officers, members or managers in a manner materially adverse to any SJC Party that may be entitled to such exculpation or indemnification thereunder (unless 

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such amendment, repeal or modification is required by law), it being the intent of the Parties that the officers, members and managers of HMCS shall continue to be entitled to such exculpation and indemnification to the extent provided in HMCS’s operating agreement (as in effect at the Effective Time).
(b)    D&O Insurance.  DRII shall maintain in full force and effect, for a period of not less than six years after the Effective Time (the “D&O Insurance Period”), at DRII’s expense, liability insurance applicable to directors and officers (the “D&O Insurance”) from established and reputable insurers, in such amount, and otherwise on such terms, as are determined in good faith by the Board.  SJC shall be covered by such policy or policies in such a manner as to provide SJC the same rights and benefits as are accorded to members of the Board.  DRII shall advise SJC as to the terms of, and the amounts of coverage provided by, any liability insurance policy described in this Section 4(b) and shall promptly notify SJC if, at any time, any such insurance policy will expire or be terminated, the amount of coverage under any such insurance policy will be decreased or the terms of any such insurance policy will materially change.  Notwithstanding the foregoing, in the event that SJC ceases to be a director of DRII, DRII may, at its option, purchase a “tail” prepaid policy on the D&O Insurance covering the then-remaining portion of the D&O Insurance Period, and such “tail” policy shall thereafter satisfy the obligations of DRII under this Section 4(b). 
(c)    Key Man Insurance.  The DRII Parties shall maintain in full force and effect, through December 31, 2017, the portion of the SJC Key Man Policy as to which SJC’s insurance trust is the beneficiary (the “Applicable Portion”) and pay, when due, any and all premiums with respect thereto; provided, however, that the DRII Parties may, at their option, prepay the premiums for the Applicable Portion, and such prepayment shall thereafter satisfy the obligations of the DRII Parties to pay premiums therefor under this Section 4(c).  Following December 31, 2017, SJC or SJC’s Insurance Trust may pay the premiums for the Applicable Portion of such life insurance.
(d)    Medical Insurance; COBRA.  So long as SJC is serving as Chairman, the DRII Parties shall provide to SJC and his spouse and children, at the expense of the DRII Parties (subject to customary co-payments, deductibles, employee contributions, and similar provisions), medical insurance to the extent such individuals are eligible under the terms of the plans of the DRII Parties, that may be in effect from time to time (the “Medical Insurance”), and, if such persons are not eligible under such plans, the DRII Parties shall reimburse SJC and his spouse and children for such Medical Insurance with respect to coverage for so long as SJC is serving as Chairman.  Upon expiration or termination (for any reason) of SJC’s services as Chairman, to the extent SJC and his spouse and children are eligible under the terms of the plans of the DRII Parties that may be in effect from time to time, SJC and his spouse and children shall be entitled to continuation of the Medical Insurance for eighteen (18) months pursuant to COBRA, provided that SJC and his spouse and children timely elect COBRA continuation coverage and timely pay all premiums therefor.  
5.    Restrictive Covenants.
(a)    Acknowledgement.  The DRII Parties and the SJC Parties each acknowledge and agree that: (i) the services provided by JHJM and SJC pursuant to the Existing Services 

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Agreement and the HMCS Agreement were, and the services to be provided by SJC in his capacity as Chairman are, of a special, unique, unusual, extraordinary and intellectual character; (ii) the DRII Parties and their respective subsidiaries and Affiliates provide services and compete within the fractional vacation ownership industry, including managing, marketing, selling, acquiring and developing fractional vacation ownership interests (which, for the avoidance of doubt, the Parties hereby acknowledge and agree include both vacation ownership interests sold as points or intervals) and resorts and providing consumer financing for purchases of fractional vacation ownership interests (the “Business”); (iii) the DRII Parties are relying on the covenants and agreements of the SJC Parties set forth in this Section 5 in recognition of the foregoing, and without such covenants and agreements neither DRII nor DRC would enter into this Agreement or any of the other Transaction Documents to which it is a party or consummate the Transactions (including DRC’s acquisition of all of the outstanding membership interests of HMCS pursuant to the HMCS Purchase Agreement); (iv) the provisions of this Section 5 are reasonable and necessary to protect the businesses of the DRII Parties and their respective subsidiaries and Affiliates; and (v) the Cash Consideration and the other consideration paid, payable, given or to be given to the SJC Parties in connection with the Transactions are sufficient consideration to make the covenants and agreements set forth in this Section 5 enforceable.  For the avoidance of doubt, the Parties acknowledge and agree that nothing contained in this Section 5 is intended to, nor shall, limit or in any other way affect SJC’s fiduciary or other duties as Chairman and a director of DRII or his obligations under DRII’s charter documents and corporate governance policies.
(b)    Confidential Information.  As a result of the nature of the services provided, and to be provided, to the DRII Parties and their respective subsidiaries and Affiliates, including services under the Existing Services Agreement and the HMCS Agreement and SJC’s continued service as Chairman, each of the SJC Parties hereby acknowledges that the SJC Parties have had and will have access to or knowledge of Confidential Information which, if revealed, could be detrimental to the DRII Parties or any of their respective subsidiaries or Affiliates, and that the DRII Parties have a protectable interest in such Confidential Information.  Each of the SJC Parties covenants and agrees that it will not, without the prior written consent of the DRII Parties, and except as necessary for SJC to perform his duties as Chairman, directly or indirectly, disclose to or discuss with any Person, any Confidential Information.  The restrictions in this Section 5(b) shall not apply to information which after disclosure to or discovery by any SJC Party becomes generally available to the public otherwise than through a breach of this Section 5(b).  In addition, each SJC Party may disclose Confidential Information to the extent that such SJC Party is required by judicial or administrative order to disclose such Confidential Information, as long as such SJC Party (x) promptly notifies the DRII Parties of such required disclosure (to the extent legally permissible) so that the DRII Parties may, at their sole option and election, seek an appropriate protective order or waive such SJC Party’s compliance with the provisions of this Section 5(b), (y) cooperates with the DRII Parties (at the expense of the DRII Parties) to limit or restrict such disclosure, and (z) if disclosure of such Confidential Information is required, in the opinion of such SJC Party’s legal counsel who has been informed of the relevant facts, discloses only that portion of the Confidential Information that is legally required to be disclosed in the opinion of such counsel.  Each SJC Party shall take all reasonable steps to safeguard Confidential Information and protect it against disclosure, misuse, loss or theft.  The obligations of this Section 5(b) shall survive the termination of this Agreement and the expiration of the Restricted Period (as defined below).

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(c)    Non-Competition.  Each SJC Party hereby agrees that from the date hereof through December 31, 2017 (the “Restricted Period”), such SJC Party shall not (and shall cause such SJC Party’s Affiliates not to), without the prior express written approval of the DRII Parties, directly or indirectly, on his or its own behalf or on behalf of others (other than as required in the course of SJC’s providing of services to, or on behalf of, the DRII Parties in his capacity as Chairman), invest in, own, manage, operate, finance, control or participate in any way in the ownership, management, operation, financing or control of, be employed or otherwise engaged by, lend any SJC Party’s credit, name or any similar name to (including through the grant of a license to use or otherwise exploit SJC’s Persona or otherwise), provide consulting or other services to, or in any other manner be connected or associated for financial benefit with, any Person that is engaged in the Restricted Business or any part thereof within any country in which either of the DRII Parties or any of their respective subsidiaries or Affiliates is engaged in the Business; provided, however, that nothing herein shall prohibit any SJC Party from (i) purchasing and/or passively owning securities of a publicly traded corporation or other entity so long as the SJC Parties, together with each of their respective Affiliates, collectively, do not own at any time more than five percent (5%) of the outstanding shares or common equity interests of any such publicly traded corporation or other entity that engages in any way in the Restricted Business, or (ii) serving as a director, or otherwise participating in the business of, a corporation or other entity of which a not more than de minimis portion (from a financial or any other perspective) of its business consists of managing, marketing, selling, acquiring and/or developing, and/or financing the purchases of, fractional vacation ownership interests, so long as no SJC Party is directly involved in any such activities.
(d)    Non-Solicitation; Non-Interference. Each SJC Party hereby agrees that during the Restricted Period, such SJC Party shall not (and shall cause such SJC Party’s Affiliates not to), without the prior express written approval of the DRII Parties, directly or indirectly, on his or its own behalf or on behalf of others (other than as required in the course of SJC’s providing of services to, or on behalf of, the DRII Parties in his capacity as Chairman), except with respect to those persons listed on Exhibit A attached hereto, (i) solicit (other than through general advertising), employ or otherwise engage any person who is then currently an employee of either of the DRII Parties or any of their respective subsidiaries or Affiliates, or any other person who was employed by either of the DRII Parties or any of their respective subsidiaries or Affiliates within the six-month period prior to the act of solicitation, employment or engagement, as applicable (each, a “Covered Person”), or in any manner induce or attempt to induce any then current employee of either of the DRII Parties or any of their respective subsidiaries or Affiliates to terminate his or her employment or other relationship with such DRII Party, subsidiary or Affiliate; (ii) induce or attempt to induce any customer, client, vendor or business partner of either of the DRII Parties or any of their respective subsidiaries or Affiliates to cease doing business, or reduce its business relationship, with any such DRII Party, subsidiary or Affiliate; or (iii) interfere with the relationship of either of the DRII Parties or any of their respective subsidiaries or Affiliates with any Person, including any Covered Persons or any customer, client, vendor or business partner.
(e)    Enforcement.  The Parties hereby acknowledge that the time, scope, geographic area and other provisions of this Section 5 have been specifically negotiated by sophisticated parties and agree that all such provisions are reasonable under the circumstances of the Transactions and are necessary to protect the Confidential Information and the goodwill of the 

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businesses of the DRII Parties and their respective subsidiaries and affiliates.  Each SJC Party hereby expressly agrees and acknowledges that the restrictions contained in this Sections 5 do not preclude such SJC Party from earning a livelihood, nor do they unreasonably impose limitations on such SJC Party’s ability to earn a living.  In addition, each SJC Party agrees and acknowledges that the potential harm to the DRII Parties and their respective subsidiaries and Affiliates of its non-enforcement outweighs any harm to such SJC Party of its enforcement by injunction or otherwise.  Accordingly, each SJC Party hereby agrees not to challenge the validity or enforceability of the restrictions contained herein.  If any covenant in this Section 5 is held to be unreasonable, arbitrary or against public policy, such covenant shall be considered to be divisible with respect to scope, time and geographic area, and the maximum scope, time or geographic area, or all of them, allowable as a court of competent jurisdiction may determine to be reasonable, not arbitrary and not against public policy, shall be effective, binding and enforceable against the SJC Parties.  Each of the SJC Parties hereby acknowledges that a breach by such SJC Party of its or his obligations hereunder will cause irreparable harm to the DRII Parties and their respective subsidiaries and Affiliates.  Accordingly, each of the SJC Parties hereby acknowledges that the remedy at law for a breach of its or his obligations under this Section 5 will be inadequate and agrees that, in the event of a breach or threatened breach of this Section 5, the DRII Parties and their respective subsidiaries and Affiliates shall be entitled, in addition to all other available remedies, to an injunctive order and/or injunction restraining any breach and requiring the enforcement of, and the prevention of any violations of, the provisions hereof (without the necessity of showing economic loss and without any bond or other security being required).  
6.    Right of Publicity.  
(a)    License.  SJC hereby grants to the DRII Parties during the Restricted Period the non-exclusive, perpetual, royalty-free and non-transferable right and license to use, display, publish, perform, record, copy, broadcast, transmit, distribute, combine with other works and otherwise exploit SJC’s Persona, in any medium whatsoever (whether now known or hereafter created), solely in connection with the DRII Parties’ operation of the Business (the “License”).  In addition, during the Restricted Period and thereafter, each of the DRII Parties shall have the right to reference SJC publicly, by name, in a factual manner, as being the founder of the DRII Parties and as to his then-current or past roles or positions with any of the DRII Parties in any tangible, digital or other medium whatsoever (whether now known or hereafter created) and, to the extent necessary, SJC hereby grants the DRII Parties a non-exclusive, perpetual, royalty-free and transferable right and license to do so.  Notwithstanding anything set forth herein, nothing contained herein will require the DRII Parties to exercise or exploit any of its rights relating to SJC’s Persona. 
(b)    Sublicense.  The License is only sublicensable to (i) Affiliates of the DRII Parties, and (b) any Person who needs such a sublicense to perform services for the benefit of the DRII Parties.  The DRII Parties shall be responsible for any of their sublicensees’ compliance with the terms of this Section 6 to the same extent as if such sublicensees were the “licensee” hereunder, and shall be responsible for any breach hereof by any such sublicensee.
(c)    Approval.  Prior to the publication, public broadcast, or other public distribution or dissemination of any advertising, promotional or marketing materials displaying or 

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otherwise comprising any elements of SJC’s Persona, the DRII Parties shall submit to SJC a representative sample of each such usage for SJC’s prior written approval, which approval shall not be unreasonably conditioned, withheld or delayed; provided, however, that the DRII Parties shall have no obligation to submit to SJC any advertising, promotional or marketing materials which are not substantially or materially different than materials used in connection with the operation of the Business by either of the DRII Parties or any of their respective subsidiaries or Affiliates prior to the Closing Date.  Notwithstanding anything to the contrary contained in this Section 6, following the expiration of the Restricted Period (but in no event for longer than one year thereafter), the DRII Parties shall have the right to use, display and distribute any tangible marketing or other materials (including hard copies of digital media) displaying or otherwise comprising any elements of SJC’s Persona which were printed or otherwise produced or created prior to expiration of the Restricted Period.
(d)    Ownership and Restrictions.  Each of the DRII Parties acknowledges that, as between the DRII Parties, on the one hand, and SJC, on the other hand, SJC owns the exclusive rights, title and interest in and to SJC’s Persona.  Neither of the DRII Parties shall at any time, directly or indirectly, do or cause to be done any act contesting or in any way impairing SJC’s rights, title or interest in SJC’s Persona or SJC’s use of SJC’s Persona.  Each of the DRII Parties specifically acknowledges that its permitted use of SJC’s Persona will not create any right, title or interest in SJC’s Persona, and that every permitted use of SJC’s Persona by such DRII Party shall inure to the benefit of SJC.
7.    Release.  
(a)    SJC Parties’ Release.  Each SJC Party, on behalf of itself or himself and its or his respective Affiliates, directors, officers, members, managers, partners, representatives, successors and assigns (excluding, for the avoidance of doubt, each of the DRII Parties and their respective subsidiaries and Affiliates, the “SJC Releasing Parties”), effective upon the Effective Time, unconditionally and irrevocably releases and forever discharges, to the fullest extent permitted by law, each of the DRII Parties, HMCS and each of their respective subsidiaries and Affiliates and their respective current and former equityholders, members, managers, officers, employees, successors and assigns (excluding, for the avoidance of doubt, each of the SJC Parties, the “DRII Released Parties”), of and from any and all claims, demands, actions, causes of action, orders, contracts, debts and liabilities whatsoever, whether known or unknown, suspected or unsuspected, both at law and in equity (“Claims”), which such SJC Releasing Party now has, has ever had or may hereafter have against the DRII Released Parties arising prior to the Closing Date or on account of or arising out of any matter, cause or event occurring prior to the Closing Date, but specifically excluding all Claims (i) arising under this Agreement or any of the other Transaction Documents or contemplated by Section 4 of this Agreement, (ii) resulting from any fraud or intentional misconduct of any of the DRII Released Parties, (iii) any claim by any SJC Releasing Party pursuant to Section 7.4 of the Existing Services Agreement; and (iv) any claim in such SJC Releasing Party’s capacity solely as a stockholder, officer or director of either DRII Party.
(b)    DRII Parties’ Release.  Each DRII Party, on behalf of itself and its subsidiaries and their respective directors, officers, representatives, successors and assigns (the “DRII Releasing 

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Parties”), effective upon the Effective Time, unconditionally and irrevocably releases and forever discharges, to the fullest extent permitted by law, each SJC Party (the “SJC Released Parties”) of and from any and all Claims, which such DRII Releasing Party now has, has ever had or may hereafter have against the SJC Released Parties arising prior to the Closing Date or on account of or arising out of any matter, cause or event occurring prior to the Closing Date, but specifically excluding all Claims arising under this Agreement or any Transaction Document and any claims resulting from any fraud, intentional misconduct or gross negligence of any SJC Released Party.
8.    Disclosure.  None of the Parties nor any of their respective Affiliates shall make any public announcement or public disclosure regarding this Agreement or any of the other Transaction Documents or any of the Transactions to any Person other than a Party, without the prior written consent of the other Parties, except that (a) DRII may file with the Securities and Exchange Commission (the “SEC”) a Current Report on Form 8-K (the “Announcing Form 8-K”) describing this Agreement and each of the other Transaction Documents and the Transactions, which Announcing Form 8-K shall be in substantially the form mutually agreed upon by the Parties prior to the Closing Date, and file a copy of this Agreement and each of the other Transaction Documents with the SEC as an exhibit to the Announcing Form 8-K or a subsequent periodic report; (b) DRII shall issue a press release announcing the consummation of the Transactions, which press release shall be in substantially the form mutually agreed upon by the Parties prior to the Closing Date (the “Announcing Press Release); (c) DRII may make any public announcement or disclosure that is in substantial conformity with the Announcing Form 8-K, the Announcing Press Release or any other public disclosure then-previously made by any of the Parties in accordance with this Section 8; and (d) the DRII Parties and their respective subsidiaries and Affiliates may make other public announcements or disclosure regarding this Agreement or any of the other Transaction Documents or any of the Transactions to, or as required by, any governmental, quasi-governmental or other regulatory body, including the SEC and the New York Stock Exchange, without the prior consent or approval of any of the SJC Parties; provided, however, that, SJC shall have the reasonable opportunity to review and comment, in advance, upon any such public announcement or disclosure, which comments DRII shall reasonably consider in good faith.  Except for disclosure made in accordance with the immediately preceding sentence, the general forms and substance of communication to employees, customers or business partners shall be subject to the prior approval of SJC, which approval shall not be unreasonably withheld, delayed or conditioned.  
9.    Representations and Warranties of the SJC Parties and HMCS.  Each of the SJC Parties and HMCS (each, a “Subject Party”), severally, and not jointly, hereby represents and warrants to each of the DRII Parties as follows:
(a)    Authorization; Enforcement; Validity.  Such Subject Party is, to the extent an entity, a duly organized and validly existing limited liability company or limited partnership.  Such Subject Party has the requisite power and authority to enter into and perform its or his obligations under this Agreement and each of the other Transaction Documents to which it or he is a party.  The execution and delivery by such Subject Party of this Agreement and each of the other Transaction Documents to which such Subject Party is a party and the consummation of the Transactions have been, to the extent such Subject Party is an entity, duly authorized by the manager, general partner or board of managers (or similar governing body) thereof, and no further consent 

11

or authorization is required by such Subject Party or, to the extent such Subject Party is an entity, its manager, general partner or board of managers (or similar governing body) or members, partners or other equity holders.  This Agreement and each of the other Transaction Documents to which such Subject Party is a party have been duly executed and delivered by such Subject Party, and each of this Agreement and the other Transaction Documents to which such Subject Party is a party constitutes a valid and binding obligation of such Subject Party, enforceable against such Subject Party in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.
(b)    No Conflicts.  The execution and delivery by such Subject Party of this Agreement and each of the other Transaction Documents to which such Subject Party is a party, the performance by such Subject Party of its obligations hereunder and thereunder, and the consummation by such Subject Party of the Transactions will not (i) to the extent such Subject Party is an entity, result in a violation of the articles of organization, the limited liability company operating agreement or limited partnership agreement (or similar organizational documents) of such Subject Party; (ii) conflict with, or constitute a breach or default (or an event which, with the giving of notice or lapse of time or both, constitutes or would constitute a breach or default) under, or give to others any right of termination, amendment, acceleration or cancellation of, or other remedy with respect to, any agreement, indenture or instrument to which such Subject Party is a party; or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to such Subject Party or by which any property or asset of such Subject Party is bound or affected.  Such Subject Party is not required to obtain any consent, authorization or order of or make any filing or registration with, any court or governmental agency or any regulatory or self-regulatory agency in order for it to execute, deliver or perform any of its obligations under, or contemplated by, this Agreement or any of the other Transaction Documents.
(c)    Contracts.  Each of the HMCS Agreement, the Existing Services Agreement, the REA, the N189DR Lease Guaranty and the N702DR Lease Agreement (i) is in full force and effect, (ii) has not been further amended or modified, and (iii) constitutes a valid and binding obligation of any SJC Party that is party thereto, enforceable against each such SJC Party in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.
(d)    Assignment Agreement.  JHJM has valid right, title and interest in and to the “greeter easement” as described in Article 8 of the REA (“JHJM’s Article 8 Rights”), and JHJM has not transferred or otherwise assigned, by contract, operation of law or otherwise, entered into any agreement or understanding to assign, or granted any option or other right to acquire, JHJM’s Article 8 Rights to any other Person.  No SJC Party nor any Affiliate of any SJC Party, other than JHJM or Polo Towers, has any direct or indirect right, title or interest in or to the “greeter easement” as described in Article 8 of the REA.  Upon the consummation of the transactions contemplated by the Assignment Agreement, DRC shall have valid right, title and interest in and to, and be entitled 

12

to the benefit of, JHJM’s Article 8 Rights, free of any liens or other encumbrances (other than liens and encumbrances set forth in the REA).
10.    Representations and Warranties of Polo Towers.  Polo Towers has the requisite power and authority to enter into and perform its obligations under the Assignment Agreement and those provisions of this Agreement applicable to Polo Towers.  Each of this Agreement (as applicable to Polo Towers) and the Assignment Agreement have been duly executed and delivered by Polo Towers and constitutes a valid and binding obligation of Polo Towers, enforceable against Polo Towers in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.  Polo Towers has valid right, title and interest in and to the “greeter easement” as described in Article 8 of the REA (“Polo Towers’ Article 8 Rights”), and Polo Towers has not transferred or otherwise assigned, by contract, operation of law or otherwise, entered into any agreement or understanding to assign, or granted any option or other right to acquire, Polo Towers’ Article 8 Rights to any other Person.  Upon the consummation of the transactions contemplated by the Assignment Agreement, DRC shall have valid right, title and interest in and to, and be entitled to the benefit of, Polo Towers’ Article 8 Rights, free of any liens or other encumbrances (other than liens and encumbrances set forth in the REA).
11.    Representations and Warranties of the DRII Parties.  Each of the DRII Parties severally, and not jointly, hereby represents and warrants to each of the Subject Parties as follows:
(a)    Authorization; Enforcement; Validity.  Such DRII Party is a duly organized and validly existing corporation and has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and each of the other Transaction Documents to which it is a party.  The execution and delivery by such DRII Party of this Agreement and each of the other Transaction Documents to which such DRII Party is a party and the consummation of the Transactions have been duly authorized by the board of directors thereof, and no further consent or authorization is required by such DRII Party or its board of directors or shareholders.  This Agreement and each of the other Transaction Documents to which such DRII Party is a party have been duly executed and delivered by such DRII Party, and each of this Agreement and the other Transaction Documents to which such DRII Party is a party constitutes a valid and binding obligation of such DRII Party, enforceable against such DRII Party in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.
(b)    No Conflicts.  The execution and delivery by such DRII Party of this Agreement and each of the other Transaction Documents to which such DRII Party is a party, the performance by such DRII Party of its obligations hereunder and thereunder, and the consummation by such DRII Party of the Transactions will not (i) result in a violation of the certificate of incorporation or the bylaws (or similar organizational documents) of such DRII Party; (ii) conflict with, or constitute a breach or default (or an event which, with the giving of notice or lapse of time or both, constitutes or would constitute a breach or default) under, or give to others any right of 

13

termination, amendment, acceleration or cancellation of, or other remedy with respect to, any agreement, indenture or instrument to which such DRII Party is a party; or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to such DRII Party or by which any property or asset of such DRII Party is bound or affected.  Such DRII Party is not required to obtain any consent, authorization or order of or make any filing or registration with, any court or governmental agency or any regulatory or self-regulatory agency in order for it to execute, deliver or perform any of its obligations under, or contemplated by, this Agreement or any of the other Transaction Documents.
12.    Definitions.
(a)    “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such first Person.  As used in this definition, “control” (including, with correlative meanings, “controlled by” and “under common control with”) means possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise).  Notwithstanding the foregoing, for purposes of this Agreement, (i) none of the SJC Parties shall be deemed to be an “Affiliate” of either of the DRII Parties or any of their respective subsidiaries or Affiliates, and (ii) none of the DRII Parties or any of their respective subsidiaries shall be deemed to be an “Affiliate” of any of the SJC Parties.
(b)    “Confidential Information” means (a) any and all confidential or proprietary information concerning the respective businesses of DRII, DRC, HMCS and their respective subsidiaries and Affiliates which is not generally known to the public, including historical financial statements, financial projections and budgets, historical and projected sales, capital spending budgets and plans, the names and backgrounds of key personnel, contractors, agents, suppliers and potential suppliers, personnel training and techniques and materials, data, know-how, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, inventions and ideas, past, current and planned research and development, customer lists, current and anticipated customer requirements, price lists, market studies, business plans, computer software (including object code and source code), database technologies, systems, structures, architectures, processes, improvements, devices, discoveries, concepts and methods, and any other information, however documented, of DRII, DRC, HMCS or any of their respective subsidiaries or Affiliates that is a trade secret under applicable law; and (b) any and all notes, analysis, compilations, studies, summaries and other material prepared by or for DRII, DRC, HMCS or any of their respective subsidiaries or Affiliates or any of their respective businesses containing or based, in whole or in part, upon any information included in the foregoing.
(c)    “N189DR” means that certain Embraer model EMB-125BJ aircraft (described on the International Registry as EMBRAER model EMB-135), bearing U.S. Registration No. N189DR (formerly N702DR) and manufacturer’s serial number 14500925. 
(d)    “N189DR Lease Guaranty” means that certain Guaranty, dated as of December 7, 2007, by SJC, individually, in favor of Banc of America Leasing & Capital, LLC, as 

14

amended by that certain Guaranty Amendment, dated as of December 7, 2007, as further amended by that certain Second Guaranty Amendment, dated as of October 13, 2010.
(e)    “N702DR” means that certain Bombardier BD-700-1A10 aircraft (described on the International Registry drop-down menu as Bombardier Global Express XRS) bearing U.S. Registration No. N702DR and manufacturer’s serial number 9184.
(f)    “N702DR Lease Agreement” means that certain Aircraft Lease Agreement, dated as of January 2, 2012, by and between N702DR, LLC, a Delaware limited liability company, as lessor, and DRC, as lessee.
(g)    “Person” means any individual, firm, corporation, limited liability company, partnership, trust or other entity, and shall include any successor (by merger or otherwise) of such entity, and any governmental authority, agency, department, commission or body.
(h)    “Restricted Business” means the Business, but, for the avoidance of doubt, specifically excluding the remainder of the hospitality industry.  For the avoidance of doubt, the managing, marketing, selling, acquiring, developing of not less than quarterly interests in condo/hotel resorts and the financing of purchases of such interests shall not be a Restricted Business.
(i)    “SJC Key Man Policy” means that certain key man insurance policy on the life of SJC for the benefit of the DRII Parties or their respective Affiliates and SJC’s insurance trust, as amended, supplemented, restated or otherwise modified and in effect at the Effective Time.
(j)    “SJC’s Persona” means SJC’s name, nicknames, likeness, image, signature and voice.  
(k)    “Transaction Documents” means this Agreement, the HMCS Purchase Agreement, the Assignment Agreement and each of the other agreements and instruments to which any of the Parties is (or will be) a party or by which it is (or will be) bound in connection with the Transactions.
13.    Miscellaneous.
(a)    Counterparts; Delivery.  This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which, when taken together, shall be deemed to be one Agreement.  This Agreement and any amendment hereto, to the extent signed and delivered by means of a facsimile machine or via electronic mail of a .pdf or .tif or similar file format, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.  At the request of any Party, each Party shall re-execute original forms thereof and deliver them to all other Parties.  No Party shall raise the use of a facsimile machine or electronic mail of a .pdf or .tif or similar file format to deliver a signature, or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or via electronic mail of a .pdf or .tif or similar file format, as a defense to the formation or enforceability 

15

of this Agreement, and each Party forever waives any such defense.  Each of the Parties acknowledges receipt of a fully-executed copy of this Agreement.
(b)    Governing Law; Jurisdiction; Waiver; Service.  
(i)    Governing Law.  This Agreement shall be governed by and construed in accordance with the Laws of the State of Nevada without reference to the conflicts of Law principles thereof. 
(ii)    JURISDICTION. THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEVADA AND THE UNITED STATES DISTRICT COURT LOCATED IN LAS VEGAS, NEVADA IN ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION MAY AND SHALL BE HEARD AND DETERMINED IN SUCH STATE OR FEDERAL COURT. THE PARTIES HERETO IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING AND ANY RIGHTS THEY MAY HAVE TO TRANSFER OR CHANGE VENUE OF SUCH ACTION OR PROCEEDING.  THE PARTIES FURTHER AGREE, TO THE EXTENT PERMITTED BY LAW, THAT FINAL AND UNAPPEALABLE JUDGMENT AGAINST ANY OF THEM IN ANY ACTION OR PROCEEDING CONTEMPLATED ABOVE SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION WITHIN OR OUTSIDE THE UNITED STATES BY SUIT ON THE JUDGMENT, A CERTIFIED COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND AMOUNT OF SUCH JUDGMENT.
(iii)    Waiver of Immunity.  To the extent that any Party has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, each of the Parties hereby irrevocably waives such immunity in respect of its obligations under this Agreement.
(iv)    Service of Process.  Without limiting any of the foregoing, each Party agrees that service of any process, summons or notice of document in any action suit or proceeding with respect to the subject matter hereof may be served on any Party anywhere in the world.
(c)    MUTUAL WAIVER OF JURY TRIAL.  TO THE EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT 

16

OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 13(C).
(d)    Entire Agreement; Third-Party Beneficiaries.  This Agreement (including agreements and exhibits incorporated herein), together with the other Transaction Documents, contains the entire agreement between the Parties with respect to the subject matter hereof and thereof, and there are no agreements, understandings, representations or warranties between the Parties with respect to the subject matter hereof or thereof other than those set forth or referred to herein or therein.  The Parties agree that prior drafts of this Agreement and the other Transaction Documents will be deemed not to provide any evidence as to the meaning of any provision hereof or the intent of the Parties with respect hereto.  Except with respect to the parties entitled to indemnification set forth in Section 3(b) hereof and for the beneficiaries of the release set forth in Section 7 hereof, this Agreement is not intended to confer upon any Person not a party hereto (and their successors and assigns permitted by Section 13(g)) any rights or remedies hereunder.
(e)    Expenses and Payments.  All legal and other costs and expenses incurred in connection with this Agreement and the Transaction Documents and the Transactions shall be paid by the Party incurring such costs and expenses; provided that DRII shall reimburse the SJC Parties for the reasonable, documented out-of-pocket expenses incurred by the SJC Parties for legal, accounting, tax and advisory services provided to the SJC Parties in connection with this Agreement and the Transaction Documents and the Transactions.  All payments of money to be made pursuant to this Agreement shall be made in U.S. Dollars.
(f)    Notices.  All notices, consents, elections and other communications hereunder shall be sufficiently given for any purpose hereunder only if in writing and delivered personally or sent pre-paid by nationally-recognized overnight delivery service for next business day delivery, to the appropriate address or number set forth on Exhibit B hereto.  Each such notice, consent, election or other communication shall be effective when received by the addressee thereof in the case of personal service, or, if sent by overnight delivery service as described herein, the next business day after deposit with such service.  Notices to each of the Parties shall be addressed as set forth on Exhibit B or at such other address and to the attention of such other Person as any such Party may designate by written notice to the other Parties.
(g)    Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns; provided, however, that no Party shall assign its rights or delegate its obligations under this Agreement without the express prior written consent of each other Party, except that any of the DRII Parties may transfer any of 

17

its rights or obligations hereunder to any of its Affiliates without the consent of any other Party; provided, further, however, that notwithstanding any assignment, such DRII Party shall remain liable for its obligations under this Agreement.
(h)    Amendments and Waivers.  This Agreement may not be modified or amended except by an instrument or instruments in writing signed by all of the Parties. The DRII Parties may waive compliance by the Subject Parties, and the SJC Parties may waive compliance by DRII Parties, with any term or provision of this Agreement on the part of such Parties to be performed or complied with, but only by an instrument in writing signed by the Parties waiving compliance with such term or provision.  
(i)    Further Assurances.  Upon the reasonable request of any Party, each other Party will: (i) execute and deliver to the other Parties such other documents, releases, assignments and other instruments as may be reasonably required to effectuate this Agreement and the other Transaction Documents; and (ii) take all other actions reasonably necessary to fulfill the intent and purpose of this Agreement and the other Transaction Documents and the Transactions.
(j)    Severability.  If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect.  Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.
(k)    Acknowledgement as to Polo Towers.  The Parties hereby acknowledge that Polo Towers is party to this Agreement solely with respect to the assignment of the Polo Towers’ Article 8 Rights to DRC pursuant to the Assignment Agreement, as contemplated hereby, and Polo Towers shall not have any rights or obligations under this Agreement other than with respect to Sections 1(a)(ii), 1(b) and 10 hereof.
(l)    Interpretation.  
(i)    The section and article headings contained in this Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Agreement.
(ii)    When a reference is made to an article, section, exhibit or schedule, such reference shall be to an article, section, exhibit or schedule of this Agreement, unless clearly indicated otherwise.
(iii)    The preamble, recitals and Exhibits contained, identified or referenced in, or attached to, this Agreement are incorporated herein by reference and made a part hereof.
(iv)    Whenever the words “include,” “includes” or “including” are used, they shall be deemed to be followed by the words “without limitation.”

18

(v)    The words “hereof,” “herein” and “herewith” and words of similar import shall be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, unless clearly indicated otherwise.
(vi)    The meaning assigned to each term defined herein shall be equally applicable to both the singular and the plural forms of such term, and words denoting any gender shall include all genders.  Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning.
(vii)    A reference to any Party to this Agreement or any other agreement or document shall include such Party’s successors and permitted assigns.
(viii)    A reference to any legislation or to any provision of any legislation shall include any amendment thereto, modification thereof or re-enactment thereof, and all regulations and statutory instruments issued thereunder or pursuant thereto.
(ix)    The language used in this Agreement will be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction will be applied against any Party.
[Signature page follows.]

19

IN WITNESS WHEREOF, the parties hereto have executed this Master Agreement as of the date first written above.
	
		
	DIAMOND RESORTS INTERNATIONAL, INC.,

	 

	By:
	/s/ Howard S. Lanznar

	Name:
	Howard S. Lanznar

	Title:
	EVP & Chief Administrative Officer

	 
	 

	
		
	DIAMOND RESORTS CORPORATION

	 

	By:
	/s/ Howard S. Lanznar

	Name:
	Howard S. Lanznar

	Title:
	Executive Vice President

	 
	 

	
		
	HOSPITALITY MANAGEMENT AND CONSULTING SERVICE, L.L.C.

	By Cloobeck Companies, LLC, its Manager

	 

	By:
	/s/ Michael Kern

	Name:
	Michael Kern

	Title:
	Manager

	 
	 

	 
	/s/ Stephen J. Cloobeck 

	 
	Stephen J. Cloobeck

	 
	 

	
		
	CLOOBECK COMPANIES, LLC

	 

	By:
	/s/ Michael Kern

	Name:
	Michael Kern

	Title:
	Manager

	 
	 

[Signature Page to Master Agreement]

	
		
	JHJM NEVADA I, LLC

	 

	By:
	/s/ Stephen J. Cloobeck 

	Name:
	Stephen J. Cloobeck

	Title:
	Manager

	 
	 

	
		
	Solely for purposes of Sections 1(a)(ii), 1(b) and 10 of this Master Agreement

	 

	NEVADA RESORT PROPERTIES POLO TOWERS LIMITED PARTNERSHIP

	 
	 

	By:
	C & J Enterprises, LLC

	Its:
	General Partner

	 

	By:
	/s/ Stephen J. Cloobeck 

	Name:
	Stephen J. Cloobeck

	Title:
	Managing Member

 

[Signature Page to Master Agreement]

EXHIBIT A
Dawn Richey
Dale Hinton
Kathy Wheeler

EXHIBIT B

Notices to any of the SJC Parties or Polo Towers shall be addressed to:

c/o Stephen J. Cloobeck
10600 West Charleston Blvd.
Las Vegas, NV 89135

With a copy to:

Glaser Weil Fink Howard Avchen & Shapiro LLP 
10250 Constellation Blvd., 19th Floor
Los Angeles, California 90067
Attn: Patricia L. Glaser
          Jeffrey C. Soza

Notices to either DRII Party or HMCS shall be addressed to:
Diamond Resorts International, Inc.,
Diamond Resorts Corporation, or
Hospitality Management and Consulting Service, L.L.C., as applicable
10600 West Charleston Blvd.
Las Vegas, Nevada 89135
Attn:  Howard S. Lanznar, Executive Vice President & Chief Administrative Officer
           Jared T. Finkelstein, Senior Vice President and General Counsel

with a copy to:
Katten Muchin Rosenman LLP 
525 W. Monroe Street
Chicago, Illinois 60661
Attn: Mark D. WoodExhibit102-HMCSPurchaseAgreement

 
 
 
 
 
 
 
 
MEMBERSHIP INTEREST PURCHASE AGREEMENT 
 
BY AND BETWEEN 
 
DIAMOND RESORTS CORPORATION
AND 
THE HOLDERS OF THE OUTSTANDING MEMBERSHIP INTERESTS OF  
HOSPITALITY MANAGEMENT AND CONSULTING SERVICE, L.L.C. 
 
 
 
 
 
Dated as of January 6, 2015

MEMBERSHIP INTEREST PURCHASE AGREEMENT

THIS MEMBERSHIP INTEREST PURCHASE AGREEMENT (this “Agreement”) is made on January 6, 2015, by and between Diamond Resorts Corporation, a Maryland corporation (“Buyer”), and each of the Persons set forth on Schedule A attached hereto (individually, each a “Member,” and collectively, the “Members”), who constitute all of the members of Hospitality Management and Consulting Service, L.L.C., a Nevada limited liability company (the “Company”).
WHEREAS, the Members are parties to the Operating Agreement (as defined below) and own the respective Units (as defined below) as set forth on Schedule A attached hereto; and 
WHEREAS, each Member desires to sell to Buyer, and Buyer desires to purchase from each Member, their respective Membership Interests (as defined below), on the terms and subject to conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Members and Buyer agree as follows:
ARTICLE I.
DEFINITIONS
Capitalized terms used in this Agreement shall have the meanings set forth below.
“Action” shall mean any action, suit, complaint, litigation hearing, arbitration, inquiry, proceeding or investigation by or before any court, Governmental Authority or arbitral panel (whether at law or in equity, whether civil, criminal, administrative, judicial or investigative).
“Affiliate” or “Affiliates” shall mean, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such first Person.  As used in this definition, “control” (including, with correlative meanings, “controlled by” and “under common control with”) means possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise).
“Agreement” shall have the meaning set forth in the introductory paragraph.
“Articles of Organization” shall mean the Articles of Organization of the Company.
“Business” shall mean the business of providing management and oversight services to and for the benefit of the HOAs, as well as providing certain employees to perform executive management and consulting services directly to Buyer in furtherance of Buyer’s business and operations.  
“Business Day” shall mean any day other than Saturday and Sunday and any other day on which commercial banks located in Nevada are authorized or required by Law to be closed.

“Buyer” shall have the meaning set forth in the introductory paragraph.
“Buyer Parties” shall have the meaning set forth in Section 8.2(a).
“Closing” shall have the meaning set forth in Section 7.1.
“Closing Date” shall have the meaning set forth in Section 7.1.
“Code” shall mean the Internal Revenue Code of 1986, as amended, and any successor thereof.
“Company” shall have the meaning set forth in the introductory paragraph.
“Contract” shall mean any contract, agreement, indenture, note, bond, loan, instrument, lease, conditional sale contract, mortgage, license, franchise, insurance policy, commitment or other arrangement or agreement, whether written or oral.
“Fundamental Representations” shall have the meaning set forth in Section 8.1. 
“Governing Documents” shall mean with respect to any particular entity: (a) if a corporation, the articles or certificate of incorporation and the bylaws of such entity; (b) if a general partnership, the partnership agreement and any statement of partnership; (c) if a limited partnership, the limited partnership agreement and the certificate of limited partnership; (d) if a limited liability company, the articles of organization or certificate of formation and the operating agreement or limited liability company agreement; (e) if a trust, the trust agreement or similar document; (f) if another type of Person, any other charter or similar document adopted or filed in connection with the creation, formation or organization of such Person; (g) all equity holders’ agreements, voting agreements, voting trust agreements, joint venture agreements, registration rights agreements or other agreements or documents relating to the organization, management or operation of any Person or relating to the rights, duties and obligations of the equity holders of any such Person; and (h) any amendment or supplement to any of the foregoing.
“Governmental Authority” shall mean any foreign, federal, state, local or other court, governmental authority, agency, department, commission, board, bureau or regulatory body.
“HOAs” shall mean the trusts, not-for-profit associations and other similar entities formed to represent interests of owners of time share resort intervals relative to such vacation ownership resorts and to which Buyer provides management services. 
“Indemnified Persons” shall mean the Persons entitled to indemnification under Article 8.
“Indemnifying Persons” shall mean the Persons required to provide indemnification under Article 8.
“Knowledge” shall mean, with respect to the Members, the actual knowledge, after reasonable commercial inquiry, of Stephen J. Cloobeck or David F. Palmer.

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“Laws” shall mean all constitutions, laws, statutes, ordinances, rules, rulings, regulations, orders, charges, directives, determinations, executive orders, writs, judgments, injunctions or decrees of any Governmental Authority, including all federal and state consumer financial protection statutes and regulations.
“Liability” shall mean any liability or obligation of any kind, character or description, whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, disputed or undisputed, vested or unvested and whether due or to become due, regardless of when asserted.
“Lien” shall mean any or all security interests, pledges, mortgages, deeds of trusts, liens, charges, licenses, restrictive covenants, options, rights of first refusal, encumbrances, proxies, voting trusts or voting agreements, and any other encumbrances of any kind or nature whatsoever.
“Operating Agreement” shall mean the Operating Agreement of the Company, effective as of December 23, 2010.
“Member” or “Members” shall have the meaning set forth in the introductory paragraph.
“Membership Interests” shall have the meaning set forth in the Operating Agreement.
“Party” or “Parties” shall mean the Members and/or Buyer, as the case may be.
“Person” shall mean any individual, firm, corporation, limited liability company, partnership, trust or other entity, and shall include any successor (by merger or otherwise) of such entity, and any Governmental Authority.
“Proportionate Interest” shall mean a fraction, the numerator of which is the number of Units held by the relevant Member immediately prior to the Closing, and the denominator of which is all of the issued and outstanding Membership Interests immediately prior to the Closing.  For the avoidance of doubt, the sum of all of the Members’ Proportionate Interests shall equal 100%.
“Proportionate Indemnification Share” shall have the meaning set forth in Section 8.2(b).
“Purchase Price” shall mean Ten Thousand Dollars ($10,000.00).
“Subsidiary” shall mean any entity in which the Company, directly or indirectly, owns capital stock or holds an equity or similar interest.
“Tax” or “Taxes” shall mean (a) all taxes, charges, fees, duties, levies or other assessments, including income, gross receipts, net proceeds, ad valorem, real and personal property (tangible and intangible), sales, use, franchise, excise, value added, license, payroll, unemployment, environmental, customs duties, disability, stamp, user, transfer, escheat, fuel, excess profits, windfall profits, severance and employees’ income withholding and Social Security and other payroll taxes imposed by any sovereign state or by any state, municipality, subdivision military base or instrumentality of any sovereign state or by any other tax authority, including all applicable interest, penalties or additions to tax attributable to or imposed by a taxing authority in relation to any taxes 

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and (b) any obligation to pay, assume, indemnify or succeed to the Taxes of any other Person, including as a transferee or successor, by contract or agreement, or otherwise.
“Tax Return” shall mean any report, return, document, declaration, payee statement or other information or filing, filed or required to be filed or provided by the Company to any Tax authority with respect to Taxes or otherwise.
“Units” shall have the meaning set forth in the Operating Agreement.
ARTICLE II.
PURCHASE AND SALE
2.1.    Purchase and Sale of Membership Interests.  At the Closing, upon the terms and subject to the conditions set forth in this Agreement, (a) each Member shall sell, assign and transfer to Buyer, and Buyer shall purchase from such Member, the Units set forth opposite such Member’s name on Schedule A, and all of the Membership Interests related thereto, free and clear of Liens; and (b) Buyer shall pay to each of the Members an amount equal to the product of the Purchase Price, multiplied by such Member’s Proportionate Interest (such payment to be made by check or in such other form as shall be agreed upon by the Parties).  
ARTICLE III.
JOINT REPRESENTATIONS AND WARRANTIES OF THE MEMBERS WITH RESPECT TO THE COMPANY
The Members, jointly and severally, represent and warrant to Buyer as follows:
3.1.    Organization; Business; Capitalization. 
(a)    Organization.  The Company is a limited liability company duly organized and validly existing, and in good standing under the Laws of the State of Nevada.  The Articles of Organization and the Operating Agreement, each in the form provided to Buyer, are in full force and effect, have not been amended or otherwise modified, and are the sole Governing Documents of the Company.
(b)    Business.  To the Members’ Knowledge, neither the Company nor any Person acting on behalf of the Company has engaged directly or indirectly in any material business activities except in furtherance of, or in connection with, the Business.
(c)    Capitalization.  The Units set forth opposite the Members’ names on Schedule A constitute all of the issued and outstanding Units, and the Membership Interests relating to such Units constitute all of the outstanding Membership Interests.  All of the Units have been duly authorized, validly issued and are fully paid and nonassessable and were issued by the Company in compliance with applicable Laws, including all federal, state and other securities Laws and regulations, and were not issued by the Company in violation of any preemptive or similar rights of any Person. There are no: (i) outstanding 

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options, warrants, rights, calls, commitments or demands of any character granted or issued by or binding upon the Company for the issuance, purchase or acquisition of any Units, Membership Interests or equity or debt securities of the Company; (ii) securities convertible into or exchangeable for any Units, Membership Interests or equity or debt securities of the Company; or (iii) capital appreciation rights, phantom equity plans, securities with profit participation rights or features or similar obligations or commitments of the Company. The Members have delivered to Buyer true, accurate and complete copies of all records of equity ownership of the Company, which reflect all issuances, transfers, repurchases and cancellations of the Units.
(d)    Other Rights.  There are no preemptive rights or other similar rights in respect of any of the Units or Membership Interests; (ii) except as imposed by applicable securities Laws, there are no Liens on, or any Contracts relating to, the ownership, transfer or voting of any Units or Membership Interests, or otherwise affecting the rights of any holder of the Units or Membership Interests; and (iii) except for the transactions contemplated hereby, there is no Contract which obligates the Company to purchase, redeem or otherwise acquire, or make any payment (including any dividend or distribution) in respect of, any of the Units or Membership Interests.
3.2.    No Subsidiaries.  The Company does not have, and has never had, any Subsidiaries and does not otherwise own, directly or indirectly, any capital stock or other securities of any Person. The Company is not obligated to provide funds to or make any investment (whether in the form of debt, a capital contribution or other use by any other Person) in any other Person. 
3.3.    No Conflicts.  The execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and will not (with or without notice or the lapse of time or both): (a) violate or conflict with any provision of the Company’s Governing Documents; (b) materially violate any provision of, or be an event that is a material violation of, result in a material breach of or constitute a material default or termination of any material Contract, consent, order or other instrument or obligation or license to which the Company is a party, or by which any of the Company’s assets or properties may be bound; or result in the termination, acceleration or modification of, or entitle any party to terminate, accelerate or modify, or requires notice under, any material Contract; (c) result in the imposition of any Lien on the Business or any of the Company’s assets or properties; or (d) materially violate or conflict with any provision of Law, order, regulation, judgment or ruling of any Governmental Authority.
3.4.    Litigation.  There are no Actions pending or, to the Knowledge of the Members, threatened against the Company.  There are no judgments or outstanding orders, injunctions, writs, decrees, stipulations or awards (whether rendered by a court or Governmental Authority or by arbitration) against the Company or any of the members, managers, officers, employees, or agents of the Company in their capacities as such, or the Business. 
3.5.    Contracts.  Buyer has been provided with copies, or otherwise been made aware, of all Contracts of the Company with any Member or Affiliate of any Member, or any family member thereof, and to the Members’ Knowledge, all other Contracts to which the Company is party or otherwise bound. 

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3.6.    Undisclosed Liabilities.  To the Members’ Knowledge, the Company does not have any material Liabilities, except: (a) Liabilities to Buyer; (b) Liabilities which have arisen in the ordinary course of business; (c) post-Closing Liabilities under Contracts to which the Company is a party or otherwise bound (none of which are the result of any breach of such Contracts or violation of any applicable Laws prior to Closing or any Action); and (d) Liabilities which are not, individually or in the aggregate, material to the Company. 
3.7.    Compliance with Laws.  To the Members’ Knowledge, (a) the Company is in material compliance with all Laws; (b) the Company is not in breach or default with respect to any order, writ, judgment, award, injunction or decree of any Governmental Authority or arbitration applicable to it, the Business or the assets of the Company; and (c) the Company has not received any written notice from any Governmental Authority or any other Person regarding any actual, alleged, or potential violation of, or failure to comply with, any term or requirement of any Law applicable to the Company.
3.8.    Real Property.  The Company does not own, and has never owned, any real property.  
3.9.    Taxes.  The Company is, and as of the Closing will be, treated for U.S. federal, and to the extent applicable, state income tax purposes as a partnership.  To the Members’ Knowledge, the Company has filed (or has had filed on its behalf) all federal income Tax Returns that it was required to file under applicable Laws.  To the Members’ Knowledge, all such Tax Returns were true, correct and complete in all respects and were prepared in substantial compliance with all applicable Laws.
3.10.    Brokers, Finders, Etc.  Neither the Company nor any of the Members has employed or entered into any agreement with, or is subject to, any valid claim of any broker, finder or other intermediary in connection with the transactions contemplated by this Agreement or any other transactions who would be entitled to a fee or commission in connection with such transactions.
3.11.    No Other Agreement to Sell the Membership Interests.  Neither the Company nor any of the Members has any obligation, absolute or contingent, to any Person (other than Buyer) to sell any of the Membership Interests, or to effect any merger, consolidation or other reorganization of the Company, or to enter into any agreement with respect thereto.
ARTICLE IV.
 SEVERAL REPRESENTATIONS AND WARRANTIES OF THE MEMBERS
Each Member, on behalf of itself and not in conjunction with any other Member, hereby represents and warrants to Buyer as follows:
4.1.    Organization. Such Member is duly organized and validly existing under the Laws of the State of its organization.  
4.2.    Authority.  Such Member has the requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby and to perform all of such 

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Member’s obligations under this Agreement.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of such Member. This Agreement has been duly and validly executed and delivered by such Member and constitutes the valid and binding obligations of such Member, enforceable against such Member in accordance with its terms, subject to the effect of bankruptcy, insolvency, reorganization, liquidation, dissolution, moratorium or other similar Laws relating to or affecting the rights of creditors generally and to the effect of the application of general principles of equity (regardless of whether considered in proceedings at Law or in equity).
4.3.    No Conflicts.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby do not and will not (with or without notice or lapse of time or both) (a) violate or conflict with any provision of such Member’s Governing Documents; (b) materially violate any provision of, or result in a material breach or constitute a material default or termination of or result in the acceleration or modification of or entitle any party to accelerate, terminate or modify any obligation under, any lease, agreement, instrument, order, arbitration award, judgment, decree, license or permit to which such Member is a party or by which it is bound; (c) result in the imposition of any Lien or restriction upon any of the Units or Membership Interests; or (d) materially violate or conflict with any provision of Law, order, regulation, judgment or ruling of any Governmental Authority to which such Member is subject.
4.4.    Title to Membership Interests.  Such Member is the sole record owner of, and has title to, the Units set forth opposite such Member’s name on Schedule A, free and clear of all Liens.   Such Member has the full power, unqualified right and authority to vote and sell, transfer and deliver the Units and Membership Interests owned by such Member.  Such Member does not own or have any right to any equity interest in the Company other than the Units and Membership Interests held by such Member.  
4.5.    Brokers, Finders, Etc.  Such Member has not employed or entered into any agreement with, nor is such Member subject to, any valid claim of any broker, finder or other intermediary in connection with the transactions contemplated by this Agreement who would be entitled to a fee or commission in connection with such transactions.
4.6.    No Other Representations or Warranties.  Except as expressly set forth in Article 3 hereof and this Article 4, such Member makes no representation or warranty, express or implied, at Law or in equity, including with respect to merchantability or fitness for any particular purpose, and any such other representations or warranties are hereby expressly disclaimed.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to each of the Members as follows:
5.1.    Organization.  Buyer is a corporation duly incorporated and validly existing under the Laws of the State of Maryland.    

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5.2.    Authority.  Buyer has all requisite corporate power and corporate authority to execute and deliver this Agreement and to perform Buyer’s obligations hereunder and to consummate the transactions contemplated hereby.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of Buyer.  This Agreement has been duly and validly executed and delivered by Buyer and constitutes the valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to the effect of bankruptcy, insolvency, reorganization, liquidation, dissolution, moratorium or other similar Laws relating to or affecting the rights of creditors generally and to the effect of the application of general principles of equity (regardless of whether considered in proceedings at Law or in equity).
5.3.    No Conflicts.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not: (a) violate any provision of Buyer’s Governing Documents; (b) result in a material breach or termination of any Lien, lease, agreement, instrument, order, arbitration award, judgment or decree to which Buyer is a party or by which it is bound; or (c) materially violate or conflict with any provision of Law, order, regulation, judgment or ruling of any Governmental Authority to which Buyer is subject.
5.4.    Brokers, Finders, Etc.  Buyer has not employed or entered into any agreement with, nor is Buyer subject to, any valid claim of any broker, finder or other intermediary in connection with the transactions contemplated by this Agreement who might be entitled to a fee or commission in connection with such transactions.
5.5.    Acquisition of Membership Interests for Investment.  Buyer has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of Buyer’s purchase of the Membership Interests.  Without limiting the representations and warranties set forth in this Agreement or the indemnification obligations set forth in Article 8, Buyer confirms that the Company and the Members have made available to Buyer and its Affiliates and representatives the opportunity to ask questions of the managers, executive officers and senior management employees of the Company.  Buyer agrees that Membership Interests purchased hereunder may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act of 1933, as amended, except pursuant to an exemption from such registration available thereunder, to the extent applicable.  
5.6.    Acknowledgement.  Buyer acknowledges that it has conducted to its satisfaction an independent investigation of the financial condition, operations, assets, liabilities and properties of the Company and the Business.  In making its determination to proceed with the transactions contemplated hereby, Buyer has relied on (a) the results of its own independent investigation and (b) the representations and warranties of the Members expressly and specifically set forth in this Agreement.  SUCH REPRESENTATIONS AND WARRANTIES BY THE MEMBERS CONSTITUTE THE SOLE AND EXCLUSIVE REPRESENTATIONS AND WARRANTIES OF THE MEMBERS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AND BUYER UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT ALL OTHER REPRESENTATIONS AND WARRANTIES OF ANY KIND OR NATURE EXPRESS OR IMPLIED (INCLUDING ANY RELATING TO WARRANTIES OF 

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MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR THE FUTURE OR HISTORICAL FINANCIAL CONDITION, RESULTS OF OPERATIONS, ASSETS OR LIABILITIES OR PROSPECTS OF THE COMPANY) ARE SPECIFICALLY DISCLAIMED BY THE MEMBERS. 
5.7.    No Other Representations or Warranties.  Except as expressly set forth in this Article 5, Buyer makes no representation or warranty, express or implied, at Law or in equity, and any such other representations or warranties are hereby expressly disclaimed.
ARTICLE VI.
OTHER AGREEMENTS
6.1.    Further Assurances.  Upon the reasonable request of any Party, each other Party will: (a) execute and deliver to the other such other documents, releases, assignments and other instruments as may be reasonably required to effectuate this Agreement; and (b) take all other actions reasonably necessary to fulfill the intent and purpose of this Agreement and the transactions contemplated hereby.
6.2.    Taxes. 
(a)    The Members shall (i) cause the Company to timely file all Tax Returns of the Company for all Tax periods ending on or before the Closing Date, (ii) pay all Taxes reflected as due on each such Tax Return, and (iii) provide a copy of such filed Tax Returns to Buyer within five (5) Business Days after filing.
(b)    The Members and Buyer agree that for federal and, to the extent applicable state, income Tax purposes the purchase and sale of 100% of the Membership Interests hereunder shall be treated as a purchase of Company assets by Buyer and a sale of partnership interests by the Members. 
(c)    Buyer shall prepare and deliver to the Members an allocation of the Purchase Price in accordance with Section 1060 of the Code and the Treasury Regulations thereunder among the assets of the Company; and each Party shall file Tax Returns in a manner consistent with such allocation. 
ARTICLE VII.
CLOSING
7.1.    The Closing.  The consummation of the transactions contemplated by this Agreement (the “Closing”) shall occur on January 9, 2015(the “Closing Date”).  The Closing shall be effective for all purposes under this Agreement as of 12:01 a.m. in Las Vegas, Nevada on January 1, 2015 (the “Effective Time”).  The Parties hereto acknowledge and agree that all proceedings at the Closing shall be deemed to have been taken and all documents to be executed and delivered by all Parties at the Closing shall be deemed to have been taken and executed simultaneously.

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7.2.    Members’ Closing Deliveries.  At the Closing, the Members shall deliver the following:
(a)    assignments of membership interests duly and validly executed by each Member and otherwise sufficient to vest in Buyer title to the Membership Interests;
(b)    evidence, reasonably satisfactory to Buyer, of (i) the removal of the then-manager of the Company from such office, and (ii) each of (x) the appointment of Buyer as the successor manager of the Company, and (y) the admission of Buyer as a “Member” for all purposes of the Operating Agreement; 
(c)    an affidavit of non-foreign person status executed by each Member in a form that complies with Section 1445(b)(2) of the Code;
(d)    Certificates of Good Standing or Existence of the Company issued by the Secretary of State of Nevada and of each state or jurisdiction in which the Company is qualified to do business, each dated within 10 days of the Closing;
(e)    all minute books of the Company; and
(f)    such further certificates, instruments and other documents as shall be reasonably requested by Buyer’s counsel.
7.3.    Buyer’s Closing Deliveries.  At the Closing, Buyer shall deliver the following:
(a)    the Purchase Price; and
(b)    such further certificates, instruments, opinions and other documents as shall be reasonably requested by the Members’ counsel.
ARTICLE VIII.
INDEMNIFICATION
8.1.    Survival.  All representations and warranties of the parties contained in Articles 3, 4 and 5 of this Agreement shall terminate and cease to be of further force and effect on the 18 month anniversary of the Closing Date, except that: (a) the representations and warranties contained in Section 3.1 (Organization; Business; Capitalization), Section 3.10 (Brokers, Finders, Etc.), Section 4.1 (Organization), Section 4.2 (Authority), Section 4.4 (Title to Membership Interests) and Section 4.5 (Brokers, Finders, Etc.), Section 5.1 (Organization), Section 5.2 (Authority), Section 5.4 (Brokers, Finders, Etc.), Section 5.5 (Acquisition of Membership Interests for Investment), and Section 5.6 (Acknowledgement) shall survive the Closing and continue indefinitely (collectively, the “Fundamental Representations”); and (b) the representations and warranties contained in Section 3.9 (Taxes) shall survive the Closing until 60 days after the expiration of the applicable statute of limitations.  The covenants and agreements of the Parties contained in this Agreement shall survive indefinitely, subject to any applicable time limitations set forth with respect to such covenants and agreements.  

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8.2.    Indemnification Generally; Etc.
(a)    By the Members Severally (and not jointly) in Favor of Buyer.  Each Member, for itself and only for its own actions related to the following (and not for any other Member), shall indemnify and hold harmless Buyer, the Company and their respective Affiliates and each of their respective members, managers, stockholders, directors, officers, employees, agents, owners and other representatives (collectively, the “Buyer Parties”) from any and all Losses the Buyer Parties may suffer, sustain or incur as a result of or arising out of:
(i)    the inaccuracy or breach of any representation or warranty made by such Member contained in Article 4 of this Agreement; and/or
(ii)    such Member’s breach of its covenants in this Agreement.
For avoidance of doubt, in no event shall any Member have any liability for the breach by another Member of any representation, warranty or covenant.
(b)    By the Members in Favor of Buyer.  The Members shall indemnify and hold harmless the Buyer Parties from any and all Losses the Buyer Parties may suffer, sustain or incur as a result of or arising out of the inaccuracy or breach of any representation or warranty made by the Members contained in Article 3 of this Agreement.
Notwithstanding the foregoing, the Parties acknowledge and agree that, subject to the other limitations set forth in this Article 8, (i) no Member shall have any liability pursuant to this Section 8.2(b) for the inaccuracy or breach of any representation or warranty that is not a Fundamental Representation, except with respect to fraud or intentional breach or misconduct; and (ii) the maximum amount that Buyer can recover from each Member pursuant to Section 8.2(b) shall be limited to such Member’s Proportionate Indemnification Share of the applicable Losses for which Buyer seeks indemnification under Section 8.2(b).  A Member’s “Proportionate Indemnification Share” of any Losses is the amount obtained by multiplying: (x) the sum of such Losses, if any; by (y) such Member’s Proportionate Interest.
(c)    By Buyer in Favor of the Members.  Buyer shall indemnify and hold harmless each Member for any and all Losses such Member or, where applicable, its members, managers, officers, employees, trustees, agents, owners and other representatives may suffer, sustain or incur as a result of or arising out of:
(i)    the inaccuracy or breach of any representation or warranty made by Buyer contained in Article 5 of this Agreement; 
(ii)    (A) any audit by any foreign, federal, state or local taxing authority of any Tax Returns filed by the Company and any amounts required to be paid as a result of such audit, (B) any notice of deficiency or proposed adjustment for any amount of Tax proposed, asserted or assessed by any taxing authority against the Company and any amounts required to be paid in connection therewith, (C) any 

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claim by any foreign, federal, state or local taxing authority that the Company should have filed Tax Returns in such jurisdiction and any Taxes and any amounts required to be paid in connection therewith; 
(iii)    the breach of any agreement or covenant made by the Company contained in this Agreement to be performed or complied with by the Company following the Closing Date; and/or
(iv)    the conduct of the Business and/or any business activities related thereto prior to the Closing Date, including any actions taken in good faith by any Person prior to the Closing Date in furtherance thereof or in connection therewith, except in the case of this clause (iv), to the extent such Losses result from or arise out of the gross negligence, fraud or intentional breach or misconduct of any Member or any of its members, managers, officers, employees, trustees, agents, owners or other representatives or to the extent Buyer is entitled to be indemnified for such Losses pursuant to Section 8.2(a) or Section 8.2(b).
(d)    Exclusive Remedies.  Except for any equitable relief with respect to fraud or intentional breach or misconduct, the indemnification provisions of this Article 8 shall be the sole and exclusive remedy with respect to any and all claims arising out of this Agreement. 
8.3.    Limitation on Damages.  
(a)    Notwithstanding anything to the contrary contained herein, in no event shall any Indemnifying Person hereunder be liable to any Indemnified Person hereunder (including liability to indemnify such Indemnified Person) for incidental, special, punitive, exemplary or consequential damages or for any damages based on a multiple of earnings (other than with respect to items that would have been included as items of income or expense on the Company’s income statement for calendar year 2014), except to the extent a third party recovers such damages from such Indemnified Person in a third party claim and the Indemnified Person has a right to indemnification for its Losses in connection with such third party claim. In no event shall any Losses be recoverable under this Article 8 for any breach, inaccuracy, nonfulfillment or failure to perform under one Section or provision of this Agreement to the extent any Party or Indemnifying Party has already made payment or any Party or Indemnified Party has already received payment in respect of the specific matter giving rise to such Losses under another Section or provision of this Agreement.  
(b)    Other than with respect to fraud or intentional breach or misconduct of any Member or any of its members, managers, officers, employees, trustees, agents, owners or other representatives, in no event shall the Members’ liability under this Article 8 exceed the Purchase Price.
8.4.    Effect of Investigation.  The right to indemnification, payment of Losses of a Buyer Party or for other remedies based on any representation, warranty, covenant or agreement of any Member contained in or made pursuant to this Agreement shall not be affected by any investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) at any time, 

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with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant or agreement. 
ARTICLE IX.
MISCELLANEOUS
9.1.    Counterparts; Delivery.  This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which, when taken together, shall be deemed to be one Agreement.  This Agreement and any amendment hereto, to the extent signed and delivered by means of a facsimile machine or via electronic mail of a .pdf or .tif or similar file format, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.  At the request of any Party, each Party shall re-execute original forms thereof and deliver them to all Parties.  No Party shall raise the use of a facsimile machine or electronic mail of a .pdf or .tif or similar file format to deliver a signature, or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or via electronic mail of a .pdf or .tif or similar file format, as a defense to the formation or enforceability of this Agreement, and each Party forever waives any such defense.  Each of the Parties acknowledges receipt of a fully-executed copy of this Agreement.
9.2.    Governing Law; Jurisdiction; Waiver; Service.  
(a)    Governing Law.  This Agreement shall be governed by and construed in accordance with the Laws of the State of Nevada without reference to the conflicts of Law principles thereof. 
(b)    JURISDICTION.  THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEVADA AND THE UNITED STATES DISTRICT COURT LOCATED IN LAS VEGAS, NEVADA IN ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION MAY AND SHALL BE HEARD AND DETERMINED IN SUCH STATE OR FEDERAL COURT. THE PARTIES HERETO IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING AND ANY RIGHTS THEY MAY HAVE TO TRANSFER OR CHANGE VENUE OF SUCH ACTION OR PROCEEDING.  THE PARTIES FURTHER AGREE, TO THE EXTENT PERMITTED BY LAW, THAT FINAL AND UNAPPEALABLE JUDGMENT AGAINST ANY OF THEM IN ANY ACTION OR PROCEEDING CONTEMPLATED ABOVE SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION WITHIN OR OUTSIDE THE UNITED STATES BY SUIT ON THE JUDGMENT, A CERTIFIED COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND AMOUNT OF SUCH JUDGMENT.

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(c)    Waiver of Immunity.  To the extent that any Party has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, each of the Parties hereby irrevocably waives such immunity in respect of its obligations under this Agreement.
(d)    Service of Process.  Without limiting any of the foregoing, each Party agrees that service of any process, summons or notice of document in any action suit or proceeding with respect to the subject matter hereof may be served on any Party anywhere in the world.
9.3.    MUTUAL WAIVER OF JURY TRIAL.  TO THE EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (a) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (b) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (c) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (d) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.3.
9.4.    Entire Agreement; Third-Party Beneficiaries.  This Agreement (including agreements and exhibits incorporated herein) contains the entire agreement between the Parties with respect to the subject matter hereof, and there are no agreements, understandings, representations or warranties between the Parties with respect to the subject matter hereof other than those set forth or referred to herein.  The Parties agree that prior drafts of this Agreement and other agreements and other instruments entered into in connection with this Agreement relating to the transactions contemplated hereby will be deemed not to provide any evidence as to the meaning of any provision hereof or the intent of the Parties with respect hereto. Except with respect to a Buyer Party, this Agreement is not intended to confer upon any Person not a party hereto (and their successors and assigns permitted by Section 9.7) any rights or remedies hereunder.
9.5.    Expenses and Payments.  All legal and other costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such costs and expenses; provided that Cloobeck Companies, LLC shall be entitled to reimbursement of reasonable, documented out-of-pocket expenses incurred thereby in accordance with the provisions of that certain Master Agreement, dated as of the date of this Agreement, by and among Diamond Resorts International, Inc., Buyer, the Company, Stephen J. Cloobeck, 

14

Cloobeck Companies, LLC, and JHJM Nevada I, LLC.  All payments of money to be made pursuant to this Agreement shall be made in U.S. Dollars.
9.6.    Notices.  All notices, consents, elections and other communications hereunder shall be sufficiently given for any purpose hereunder only if in writing and delivered personally or sent pre-paid by nationally-recognized overnight delivery service for next Business Day delivery, to the appropriate address or number as set forth below.  Each such notice, consent, election or other communication shall be effective when received by the addressee thereof in the case of personal service, or, if sent by overnight delivery service as described herein, the next Business Day after deposit with such service.
Notices to Cloobeck Companies, LLC shall be addressed to:

Cloobeck Companies, LLC
c/o Stephen J. Cloobeck
10600 West Charleston Blvd.
Las Vegas, NV 89135

With a copy to:

Glaser Weil Fink Howard Avchen & Shapiro LLP 
10250 Constellation Blvd., 19th Floor
Los Angeles, California 90067
Attn: Patricia L. Glaser
          Jeffrey C. Soza

or at such other address and to the attention of such other Person as Cloobeck Companies, LLC may designate by written notice to Buyer.  
Notices to Chautauqua Management, LLC shall be addressed to:

Chautauqua Management, LLC
c/o David F. Palmer
10600 West Charleston Blvd.
Las Vegas, NV 89135

or at such other address and to the attention of such other Person as Chautauqua Management, LLC may designate by written notice to Buyer.  
Notices to Buyer shall be addressed to:
Diamond Resorts Corporation
10600 West Charleston Blvd.
Las Vegas, Nevada 89135
Attn:  Howard S. Lanznar, Executive Vice President & Chief Administrative Officer
           Jared T. Finkelstein, Senior Vice President and General Counsel

15

with a copy to:
Katten Muchin Rosenman LLP 
525 W. Monroe Street
Chicago, Illinois 60661
Attn: Mark D. Wood
or at such other address and to the attention of such other Person as Buyer may designate by written notice to each of the Members.
9.7.    Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns; provided, however, that no Party shall assign its rights or delegate its obligations under this Agreement without the express prior written consent of each other Party, except that Buyer may transfer any of its rights or obligations hereunder to any of its Affiliates without the consent of any Party; provided, however, that notwithstanding any assignment, Buyer shall remain liable for its obligations under this Agreement.
9.8.    Amendments and Waivers.  This Agreement may not be modified or amended except by an instrument or instruments in writing signed by Buyer and all of the Members. The Members may waive compliance by Buyer or the Company, and Buyer may waive compliance by the Members, with any term or provision of this Agreement on the part of such Party to be performed or complied with, but only by an instrument in writing signed by the Party waiving compliance with such term or provision.   
9.9.    Further Assurances.  Upon the reasonable request of any Party, each other Party will: (a) execute and deliver to the other Parties such other documents, releases, assignments and other instruments as may be reasonably required to effectuate this Agreement; and (b) take all other actions reasonably necessary to fulfill the intent and purpose of this Agreement and the transactions contemplated herein
9.10.    Severability.  If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect.  Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.
9.11.    Interpretation.  
(a)    The section and article headings contained in this Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Agreement.
(b)    When a reference is made to an article, section, exhibit or schedule, such reference shall be to an article, section, exhibit or schedule of this Agreement, unless clearly indicated otherwise.

16

(c)    The preamble, recitals, Disclosure Schedules and Exhibits contained, identified or referenced in, or attached to, this Agreement are incorporated herein by reference and made a part hereof.
(d)    Whenever the words “include,” “includes” or “including” are used, they shall be deemed to be followed by the words “without limitation.”
(e)    The words “hereof,” “herein” and “herewith” and words of similar import shall be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, unless clearly indicated otherwise.
(f)    The meaning assigned to each term defined herein shall be equally applicable to both the singular and the plural forms of such term, and words denoting any gender shall include all genders.  Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning.
(g)    A reference to any Party to this Agreement or any other agreement or document shall include such Party’s successors and permitted assigns.
(h)    A reference to any legislation or to any provision of any legislation shall include any amendment thereto, modification thereof or re-enactment thereof, and all regulations and statutory instruments issued thereunder or pursuant thereto.
(i)    The language used in this Agreement will be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction will be applied against any Party.
[Signature page follows.]    

17

IN WITNESS WHEREOF, this Membership Interest Purchase Agreement has been signed by or on behalf of each of the parties as of the day first above written under seal.
BUYER:

DIAMOND RESORTS CORPORATION

By:        /s/ Howard S. Lanznar                                
Name:        Howard S. Lanznar                                
Title:           Executive Vice President                      

MEMBERS:

CLOOBECK COMPANIES, LLC

By:        /s/ Michael Kern                                         
Name:        Michael Kern                                         
Title:           Manager                                                

CHAUTAUQUA MANAGEMENT, LLC

		
	By:
	        /s/ David F. Palmer                                     

Name:         David F. Palmer                                     
Title:           Manager                                                

SIGNATURE PAGE TO THE MEMBERSHIP INTEREST PURCHASE AGREEMENT

Schedule A
Members

	
				
	Member
	Total Membership Interests
	Ownership Interest
	

	Cloobeck Companies, LLC
	95,000
	95.0
	%

	Chautauqua Management, LLC
	5,000
	5.0
	%

	Total
	 
	100.00
	%

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