Document:

Registration Rights Agreement dated as of March 29, 2004

 Exhibit 10.16 
  
 REGISTRATION RIGHTS AGREEMENT 
  

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of March 29, 2004 between Sunterra Corporation, a Maryland
corporation (the “Company”), and Merrill Lynch, Pierce, Fenner & Smith Incorporated and CRT Capital Group LLC (the “Initial Purchasers”), pursuant to the Purchase Agreement, dated March 23, 2004 (the “Purchase
Agreement”), between the Company and the Initial Purchasers. In order to induce the Initial Purchasers to enter into the Purchase Agreement, the Company has agreed to provide the registration rights set forth in this Agreement. The execution of
this Agreement is a condition to the closing under the Purchase Agreement. 
  
 The Company agrees with the Initial Purchasers, (i) for their benefit as Initial Purchasers and (ii) for the benefit of the beneficial owners (including the Initial Purchasers) from time to time of the Registrable
Securities (as defined herein) (each of the foregoing a “Holder” and together the “Holders”), as follows: 
  
 SECTION 1. Definitions. Capitalized terms used herein without definition shall have their respective meanings set forth in the Purchase Agreement.
In addition to the terms that are defined elsewhere in this Agreement, the following terms shall have the following meanings: 
  
 “Additional Interest Amount” has the meaning specified in Section 2(e) hereof. 
  
 “Additional Interest Accrual Period” has the meaning specified in Section 2(e) hereof. 
  
 “Additional Interest Payment Date” means each March 29 and
September 29. 
  
 “Affiliate”, with respect to any
specified person, has the meaning specified in Rule 144. 
  
 “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in The City of New York are authorized or obligated by law or executive order to close. 
  
 “Common Stock” means any shares of the common stock, $0.01 par
value, of the Company, and any other shares of common stock as may constitute “Common Stock” for purposes of the Indenture, including the Underlying Common Stock. 
  
 “Company” has the meaning specified in the first paragraph of this Agreement. 
  
 “Conversion Price” has the meaning assigned to such term in the
Indenture. 
  
 “Deferral Notice” has the meaning
specified in Section 3(h) hereof. 
  
 “Deferral Period”
has the meaning specified in Section 3(h) hereof. 
  
 “Effectiveness Deadline Date” has the meaning specified in Section 2(a) hereof. 

 “Effectiveness Period” means the period commencing on the date hereof and ending on the
earliest date on which all Registrable Securities cease to be Registrable Securities. 
  
 “Event” has the meaning specified in Section 2(e) hereof. 
  
 “Event Date” has the meaning specified in Section 2(e) hereof. 
  
 “Event Termination Date” has the meaning specified in Section 2(e) hereof. 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder. 
  
 “Filing Deadline Date” has the meaning specified in Section 2(a) hereof. 
  
 “Holder” has the meaning specified in the second paragraph of this Agreement. 
  
 “Indenture” means the Indenture dated as of the date hereof, as amended from time to time, between the Company and
Wells Fargo Bank, National Association, as trustee, pursuant to which the Notes are being issued. 
  
 “Initial Purchasers” has the meaning specified in the first paragraph of this Agreement. 
  
 “Initial Shelf Registration Statement” has the meaning specified in
Section 2(a) hereof. 
  
 “Issue Date” means March 29,
2004. 
  
 “Material Event” has the meaning specified in
Section 3(h) hereof. 
  
 “Notes” means the 3.75% Senior
Subordinated Convertible Notes due 2024 of the Company to be purchased pursuant to the Purchase Agreement. 
  
 “Notice and Questionnaire” means a written notice delivered to the Company containing substantially the information called for by the Form of
Notice and Questionnaire attached as Annex A to the Offering Memorandum of the Company dated March 23, 2004 relating to the Notes, as such notice may be amended to ensure compliance with applicable law. 
  
 “Notice Holder” means on any date, any Holder that has delivered a
Notice and Questionnaire to the Company on or prior to such date. 
  
 “Prospectus” means the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any amendment or prospectus supplement, including post-effective amendments, and all materials incorporated by reference or explicitly deemed
to be incorporated by reference in such Prospectus. 
  

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 “Purchase Agreement” has the meaning specified in the first paragraph of this Agreement.

  
 “Record Holder” means, with respect to any
Additional Interest Payment Date relating to any Note or shares of Underlying Common Stock as to which any Additional Interest Amount has accrued, the registered holder of such Note or such shares of Underlying Common Stock, as the case may be, on
the March 15 or September 15, as the case may be, immediately prior to the next succeeding Additional Interest Payment Date. 
  
 “Registrable Securities” means the Notes until such Notes have been converted into the Underlying Common Stock and at all times subsequent to
any such conversion, the Underlying Common Stock and any securities into or for which such securities have been converted or exchanged, and any security issued with respect thereto upon any stock dividend, split, merger or similar event until, in
the case of any such security, the earliest of (i) its effective registration under the Securities Act and resale in accordance with the Registration Statement covering it, (ii) expiration of the holding period that would be applicable thereto under
Rule 144(k) assuming it is not held by an Affiliate of the Company, (iii) its sale to the public pursuant to Rule 144, or (iv) the date such security ceases to be outstanding. 
  
 “Registration Expenses” has the meaning specified in Section 5 hereof. 
  
 “Registration Statement” means any registration statement of the
Company that covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits, and all
materials incorporated by reference or explicitly deemed to be incorporated by reference in such registration statement. 
  
 “Restricted Securities” has the meaning assigned to such term in Rule 144. 
  
 “Rule 144” means Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar
or successor rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule. 
  
 “Rule 144A” means Rule 144A under the Securities Act, as such Rule may be amended from time to time, or any similar or successor rule or
regulation hereafter adopted by the SEC having substantially the same effect as such Rule. 
  
 “SEC” means the United States Securities and Exchange Commission and any successor agency. 
  
 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated by the SEC thereunder. 
  
 “Shelf Registration Statement” has the meaning specified in Section
2(a) hereof. 
  
 “Subsequent Shelf Registration
Statement” has the meaning specified in Section 2(b) hereof. 
  

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 “TIA” means the Trust Indenture Act of 1939, as amended. 
  
 “Trustee” means Wells Fargo Bank, National Association (or any
successor entity), the Trustee under the Indenture. 
  
 “Underlying Common Stock” means the shares of Common Stock into which the Notes are convertible or issued upon any such conversion. 
  
 SECTION 2. Shelf Registration. 
  
 (a) The Company shall prepare and file or cause to be prepared and filed with the SEC no later than a date which is ninety (90) days after the Issue Date
(the “Filing Deadline Date”) a Registration Statement for an offering to be made on a delayed or continuous basis pursuant to Rule 415 of the Securities Act (a “Shelf Registration Statement”) registering the resale from time to
time by Holders of all of the Registrable Securities (the “Initial Shelf Registration Statement”). The Initial Shelf Registration Statement shall be on Form S-3 or another appropriate form permitting registration of such Registrable
Securities for resale by such Holders in accordance with the methods of distribution reasonably elected by the Holders and set forth in the Initial Shelf Registration Statement and shall comply in all material respects with the requirements of Form
S-3 or other appropriate form and the requirements of Regulations S-T under the Securities Act. The Company shall use its reasonable best efforts to cause the Initial Shelf Registration Statement to be declared effective under the Securities Act no
later than the date (the “Effectiveness Deadline Date”) that is one-hundred and eighty (180) days after the Issue Date, and to keep, subject to Section 3(h) hereof, the Initial Shelf Registration Statement (or any Subsequent Shelf
Registration Statement) continuously effective under the Securities Act until the expiration of the Effectiveness Period. Each Holder that becomes a Notice Holder on or prior to the date ten (10) Business Days prior to the time that the Initial
Shelf Registration Statement becomes effective shall be named as a selling securityholder in the Initial Shelf Registration Statement and the related Prospectus in such a manner as to permit such Holder to deliver such Prospectus to purchasers of
Registrable Securities in accordance with applicable law (other than laws not generally applicable to all such Holders). No Holder that is not a Notice Holder shall be entitled to be named as a selling securityholder, or have the Registrable
Securities held by it covered, in a Shelf Registration Statement. 
  
 (b) If the Initial Shelf Registration Statement or any Subsequent Shelf Registration Statement ceases to be effective for any reason at any time during the Effectiveness Period (other than because all Registrable Securities registered
thereunder shall have been resold pursuant thereto or shall have otherwise ceased to be Registrable Securities and other than during a Deferral Period), the Company shall use its reasonable best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof, including, if reasonably necessary, by amending the Shelf Registration Statement in a manner reasonably expected by the Company to obtain the withdrawal of the order suspending the effectiveness thereof, or file
an additional Shelf Registration Statement covering all of the securities that as of the date of such filing are Registrable Securities (a “Subsequent Shelf Registration Statement”). If a Subsequent Shelf Registration Statement is filed,
the Company shall use its reasonable best efforts to cause the Subsequent Shelf Registration Statement to become effective as promptly as is reasonably practicable after such filing or, if filed during a Deferral Period, after the expiration of such

  

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Deferral Period, and to keep such Registration Statement (or subsequent Shelf Registration Statement), subject to Section 3(h) hereof, continuously effective
until the end of the Effectiveness Period. 
  
 (c) The Company
shall supplement and amend the Shelf Registration Statement if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement, if required by the Securities Act or as
necessary to name a Notice Holder as a selling securityholder pursuant to Section 2(d) below. 
  
 (d) Each Holder of Registrable Securities agrees that if such Holder wishes to sell Registrable Securities pursuant to a Shelf Registration Statement and related Prospectus, it will do so only in accordance with this
Section 2(d) and Section 3(h) and Section 4. Each Holder of Registrable Securities wishing to sell Registrable Securities pursuant to an effective Shelf Registration Statement and related Prospectus agrees to deliver a Notice and Questionnaire to
the Company at least ten (10) Business Days prior to any intended distribution of Registrable Securities under the Shelf Registration Statement and to notify the Company in writing of such proposed sale within two (2) business days prior to such
proposed sale. Each Holder of Registrable Securities who elects to sell Registrable Securities pursuant to a Shelf Registration Statement agrees by submitting a Notice and Questionnaire to the Company that it will be bound by the terms and
conditions of the Notice and Questionnaire and this Agreement. From and after the date the Initial Shelf Registration Statement is declared effective, the Company shall, as promptly as is reasonably practicable after the date a fully completed
Notice and Questionnaire is received by the Company, (i) if required by applicable law, file with the SEC a post-effective amendment to the Shelf Registration Statement or prepare and, if required by applicable law, file a supplement to the related
Prospectus or a supplement or amendment to any document incorporated therein by reference or file any other document required by the SEC so that the Holder delivering such Notice and Questionnaire is named as a selling securityholder in the Shelf
Registration Statement and the related Prospectus in such a manner as to permit such Holder to deliver such Prospectus to purchasers of the Registrable Securities in accordance with applicable law and, if the Company shall file a post-effective
amendment to the Shelf Registration Statement, use its reasonable best efforts to cause such post-effective amendment to be declared effective under the Securities Act as promptly as is reasonably practicable, (ii) provide such Holder copies of any
documents filed pursuant to Section 2(d)(i) and (iii) notify such Holder as promptly as is reasonably practicable after the effectiveness under the Securities Act of any post-effective amendment filed pursuant to Section 2(d)(i); provided that if
such Notice and Questionnaire is delivered during a Deferral Period, the Company shall so inform the Holder delivering such Notice and Questionnaire and shall take the actions set forth in clauses (i), (ii) and (iii) above upon expiration of the
Deferral Period in accordance with Section 3(h); provided further that the Company shall not be required to file more than one post-effective amendment to the Shelf Registration Statement during any 90 day period. Notwithstanding anything contained
herein to the contrary, the Company shall be under no obligation to name any Holder that is not a Notice Holder as a selling securityholder in any Registration Statement or related Prospectus. 
  
 (e) The parties hereto agree that the Holders of Registrable Securities will
suffer damages, and that it would not be feasible to ascertain the extent of such damages with precision, if, other than as permitted hereunder (i) the Initial Shelf Registration Statement has not been filed on or prior to the Filing Deadline Date,
(ii) the Initial Shelf Registration Statement has 

  

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not been declared effective under the Securities Act on or prior to the Effectiveness Deadline Date, or (iii) the aggregate duration of Deferral Periods in
any period exceeds the number of days permitted in respect of such period pursuant to Section 3(h) hereof (each of the events of a type described in any of the foregoing clauses (i) through (iii) is individually referred to herein as an
“Event,” and the Filing Deadline Date in the case of clause (i), the Effectiveness Deadline Date in the case of clause (ii), and the date on which the aggregate duration of Deferral Periods in any period exceeds the number of days
permitted by Section 3(h) hereof in the case of clause (iii), being referred to herein as an “Event Date”). Events shall be deemed to continue until the “Event Termination Date,” which shall be the following dates with respect to
the respective types of Events: the date the Initial Shelf Registration Statement is filed in the case of an Event of the type described in clause (i), the date the Initial Shelf Registration Statement is declared effective under the Securities Act
in the case of an Event of the type described in clause (ii), and termination of the Deferral Period that caused the limit on the aggregate duration of Deferral Periods in a period set forth in Section 3(h) to be exceeded in the case of the
commencement of an Event of the type described in clause (iii). 
  
 Accordingly, commencing on (and including) any Event Date and ending on (but excluding) the respective Event Termination Date (a “Additional Interest Accrual Period”), the Company agrees to pay, as liquidated damages and not as a
penalty, an amount (the “Additional Interest Amount”), payable on the Additional Interest Payment Dates to Record Holders of then outstanding Notes that are Registrable Securities or of then outstanding shares of Underlying Common Stock
issued upon conversion of Notes that are Registrable Securities, as the case may be, accruing, for each portion of such Additional Interest Accrual Period beginning on and including a Additional Interest Payment Date (or, in respect of the first
time that the Liquidation Damages Amount is to be paid to Holders on a Additional Interest Payment Date as a result of the occurrence of any particular Event, from the Event Date) and ending on but excluding the first to occur of (A) the date of the
end of the Additional Interest Accrual Period or (B) the next Additional Interest Payment Date, at a rate per annum equal to one quarter of one percent (0.25%) for the first ninety (90) day period from the Event Date, and thereafter at a rate per
annum equal to one half of one percent (0.50%) of the aggregate principal amount of such Notes or the aggregate Conversion Price of the shares of Underlying Common Stock (determined as of the Business Day immediately preceding the next Additional
Interest Payment Date), as the case may be; provided, that in the case of an Additional Interest Accrual Period that is in effect solely as a result of an Event of the type described in clause (iii) of the preceding paragraph, such Additional
Interest Amount shall be paid only to the Notice Holders; and provided further, that any Additional Interest Amount accrued with respect to any Note or portion thereof called for redemption on a redemption date prior to the Additional Interest
Payment Date shall, in any such event, be paid instead to the Holder who submitted such Note or portion thereof for redemption on the applicable redemption date, on such date. Notwithstanding the foregoing, no Additional Interest Amounts shall
accrue as to any Registrable Security from and after the earlier of (x) the date such security is no longer a Registrable Security and (y) expiration of the Effectiveness Period. In addition, No Additional Interest Amounts shall be paid with respect
to Notes that have been surrendered for conversion or converted into Underlying Common Stock on a conversion date prior to the Additional Interest Payment Date. The rate of accrual of the Additional Interest Amount with respect to any period shall
not exceed the rate provided for in this paragraph notwithstanding the occurrence of multiple concurrent Events. Following the cure of all Events requiring the payment by the Company of Additional Interest Amounts to the Holders of 

  

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Registrable Securities pursuant to this Section, the accrual of Additional Interest Amounts will cease (without in any way limiting the effect of any
subsequent Event requiring the payment of the Additional Interest Amount by the Company). 
  
 The Trustee, subject to the applicable provisions of the Indenture, shall be entitled, but shall not be obligated, on behalf of Holders of Notes or Underlying Common Stock, to seek any available remedy for the
enforcement of this Agreement, including for the payment of any Additional Interest Amount. Notwithstanding the foregoing, the parties agree that the sole monetary damages payable for a violation of the terms of this Agreement with respect to which
liquidated damages are expressly provided shall be such Additional Interest Amount. Nothing shall preclude a Notice Holder or Holder of Registrable Securities from pursuing or obtaining specific performance or other equitable relief with respect to
this Agreement. 
  
 All of the Company’s obligations set
forth in this Section 2(e) that are outstanding with respect to any Registrable Security at the time such security ceases to be a Registrable Security shall survive until such time as all such obligations with respect to such security have been
satisfied in full (notwithstanding termination of this Agreement pursuant to Section 8(m)). 
  
 The parties hereto agree that the liquidated damages provided for in this Section 2(e) constitute a reasonable estimate of the damages that may be incurred by Holders of Registrable Securities by reason of the failure
of the Shelf Registration Statement to be filed or declared effective or available for effecting resales of Registrable Securities in accordance with the provisions hereof. 
  
 SECTION 3. Registration Procedures. In connection with the registration obligations of the Company under Section 2
hereof, during the Effectiveness Period the Company shall: 
  
 (a)
Before filing any Registration Statement or Prospectus or any amendments or supplements (other than supplements that do nothing more substantive than name one or more Notice Holders as selling securityholders) thereto with the SEC, furnish to the
Initial Purchasers copies of all such documents proposed to be filed at least three (3) Business Days prior to such filing. 
  
 (b) Subject to Section 3(h), prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement continuously effective for the Effectiveness Period; cause the related Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any
similar provision then in force) under the Securities Act; and use its reasonable efforts to comply with the provisions of the Securities Act, the Exchange Act and the rules and regulations thereunder applicable to it with respect to the disposition
of all securities covered by such Registration Statement during the Effectiveness Period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement as so amended or such Prospectus as so
supplemented. 
  
 (c) As promptly as reasonably practicable give
notice to the Notice Holders and the Initial Purchasers (i) at least three business days prior to filing, when any Prospectus, 

  

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Prospectus Supplement, Registration Statement (other than the Initial Registration Statement) or post-effective amendment to a Registration Statement will be
filed with the SEC, provided, however, that the Company shall not be required by this clause (i) to notify (A) the Initial Purchasers of the filing of a Prospectus supplement that does nothing more substantive than name one or more Notice Holders as
selling security holders or (B) any Notice Holder of the filing of a Prospectus supplement that does nothing more substantive than name one or more other Notice Holders as selling securityholders, (ii) with respect to a Registration Statement or any
post-effective amendment when the same has been declared effective, (iii) of any request, following the effectiveness of the Initial Shelf Registration Statement under the Securities Act, by the SEC or any other federal or state governmental
authority for amendments or supplements to any Registration Statement or related Prospectus or for additional information, (iv) of the issuance by the SEC or any other federal or state governmental authority of any stop order or injunction
suspending or enjoining the use of any Prospectus or the effectiveness of any Registration Statement or the initiation or threatening of any proceedings for that purpose, (v) if, between the effective date of a Registration Statement and the closing
of any sale of Registrable Securities covered thereby, the representations and warranties of the Company contained in any underwriting agreement, securities sales agreement or other similar agreement, if any, relating to the offering cease to be
true and correct in all material respects, (vi) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, (vii) of the occurrence of (but not the nature of or details concerning) a Material Event; provided, that no notice by the Company shall be required pursuant to this clause (vii)
if the event that the Company either promptly files a supplement to update the Prospectus or a Form 8-K or other appropriate Exchange Act report that is incorporated by reference into the Registration Statement, which in any such case, contains the
requisite information with respect to such Material Event that results in such Registration Statement no longer containing any untrue statement of a material fact or omitting to state a material fact necessary to make the statement contained therein
not misleading) and (viii) of the determination by the Company that a post-effective amendment to a Registration Statement will be filed with the SEC, which notice may, at the discretion of the Company (or as required pursuant to Section 3(h)),
state that it constitutes a Deferral Notice, in which event the provisions of Section 3(h) shall apply. 
  
 (d) Use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction in which they have been qualified for sale, in either case as promptly as reasonably practicable or, if any such
order or suspension is made effective during any Deferral Period, as promptly as reasonably practicable after the expiration of such Deferral Period. 
  
 (e) As promptly as reasonably practicable after the filing of such documents with the SEC, furnish to each Notice Holder and the Initial Purchasers, upon
their request and without charge, at least one (1) conformed copy of the Registration Statement and any amendment thereto, including financial statements, but excluding schedules, all documents incorporated or deemed to be incorporated therein by
reference and all exhibits if such schedules, documents and exhibits are available via the SEC’s EDGAR system. 
  

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 (f) During the Effectiveness Period (except during such periods that a Deferral Notice is outstanding and
has not been revoked), deliver to each Notice Holder in connection with any sale of Registrable Securities pursuant to a Registration Statement, without charge, as many copies of the Prospectus or Prospectuses relating to such Registrable Securities
and any amendment or supplement thereto and such other documents as such Notice Holder may reasonably request, including financial statements and schedules and, if such Notice Holder so requests, all exhibits in order to facilitate the public sale
or other disposition of the Registrable Securities; and the Company hereby consents (except during such periods that a Deferral Notice is outstanding and has not been revoked) to the use of such Prospectus or each amendment or supplement thereto by
each Notice Holder in connection with any offering and sale of the Registrable Securities covered by such Prospectus or any amendment or supplement thereto in the manner set forth therein. 
  
 (g) Subject to Section 3(h), prior to any public offering of the Registrable
Securities pursuant to the Shelf Registration Statement, use reasonable efforts to register or qualify or cooperate with the Notice Holders in connection with the registration or qualification (or exemption therefrom) of such Registrable Securities
for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Notice Holder reasonably requests in writing (which request may be included in the Notice and Questionnaire), it being agreed that no such
registration or qualification will be made unless so requested; prior to any public offering of the Registrable Securities pursuant to the Shelf Registration Statement, use reasonable efforts to keep each such registration or qualification (or
exemption therefrom) effective during the Effectiveness Period in connection with such Notice Holder’s offer and sale of Registrable Securities pursuant to such registration or qualification (or exemption therefrom) and do any and all other
acts or things reasonably necessary to enable the disposition in such jurisdictions of such Registrable Securities in the manner set forth in the relevant Registration Statement and the related Prospectus; provided that the Company will not be
required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it is not otherwise qualified, or (ii) take any action that would subject it to general service of process in suits or to taxation in any such
jurisdiction where it is not then so subject. 
  
 (h) Upon (A) the
issuance by the SEC of a stop order suspending the effectiveness of the Shelf Registration Statement or the initiation of proceedings with respect to the Shelf Registration Statement under Section 8(d) or 8(e) of the Securities Act, (B) the
occurrence of any event or the existence of any fact (a “Material Event”) as a result of which any Registration Statement shall contain any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, or any Prospectus shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, or (C) the occurrence or existence of any development, event, fact, situation or circumstance relating to the Company that, in the discretion of the Company, makes it
appropriate to suspend the availability of the Shelf Registration Statement and the related Prospectus, (i) in the case of clause (B) above, subject to the next sentence, as promptly as practicable prepare and file a post-effective amendment to such
Registration Statement or a supplement to the related Prospectus or any document incorporated therein by reference or file any other required document that would be incorporated by reference into such Registration Statement and Prospectus so that
such 

  

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Registration Statement does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, and such Prospectus does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder, and, in the case of a post-effective amendment to a Registration Statement, subject to the
next sentence, use its reasonable best efforts to cause it to be declared effective as promptly as is reasonably practicable, and (ii) give notice to the Notice Holders as promptly as is reasonably practicable that the availability of the Shelf
Registration Statement is suspended (a “Deferral Notice”) and, upon receipt of any Deferral Notice, each Notice Holder agrees not to sell any Registrable Securities pursuant to the Registration Statement until such Notice Holder’s
receipt of copies of the supplemented or amended Prospectus provided for in clause (i) above, or until it is advised in writing by the Company that the Prospectus may be used, and has received copies of any additional or supplemental filings that
are incorporated or deemed incorporated by reference in such Prospectus. The Company will use its reasonable best efforts to ensure that the use of the Prospectus may be resumed (x) in the case of clause (A) above, as promptly as is reasonably
practicable, (y) in the case of clause (B) above, as soon as, in the reasonable judgment of the Company, public disclosure of such Material Event would not be prejudicial to or contrary to the interests of the Company or, if necessary to avoid
unreasonable burden or expense, as soon as reasonably practicable thereafter and (z) in the case of clause (C) above, as soon as, in the discretion of the Company, such suspension is no longer appropriate. So long as the period during which the
availability of the Registration Statement and any Prospectus is suspended (the “Deferral Period”) does not exceed sixty (60) days during any three (3) month period or one hundred twenty (120) days during any twelve (12) month period, the
Company shall not incur any obligation to pay liquidated damages pursuant to Section 2(e). 
  
 (i) If reasonably requested in writing in connection with a disposition of Registrable Securities in an amount of at least $10,000,000 pursuant to a Registration Statement, make reasonably available for inspection
during normal business hours by a representative for the Notice Holders of such Registrable Securities and any broker-dealers, attorneys and accountants retained by such Notice Holders, all relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries, and cause the appropriate executive officers, directors and designated employees of the Company and its subsidiaries to make reasonably available for inspection during normal business
hours on reasonable notice all relevant information reasonably requested by such representative for the Notice Holders or any such broker-dealers, attorneys or accountants in connection with such disposition, in each case as is customary and
reasonably necessary for similar “due diligence” examinations; provided, however, that such persons shall first agree in writing with the Company that any information that is reasonably designated by the Company in writing as confidential
at the time of delivery of such information shall be kept confidential by such persons and shall be used solely for the purposes of exercising rights under this Agreement, unless (i) disclosure of such information is required by court or
administrative order or is necessary to respond to inquiries of regulatory authorities; provided, however, that such persons shall as soon as reasonably practicable provide written notice to the Company of any request by any such court or regulatory
authority for any such confidential information of the Company in order to allow the Company a reasonable amount of time to seek an appropriate protective order to prevent the 

  

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disclosure of such information, (ii) disclosure of such information is required by law (including any disclosure requirements pursuant to federal securities
laws in connection with the filing of any Registration Statement or the use of any Prospectus referred to in this Agreement), (iii) such information becomes generally available to the public other than as a result of a disclosure or failure to
safeguard by any such person or (iv) such information becomes available to any such person from a source other than the Company and such source is not bound by a confidentiality agreement or other obligation of confidentiality; and provided further
that the foregoing inspection and information gathering shall, to the greatest extent possible, be coordinated on behalf of all the Notice Holders and the other parties entitled thereto by the counsel referred to in Section 5. 
  
 (j) Comply in all material respects with all applicable rules and regulations
of the SEC and make generally available to its securityholders earning statements (which need not be audited) satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than the time period prescribed by the SEC for filing a Form 10-Q after the end of any 12-month period (or the time period prescribed by the SEC for filing a Form 10-K after the end of any 12-month period if such period is a
fiscal year) commencing on the first day of the first fiscal quarter of the Company commencing after the effective date of a Registration Statement, which statements shall cover said 12-month periods. 
  
 (k) Unless the Registrable Securities are in book-entry form, reasonably
cooperate with each Notice Holder to facilitate the timely preparation and delivery of certificates representing Registrable Securities sold pursuant to a Registration Statement and not bearing any restrictive legends (unless required by applicable
law), and cause such Registrable Securities to be in such denominations as are permitted by the Indenture and registered in such names as such Notice Holder may request in writing at least five (5) Business Days prior to any sale of such Registrable
Securities. 
  
 (l) Provide a CUSIP number for all Registrable
Securities covered by each Registration Statement not later than the effective date of such Registration Statement and provide the Trustee for the Notes and the transfer agent for the Common Stock with certificates for the Registrable Securities
that are in a form eligible for deposit with The Depository Trust Company. 
  
 (m) Reasonably cooperate and assist in any filings required to be made with the NASD and in the performance of any due diligence investigation by any underwriter and its counsel (including any “qualified
independent underwriter” that is required to be retained in accordance with the rules and regulations of the NASD) required in connection therewith. 
  
 (n) Upon (i) the filing of the Initial Shelf Registration Statement and (ii) the effectiveness of the Initial Shelf Registration Statement, announce the
same, in each case by release to Businesswire, Reuters Economic Services, Bloomberg Business News or any other means of dissemination reasonably expected to make such information known publicly. 
  
 (o) Take all actions necessary, and reasonably requested by the Holders of a
majority of the Registrable Securities being sold, to dispose of such Registrable Securities. 
  

 11 

 (p) Cause the Indenture to be qualified under the TIA not later than the effective date of any
Registration Statement; and in connection therewith, cooperate with the Trustee to effect such changes to the Indenture as may be required for the Indenture to be so qualified in accordance with the terms of the TIA and execute, and use its
reasonable best efforts to cause the Trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner.

  
 SECTION 4. Holder’s Obligations. Each Holder
agrees, by acquisition of the Registrable Securities, that no Holder of Registrable Securities shall be entitled to sell any of such Registrable Securities pursuant to a Registration Statement or to receive a Prospectus relating thereto, unless such
Holder has furnished the Company with a Notice and Questionnaire as required pursuant to Section 2(d) hereof (including the information required to be included in such Notice and Questionnaire) and the information set forth in the next sentence and
such Holder provides written notice of a proposed sale to the Company at least two (2) business days prior to such sale. Each Notice Holder agrees promptly to furnish to the Company in writing all information required to be disclosed in order to
make the information previously furnished to the Company by such Notice Holder not misleading, any other information regarding such Notice Holder and the distribution of such Registrable Securities as may be required to be disclosed in the
Registration Statement under applicable law or pursuant to SEC comments and any information otherwise requested by the Company. Any sale of any Registrable Securities by a Holder shall constitute a representation and warranty by such Holder that the
information relating to such Holder and its plan of distribution is as set forth in the Prospectus delivered by such Holder in connection with such disposition, that such Prospectus does not as of the time of such sale contain any untrue statement
of a material fact provided by or relating to such Holder or its plan of distribution and that such Prospectus does not as of the time of such sale omit to state any material fact provided by or relating to such Holder or its plan of distribution
necessary to make the statement in the Prospectus, in light of the circumstances under which they were made, not misleading. Each Holder further agrees, following termination of the Effectiveness Period, to notify the Company, within five (5)
Business Days of a request, of the amount of Registrable Securities sold pursuant to the Registration Statement and, in the absence of a response, the Company may assume that all of the Holder’s Registrable Securities were so sold. 

 
 SECTION 5. Registration Expenses. The Company shall bear all fees
and expenses incurred in connection with the performance by the Company of its obligations under Sections 2 and 3 of this Agreement whether or not any of the Registration Statements are declared effective. Such fees and expenses shall include,
without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (x) with respect to filings required to be made with the National Association of Securities Dealers, Inc. and (y) of compliance with federal
and state securities or Blue Sky laws to the extent such filings or compliance are required pursuant to this Agreement, (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities in a form
eligible for deposit with The Depository Trust Company), (iii) duplication expenses relating to copies of any Registration Statement or Prospectus delivered to any Holders hereunder, (iv) fees and disbursements of counsel for the Company in
connection with the Shelf Registration Statement, and (v) reasonable fees and disbursements of the Trustee and its counsel and of the registrar and transfer agent for the Common Stock. In addition, the Company shall pay the internal expenses 

  

 12 

 
of the Company (including, without limitation, all salaries and expenses of officers and employees performing legal or accounting duties), the expense of any
annual audit, the fees and expenses incurred in connection with the listing, if any, by the Company of the Registrable Securities on any securities exchange on which the same securities of the Company are then listed and the fees and expenses of any
person, including special experts, retained by the Company. Notwithstanding the provisions of this Section 5, each seller of Registrable Securities shall pay all selling expenses, commissions, discounts and expenses of counsel except to the extent
set forth in this Section 5, and all registration expenses to the extent required by applicable law. 
  
 SECTION 6. Indemnification; Contribution. 
  
 (a) The Company agrees to indemnify and hold harmless the Initial Purchasers and each Holder of Registrable Securities and each person, if any, who
controls the Initial Purchasers or any holder of Registrable Securities within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, as follows: 
  
 (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of
any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which they were made, not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading; 
  
 (ii) against
any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, provided that (subject to Section 6(d) below) any such settlement is effected with the prior written consent
of the Company; and 
  
 (iii) against any and all
expense whatsoever, as incurred (including the fees and disbursements of counsel), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above; 
  
 provided, however, that this indemnity agreement shall not apply to any loss, liability,
claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information, including, without limitation, the Notice and
Questionnaire furnished to the Company by or on 

  

 13 

 
behalf of the Initial Purchasers or such Holder of Registrable Securities expressly for use in the Registration Statement (or any amendment thereto), or any
preliminary prospectus or the Prospectus (or any amendment or supplement thereto); provided, further, that the indemnification contained in this paragraph shall not inure to the benefit of any indemnified party on account of any such losses,
liabilities, claims, damages or expenses caused by any untrue statement or alleged untrue statement or omission or alleged omission made in any preliminary Prospectus provided in each case the Company has performed its obligations under Section 3(e)
hereof if either (A)(i) such indemnified party failed to send or deliver a copy of the Prospectus with or prior to the delivery of written confirmation of the sale by such indemnified party to the person asserting the claim from which such losses,
liabilities, claims, damages or expenses arise and (ii) the Prospectus would have corrected such untrue statement or alleged untrue statement or such omission or alleged omission, or (B)(x) such untrue statement or alleged untrue statement, omission
or alleged omission is corrected in an amendment or supplement to the Prospectus and (y) having previously been furnished by or on behalf of the Company with copies of the Prospectus as so amended or supplemented, such indemnified party thereafter
failed to deliver such Prospectus as so amended or supplemented with or prior to the delivery of written confirmation of the sale of a Registrable Security to the person asserting the claim from which such losses, liabilities, claims, damages or
expenses arise. 
  
 (b) In connection with any Shelf Registration
Statement in which a Holder of Registrable Securities, including, without limitation, the Initial Purchasers, is participating and is furnishing information relating to such Holder of Registrable Securities to the Company in writing expressly for
use in such Registration Statement, any preliminary prospectus, the Prospectus or any amendments or supplements thereto, the Holders of such Registrable Securities agree, severally and not jointly, to indemnify and hold harmless the Company, the
Initial Purchasers and the other selling Holders and each person, if any, who controls the Company, the Initial Purchasers and the other selling Holders within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act,
against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to (A) untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by
or on behalf of such Holder of Registrable Securities, or (B) a failure to deliver the Prospectus as described in clause (A) or (B) of Section 6(a) hereof, provided the Company has provided such Prospectus to the Holder in accordance with this
Agreement or any person, if any, who controls any such Holder of Registrable Securities, expressly for use in the Registration Statement (or any amendment thereto) or such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto). 
  
 The Initial Purchasers agree to indemnify and hold
harmless the Company, the Holders of Registrable Securities, and each person, if any, who controls the Company or any Holder of Registrable Securities within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act
against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto) or any preliminary prospectus or the 

  

 14 

 
Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by or on behalf of
the Initial Purchasers expressly for use in the Registration Statement (or any amendment thereto) or such preliminary prospectus or the Prospectus (or any amendment or supplement thereto). 
  
 (c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action or proceeding commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any
liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of these indemnity provisions. The indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the reasonable fees and
disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain a separate firm as its own counsel, but the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in
respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one firm (in addition to any local counsel) for all
such indemnified parties, and that all such reasonable fees and expenses shall be reimbursed as they are incurred. In the event a separate firm is retained for the Holders of Registrable Securities, and control persons of the Holders of Registrable
Securities, such firm shall be designated in writing by the Holders of a majority (with Holders of Notes deemed to be the Holders, for purposes of determining such majority, of the number of shares of Underlying Common Stock into which such Notes
are or would be convertible as of the date on which such designation is made) of the Registrable Securities covered by the Registration Statement held by Holders that are indemnified parties pursuant to Section 6(b). In the event a separate firm is
retained for the Company, and such directors, officers and control persons of the Company, such firm shall be designated in writing by the Company. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent includes an unconditional release of each indemnified party subject
thereto from all liability arising out of such litigation, investigation, proceeding or claim. 
  
 (d) If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel contemplated in this Section 6, such indemnifying party agrees
that it shall be liable for any settlement of the nature contemplated by Section 6(a)(ii) effected without its written consent if (i) such settlement is entered into more than 60 days after receipt by such indemnifying party of aforesaid request,
(ii) 

  

 15 

 
such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii)
such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement; provided, that an indemnifying party shall not be liable for any such settlement effected without its
consent if such indemnifying party, prior to the date of such settlement, (1) reimburses such indemnified party in accordance with such request for the amount of such fees and expenses of counsel as the indemnifying party believes in good faith to
be reasonable, and (2) provides written notice to the indemnified party that the indemnifying party disputes in good faith the reasonableness of the unpaid balance of such fees and expenses. 
  
 (e) If and to the extent that the indemnification to which an indemnified
party is entitled under this Section 6 is for any reason unavailable to or insufficient although applicable in accordance with its terms to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by and paid or payable to such indemnified party, as incurred, in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and of the Holders participating in the offering pursuant to the Shelf Registration Statement and the Initial Purchasers on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. 
  
 The relative fault of the Company on the one hand and the Holders participating in the offering pursuant to the Shelf Registration Statement and the
Initial Purchasers on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information
supplied by the Company or by such Holders or the Initial Purchasers and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. 
  
 Each of the Company, the Initial Purchasers and the Holders agree that it
would not be just and equitable if contribution pursuant to this Section 6(e) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section
6(e). The aggregate amount of losses, liabilities, claims, damages, and expenses incurred by an indemnified party and referred to above in this Section 6(e) shall be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission. 
  
 Notwithstanding the
provisions of this Section 6, no Holder of any Registrable Securities nor the Initial Purchasers shall be required to indemnify or contribute any amount in excess of the amount by which the total price at which the Registrable Securities sold by
such Holder of Registrable Securities or by the Initial Purchasers, as the case may be, and distributed to the public were offered to the public exceeds the amount of any damages that such Holder of 

  

 16 

 
Registrable Securities or the Initial Purchasers has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. 
  
 No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 
  
 SECTION 7. Information Requirements. If at any time before the end of the Effectiveness Period the Company ceases to
be required to file reports pursuant to the Exchange Act, the Company covenants that it will upon the reasonable request of any Holder of Registrable Securities (a) make publicly available such information as is reasonably necessary to permit sales
pursuant to Rule 144 under the Securities Act, (b) deliver such information to a prospective purchaser as is necessary to permit sales pursuant to Rule 144A under the Securities Act and it will take such further action as any Holder of Registrable
Securities may reasonably request, and (c) take such further action that is reasonable in the circumstances, in each case, to the extent required from time to time to enable such Holder to sell its Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by and customarily taken in connection with sales pursuant to (i) Rule 144 under the Securities Act, as such Rule may be amended from time to time, (ii) Rule 144A under the
Securities Act, as such Rule may be amended from time to time, or (iii) any similar rules or regulations hereafter adopted by the SEC. Upon the request of any Holder of Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements, unless such a statement has been included in the Company’s most recent report filed pursuant to Section 13 or 15(d) of the Exchange Act. Notwithstanding the foregoing, nothing in
this Section 7 shall be deemed to require the Company to register any of its securities (other than the Common Stock) under any section of the Exchange Act. 
  
 SECTION 8. Miscellaneous. 
  
 (a) No Conflicting Agreements. The Company is not, as of the date hereof, a party to, nor shall it, on or after the date of this Agreement, enter into,
any agreement with respect to the Company’s securities that conflicts with the rights granted to the Holders of Registrable Securities in this Agreement. The Company represents and warrants that the rights granted to the Holders of Registrable
Securities hereunder do not in any way conflict with the rights granted to the holders of the Company’s securities under any other agreements. The parties hereto agree that existing registration rights previously granted by the Company to other
holders of its Common Stock shall not be deemed in any way to violate or conflict with this Agreement or the rights granted to the Holders of Registrable Securities hereunder. The parties hereto further agree that any registration rights that may be
granted by the Company in the future to holders of its Common Stock or other securities shall not be deemed in any way to violate or conflict with this Agreement or the rights granted to the Holders of Registrable Securities hereunder so long as
such holders are not granted any right to participate as selling stockholders in any registration pursuant to this Agreement and are not granted any right that would prevent or restrict the Company from performing its obligations under this
Agreement. 
  
 (b) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or 

  

 17 

 
consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of Holders of a majority of the then
outstanding Underlying Common Stock constituting Registrable Securities (with Holders of Notes deemed to be the Holders, for purposes of this Section, of the number of outstanding shares of Underlying Common Stock into which such Notes are or would
be convertible as of the date on which such consent is requested). Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders of Registrable
Securities whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders of Registrable Securities may be given by Holders of at least a majority of the Registrable
Securities being sold by such Holders pursuant to such Registration Statement; provided that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding
sentence. Notwithstanding the foregoing, this Agreement may be amended by written agreement signed by the Company and the Initial Purchasers, without the consent of the Holders of Registrable Securities, to cure any ambiguity or to correct or
supplement any provision contained herein that may be defective or inconsistent with any other provision contained herein or to make such other provisions in regard to matters or questions arising under this Agreement that shall not adversely affect
the interests of the Holders of Registrable Securities. Each Holder of Registrable Securities outstanding at the time of any such amendment, modification, supplement, waiver or consent or thereafter shall be bound by any such amendment,
modification, supplement, waiver or consent effected pursuant to this Section 8(b), whether or not any notice, writing or marking indicating such amendment, modification, supplement, waiver or consent appears on the Registrable Securities or is
delivered to such Holder. 
  
 (c) Notices. All notices and other
communications provided for or permitted hereunder shall be made in writing by hand delivery, by telecopier (other than for notices and other communications to the Company), by courier guaranteeing overnight delivery or by first-class mail, return
receipt requested, and shall be deemed given (i) when made, if made by hand delivery, (ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day after being deposited with such courier, if made by overnight courier, or (iv) on the
date indicated on the notice of receipt, if made by first-class mail, to the parties as follows: 
  
 if to a Holder of Registrable Securities that is not a Notice Holder, at the address for such Holder then appearing in the Registrar (as defined in the
Indenture); 
  
 if to a Notice Holder, at the most current address
given by such Holder to the Company in a Notice and Questionnaire or any amendment thereto; 
  
 if to the Company, to: 
  
 Sunterra Corporation 
 3865 West Cheyenne Avenue 
 North Las Vegas, Nevada 89032 
 Telephone No. (702) 804-8600 
 Attention: Frederick C. Bauman 
      Vice President, General Counsel and Secretary 
  

 18 

 with a copy to: 
  

Baker McKenzie 
 One Prudential Plaza

 130 East Randolph Drive 
 Chicago, Illinois 60601 
 Telephone No. (312) 861-8000 
 Facsimile No. (312) 861-2899 
 Attention: Craig A. Roeder 
  
 and 
  
 if to the Initial Purchasers, to: 
  

Merrill Lynch, Pierce, Fenner & Smith 
         Incorporated 
 4 World Financial Center 
 New York, New York 10080 
 Attention:
Syndicate Department 
 Telecopier: (212) 738-1069 
  

with a copy to: 
  
 Sidley Austin Brown & Wood LLP 
 787
Seventh Avenue 
 New York, New York 10019 
 Telephone No. (212) 839-5300 
 Facsimile No. (212) 839-5599 
 Attention: L. Markus Wiltshire 
  
 or to such other address as such person may have furnished to the other persons identified in this Section 8(c) in writing in accordance herewith. 
  
 (d) Approval of Holders. Whenever the consent or approval of Holders of a
specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company or its Affiliates (other than the Initial Purchasers or subsequent Holders of Registrable Securities if such subsequent Holders are
deemed to be such affiliates solely by reason of their holdings of such Registrable Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. 
  
 (e) Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the successors and assigns of each of the parties hereto and, without requiring any express assignment, shall inure to the benefit of and be binding upon each Holder of any Registrable Securities; provided that nothing herein shall
be deemed to permit any assignment, transfer of other disposition of Registrable Securities in violation of the terms of the Purchase Agreement, the Indenture or applicable law. If any transferee of any Holder shall acquire Registrable Securities in
any manner, whether by operation of law or otherwise, such Registrable Securities shall be subject to all of the terms of this Agreement and by taking and holding such 

  

 19 

 
Registrable Securities, such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this
Agreement. 
  
 (f) Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be original and all of which taken together shall constitute one and the same agreement. 
  
 (g) Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof. 
  
 (h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 
  
 (i) Severability. If any term, provision, covenant or restriction of this Agreement is held to be invalid, illegal, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, and the parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction, it being intended that all of the rights and privileges of the parties hereto shall be enforceable to the
fullest extent permitted by law. 
  
 (j) Entire Agreement. This
Agreement is intended by the parties hereto as a final expression of their agreement and is intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein
and the registration rights granted by the Company with respect to the Registrable Securities. Except as provided in the Purchase Agreement, there are no restrictions, promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to the registration rights granted by the Company with respect to the Registrable Securities. This Agreement supersedes all prior agreements and undertakings among the parties hereto with respect to such registration rights.

  
 (k) Termination. This Agreement and the obligations of the
parties hereunder shall terminate upon the expiration of the Effectiveness Period, except for (i) any liabilities or obligations under Section 4, 5, 6 or 8 hereof and the obligations to make payments of and provide for liquidated damages under
Section 2(e) hereof to the extent such damages accrue prior to the end of the Effectiveness Period, each of which shall remain in effect in accordance with its terms. 
  

 20 

 IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first
written above. 
  

			
	 Very truly yours,

	
	 SUNTERRA CORPORATION

		
	 By:
	 	/s/ Frederick C. Bauman
	 	 	

	 	 	 Name: Frederick C. Bauman
 Title: Vice President

  

			
	 Agreed and accepted as of the date first
 above written:

	
	MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
		
	 By:
	 	/s/ Chris Baldwin
	 	 	

	 	 	 Name: Chris Baldwin
 Title: Director IB/L

  

			
	 CRT CAPITAL GROUP LLC

		
	 By:
	 	/s/ Francis P. Carr
	 	 	

	 	 	 Name: Francis P. Carr
 Title: Managing Director

  

 21Pledge Agreement dated as of March 29, 2004

 Exhibit 10.17 
  
 PLEDGE AGREEMENT 
  
 This PLEDGE AGREEMENT (this “Agreement”) is made and entered into as of March 29, 2004 by and among SUNTERRA CORPORATION, a Maryland corporation (the
“Grantor”), having its principal executive offices at 3865 West Cheyenne Avenue, North Las Vegas, Nevada 89032 and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells Fargo”), having an office at MAC N9303-120, Sixth Street and
Marquette Avenue, Minneapolis, MN 55479, (i) in its capacity as trustee (the “Trustee”) for the holders (the “Holders”) of the Notes (as hereinafter defined) issued by the Grantor under the Indenture referred to below and (ii) in
its individual capacity, as securities intermediary (in such capacity, the “Pledged Securities Intermediary”) at its office in Minneapolis c/o: Wells Fargo Bank, N.A., MAC N9303-120, Sixth Street and Marquette Avenue, Minneapolis, MN 55479
(the “Account Office”) with respect to the Pledge Account (as hereinafter defined). Capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in the Indenture. 
  
 W I T N E S S E T H 
  
 WHEREAS, the Grantor and the Trustee have entered into that certain Indenture
dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Indenture”), pursuant to which the Grantor is issuing on the date hereof $95,000,000 in aggregate principal amount of its 3 3/4%
Senior Subordinated Convertible Notes due 2024 (the “Notes”); and 
  
 WHEREAS, subject to the terms of this Agreement, the Pledged Securities Intermediary has established for the Grantor, as beneficial owner, a securities account (the “Pledge Account”) at the Account Office,
registered in the name of the Trustee, as entitlement holder, and designated as Account No. 16009301, Reference: Wells Fargo Bank Pledge Account for the benefit of the Holder of Sunterra 3 3/4%$ Senior Subordinated Convertible Notes; and 

 
 WHEREAS, the Grantor has agreed to purchase or cause the purchase of
security entitlements with respect to the U. S. Government Securities identified by CUSIP number in Schedule I hereto (such security entitlements being, collectively, the “Initial Pledged Securities”, together with the “Additional
Pledged Securities” (as defined below), the “Pledged Securities”), for the account of the Pledged Securities Intermediary for credit to the Pledge Account, in an amount that will be sufficient, upon receipt of the scheduled interest
and principal payments in respect thereof, to provide for the payment of the first six scheduled interest payments due on the Notes (up to and including the interest payment due on March 29, 2007, but excluding Additional Interest Amounts, if any);
and 
  
 WHEREAS, to secure the obligations of the Grantor under
the Indenture and the Notes to pay in full each of the first six scheduled interest payments on the Notes and to pay the principal and interest on the Notes and all other amounts payable by the Grantor under the Indenture in the event that the Notes
or any principal thereof becomes due and payable prior to such time as the first six scheduled interest payments thereon shall have been paid in full (collectively, the 

  

 
“Obligations”), the Grantor has agreed (i) to grant to the Trustee, for its benefit and the ratable benefit of the Holders of the Notes, a security
interest in the Pledge Account and all cash, Pledged Securities and other Collateral (as hereinafter defined) from time to time deposited therein or credited thereto and (ii) to execute and deliver this Agreement in order to secure the payment and
performance by the Grantor of all the Obligations; and; 
  
 WHEREAS, it is a condition precedent to the purchase of the Notes by the initial Holders thereof that the Grantor shall have granted the security interests contemplated by this Agreement; and 
  
 WHEREAS, unless otherwise defined herein or in the Indenture, terms used
herein that are defined in Article 8 or 9 of the Uniform Commercial Code as in effect in the State of New York (the “UCC”) are used herein as therein defined: 
  
 NOW, THEREFORE, in consideration of the mutual promises herein contained, and in order to induce the initial Holders to
purchase the Notes, the Grantor hereby agrees with the Trustee, for the benefit of the Trustee and for the ratable benefit of the Holders of the Notes, and with the Pledged Securities Intermediary as follows: 
  
 SECTION 1. Grant of Security Interest. The Grantor hereby grants to
the Trustee, for its benefit and for the ratable benefit of the Holders of the Notes, a security interest in and to all of the Grantor’s right, title and interest in, to and under the following, in each case whether now owned or hereafter
acquired, wherever located and whether now or hereafter existing (hereinafter collectively referred to as the “Collateral”): 
  
 (a) the Pledge Account; 
  
 (b) all cash or credit balances from time to time deposited in or credited to the Pledge Account; 
  
 (c) the Pledged Securities and all other financial assets (including
certificated and uncertificated securities) and security entitlements from time to time deposited in, credited to, or created or otherwise carried in the Pledge Account; 
  
 (d) all interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Collateral; 
  
 (e) all securities (whether certificated or uncertificated) or other financial assets, security entitlements, securities accounts, accounts, general intangibles, instruments, documents, cash or deposit accounts
representing or evidencing any or all of the Collateral; and 
  
 (f) to the extent not covered by clauses (a) through (e) above, all proceeds of any and all of the foregoing Collateral (including, without limitation, proceeds that constitute property of the types described in clauses (a) through (e)
above). 
  

 2 

 SECTION 2. Secured Obligations. This Agreement and the grant of a security interest in the
Collateral secure the prompt and complete payment and performance when due (whether at stated maturity, by acceleration, upon redemption or otherwise) of all Obligations now or hereafter existing, whether for principal, interest, fees, indemnities
or otherwise, and all obligations of the Grantor now or hereafter existing under this Agreement (all such Obligations and such other obligations being, collectively, the “Secured Obligations”). Without limiting the generality of the
foregoing, this Agreement and the grant of a security interest in the Collateral hereunder secure, to the fullest extent permitted by applicable law, the payment of all amounts that constitute part of the Secured Obligations and that would be owed
by the Grantor to the Trustee or the Holders under the Notes or the Indenture but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Grantor. 

 
 SECTION 3. Maintaining the Pledge Account. Prior to or concurrently
with the execution and delivery hereof and for so long as any Secured Obligation shall remain outstanding, 
  
 (a) the Trustee shall establish and maintain (and the Pledged Securities Intermediary shall maintain and administer in accordance with this Agreement) the
Pledge Account with the Pledged Securities Intermediary at the Account Office in accordance with the terms of this Agreement. The Pledge Account shall at all times be under the sole dominion and control of, and shall at all times be segregated from
any other custodial, collateral or other accounts maintained by, or under the dominion and control of, the Trustee; 
  
 (b) it shall be a term and condition of the Pledge Account, notwithstanding any term or condition to the contrary in any other agreement relating to the
Pledge Account, and except as otherwise provided by the provisions of Section 5 and Section 15.9 of this Agreement, that no Collateral (including proceeds thereof) shall be paid or released from the Pledge Account to or for the account of, or
withdrawn by or for the account of, and no entitlement orders with respect to any of the Collateral shall be given to the Pledged Securities Intermediary by, the Grantor or any other Person other than the Trustee as provided herein; 
  
 (c) subject to the provisions of this Agreement, the Pledge Account shall be
registered in the name of the Trustee on the books and records of the Pledged Securities Intermediary, the Trustee shall be identified on such books and records as the entitlement holder with respect to all security entitlements in all financial
assets from time to time held in or credited to the Pledge Account, and the Trustee shall have the sole right to (i) deliver entitlement orders with respect to the Pledge Account and any Collateral from time to time credited thereto, deposited
therein or represented thereby or (ii) make withdrawals from the Pledge Account or otherwise exercise any other rights with respect to any Collateral from time to time credited thereto or on deposit therein; and 
  
 (d) the Pledge Account shall be subject to such applicable laws, and such
applicable regulations of any appropriate banking or governmental authority, as may now or hereafter be in 

  

 3 

 
effect, including without limitation any applicable regulations of the Board of Governors of the Federal Reserve System. 
  
 SECTION 4. Acquisition of Pledged Securities for Credit to the Pledge
Account. 
  
 (a) On or prior to the date hereof, the Grantor
shall purchase or cause the purchase of the Pledged Securities for the account of the Pledged Securities Intermediary for credit to the Pledge Account. 
  
 (b) Upon transfer or credit of the Pledged Securities to the Pledged Securities Intermediary, as confirmed to the Pledged Securities Intermediary by the
Federal Reserve Bank of New York or another securities intermediary at which the Pledged Securities Intermediary maintains a securities account, the Pledged Securities Intermediary shall make appropriate book entries indicating that the Pledged
Securities have been credited to and are held in the Pledge Account. 
  
 SECTION 5. Disbursements From the Pledge Account; Transfers of Additional Amounts to the Pledge Account. 
  
 (a) At least three Business Days prior to the due date of any of the first six scheduled interest payments on the Notes, the Grantor may, pursuant to
written instructions given by the Grantor to the Trustee (each an “Issuer Order”), instruct the Trustee to direct the Pledged Securities Intermediary to release from the Pledge Account, and pay to the Holders of the Notes as of the
applicable Regular Record Date, proceeds of the Pledged Securities sufficient to provide for payment in full of such interest then due on the Notes. Upon receipt of an Issuer Order, the Trustee will direct the Pledged Securities Intermediary to
release funds from (and to the extent of) proceeds of the Pledged Securities in the Pledge Account in an amount sufficient to provide for the payment in full of such interest then due on the Notes, as instructed in such Issuer Order, and to transfer
such funds to the Holders of the Notes in accordance with the payment provisions of the Indenture. Nothing in this Section 5 shall affect the Trustee’s rights to direct the application of the Collateral to the payment of amounts due on the
Notes upon acceleration thereof in accordance with the terms of the Indenture. 
  
 (b) If the Grantor makes all or any portion of any interest payment for which the Collateral is security from a source of funds other than the Pledge Account (“Grantor Funds”), the Grantor may, after payment
in full of such interest payment, instruct the Trustee, pursuant to an Issuer Order, to direct the Pledged Securities Intermediary to release to the Grantor, or to another party designated by the Grantor in such Issuer Order (the
“Grantor’s Designee”), proceeds from the Pledge Account in an amount that, in the discretion of the Grantor, is less than or equal to the amount of Grantor Funds applied to such interest payment; provided that, after giving
effect to such release, the scheduled interest and principal payments in respect of the Pledged Securities remaining in the Pledge Account, together with any cash remaining in the Pledge Account, equal or exceed the amount necessary to provide for
the timely payment in full of interest on the Notes for as many of the first six scheduled interest payments as shall then remain. Upon (i) receipt by the Trustee of such Issuer Order and (ii) confirmation by the Trustee 

  

 4 

 
of the payment in full of such interest payment (from such Grantor Funds and, if necessary, additional funds released from the Pledge Account in accordance
with Section 5(a)), the Trustee shall direct the Pledged Securities Intermediary to release funds from (and to the extent of) proceeds of the Pledged Securities in the Pledge Account and to transfer such funds to the Grantor or the Grantor’s
Designee, as the case may be, as instructed in such Issuer Order as soon as practicable after such conditions are satisfied. 
  
 (c) If at any time the scheduled interest and principal payments in respect of the Pledged Securities then credited to the Pledge Account, together with
any cash then held in the Pledge Account, exceed 100% of the amount necessary (which shall be certified in writing by an Officer of the Company or, if such amount, together with all other amounts disbursed from the Pledge Account in the preceding 12
month period, equals or exceeds $100,000, by a nationally recognized firm of independent accountants selected by the Grantor and delivered to the Trustee) to provide for the payment in full, when due, of the first six scheduled interest payments on
the Notes (or such number of the first six scheduled interest payments on the Notes as shall then remain, as the case may be), the Grantor may instruct the Trustee, pursuant to an Issuer Order, to direct the Pledged Securities Intermediary to
release any such excess amount to the Grantor or to the Grantor’s Designee. Upon receipt of such Issuer Order (which shall be accompanied by a certificate in accordance with, and meeting the requirements of, the provisions of Section 314(d) of
the TIA or, if the amount to be released from the pledge, together with all other amounts disbursed from the Pledge Account in the preceding 12 month period, equals or exceeds $100,000, by a certificate of such nationally recognized firm of
independent accountants stating that the scheduled interest and principal payments in respect of the Pledged Securities credited to the Pledge Account, together with any cash held in the Pledge Account, in each case after giving effect to such
release, equal or exceed 100% of the amount necessary to provide for the payment in full, when due, of such remaining scheduled interest payments on the Notes), the Trustee shall instruct the Pledged Securities Intermediary to release funds from
(and to the extent of) proceeds of such Pledged Securities in accordance with such Issuer Order and the accompanying certificate and to transfer such funds to the Grantor or the Grantor’s Designee, as the case may be. 
  
 (d) Upon the release of any Collateral from the Pledge Account in accordance
with the terms of this Section 5, whether upon release of proceeds of Collateral to the Holders as payment of interest or upon release of proceeds of Collateral to the Grantor or the Grantor’s Designee as provided in Section 5(b) or Section
5(c), the security interest evidenced by this Agreement in such released Collateral will automatically terminate and be of no further force and effect. 
  
 (e) At least three Business Days prior to the due date of each of the first six scheduled interest payments on the Notes, the Grantor shall give the
Trustee notice (by Issuer Order) as to whether such interest payment will be made pursuant to Section 5(a) or 5(b) above and the respective amounts of interest that will be paid from the Pledge Account and from Grantor Funds (it being understood
that the failure by the Grantor to provide an Issuer Order shall not constitute an Event of Default). Any Grantor Funds to be used to make any interest payment (or portion 

  

 5 

 
thereof) shall be delivered to the Trustee, in immediately available funds, prior to 11:00 a.m. (New York City time) on such interest payment date. If no
such notice is given or such Grantor Funds have not been so delivered, the Trustee will act pursuant to Section 5(a) above as if it had received an Issuer Order pursuant thereto for the payment in full of the interest then due from the proceeds of
Pledged Securities in the Pledge Account. 
  
 (f) If on any
interest payment date there are insufficient proceeds of Pledged Securities in the Pledge Account to make the scheduled payment of interest due on such date (after taking into account any Grantor Funds delivered to the Trustee as provided in Section
5(b) above), the Trustee shall direct the Pledged Securities Intermediary to liquidate Collateral in the Pledge Account to the extent necessary to pay, in full, such scheduled payment of interest. 
  
 (g) Nothing contained in this Agreement (including without limitation the
provisions hereof regarding the delivery of Issuer Orders by the Grantor to the Trustee) shall (i) afford the Grantor any right to issue entitlement orders to the Pledged Securities Intermediary or any other Person with respect to the Pledge Account
or any security entitlement in respect of the Pledged Securities, or otherwise afford the Grantor control of the Pledge Account or any such security entitlement, or (ii) otherwise give rise to any rights of the Grantor with respect to the Pledge
Account, the Pledged Securities, or any security entitlement thereto, other than the Grantor’s rights under this Agreement as the beneficial owner of Collateral pledged to and subject to the exclusive dominion and control (subject to the
Trustee’s obligations to comply with Sections 5(a) through (f) and Section 15.9 hereof) of the Trustee in its capacity as such (and not as a securities intermediary). The Grantor acknowledges, confirms and agrees that the Trustee holds a
security interest in the Pledged Securities solely as Trustee for the Holders of the Notes and not as a securities intermediary. 
  
 (h) Anything contained herein to the contrary notwithstanding, prior to any release of any Collateral to the Grantor or the Grantor’s Designee, the
Grantor shall deliver to the Trustee such certificates, opinions or other documents as may be required by the Indenture or the TIA in connection with such release and shall otherwise comply with the requirements of the Indenture and the TIA
applicable thereto. 
  
 (i) If at any time the Grantor is
obligated to pay any amount to the Trustee pursuant to the terms of this Agreement and the Trustee charges such amount against the Pledge Account with the result that the scheduled interest and principal payments in respect of the Pledged Securities
then credited to the Pledge Account, together with any cash then held in the Pledge Account, are less than 100% of the amount necessary to provide for the payment in full, when due, of the first six scheduled interest payments on the Notes (or such
number of the first six scheduled interest payments on the Notes as shall then remain, as the case may be), the Grantor shall deposit cash into the Pledge Account in the amount of such deficiency and shall deliver to the Trustee a certificate signed
by one of its Officers (as defined in the Indenture) stating that the scheduled interest and principal payments in respect of the Pledged Securities credited to the Pledge Account, together with any cash held in the Pledge Account, in each case
after giving 

  

 6 

 
effect to such deposit by the Grantor, equal or exceed 100% of the amount necessary to provide for the payment in full, when due, of such remaining scheduled
interest payments on the Notes. 
  
 (j) Neither the Trustee nor
the Pledged Securities Intermediary shall be liable for any disbursement made or other action taken in accordance with an Issuer Order. In no event shall either of the Pledged Securities Intermediary or the Trustee in its role hereunder be liable
for any special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), except as a result of its gross negligence or willful misconduct. 
  
 SECTION 6. Securities Intermediary. (a) Wells Fargo, as Pledged
Securities Intermediary, hereby represents and warrants to, and agrees with the Grantor and the Trustee, as follows: 
  
 (a) It is a securities intermediary as of the date hereof and, for so long as this Agreement remains in effect and Wells Fargo is acting as the Pledged
Securities Intermediary hereunder, it shall remain a securities intermediary and shall at all times act in such capacity with respect to the Trustee, the Pledge Account and all other Collateral. 
  
 (b) The Pledge Account is and will be maintained as a securities account.

  
 (c) Each item of property (whether cash, certificated or
uncertificated securities, security certificates, security entitlements or any other property whatsoever) credited to the Pledge Account shall be treated as a financial asset. 
  
 (d) All financial assets in registered form or payable to, or to the order of, any Person and credited to the Pledge Account
shall be registered in the name of, payable to or to the order of, or endorsed to, the Pledged Securities Intermediary, and in no case during the term of this Agreement will any financial asset credited to the Pledge Account be registered in the
name of, payable to or to the order of, or endorsed to, the Grantor, except to the extent the foregoing have been subsequently endorsed by the Grantor to the Pledged Securities Intermediary or in blank. 
  
 (e) It (i) shall, upon written direction from the Trustee, as entitlement
holder with respect to the Pledge Account, the Pledged Securities and all other Collateral, and without further consent from the Grantor, comply with all instructions, entitlement orders and directions of any kind originated by the Trustee
concerning the Collateral, including without limitation directions to liquidate or otherwise dispose of the Collateral as and to the extent directed by the Trustee and to pay over to the Trustee, or as otherwise directed by the Trustee, all proceeds
and other value therefrom or otherwise distributed with respect thereto, without any set-off or deduction, and (ii) shall not, except as otherwise directed in writing by the Trustee, as entitlement holder with respect to the Pledge Account, the
Pledged Securities and all other Collateral, comply or agree to comply with any instructions, entitlement orders or directions of any kind that are originated by the Grantor or any other Person with respect to any of the Collateral. 
  

 7 

 (f) Except for the claims and interests of the Trustee under this Agreement and the rights of the Grantor
vis-à-vis the Trustee hereunder, it does not know of any claim to or security interest or other interest in the Collateral. 
  
 (g) It hereby waives its rights to set off any obligations of the Grantor to it against any or all of the Collateral, and hereby agrees that any and all
liens, encumbrances, claims or security interests which it may have against the Collateral, either now or in the future, are and shall be subordinate and junior in right of payment to the prior payment in full of all Secured Obligations. 

 
 SECTION 7. Representations and Warranties. The Grantor hereby
represents and warrants that: 
  
 (a) The execution and delivery
by the Grantor of, and the performance by the Grantor of its obligations under, this Agreement will not contravene any provision of applicable law or the articles of incorporation or by-laws of the Grantor or any material agreement or other material
instrument binding upon the Grantor or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Grantor, or result in the creation or imposition of any lien on any assets of the Grantor, except for the
security interests granted under this Agreement. 
  
 (b) No
consent of any other Person and no approval, authorization or order of, action by or qualification with, any governmental authority, regulatory body, agency or other third party is required (i) for the execution, delivery or performance by the
Grantor of its obligations under this Agreement or (ii) for the grant by the Grantor of the security interests created by this Agreement. To the best of Grantor’s knowledge, no consent of any other Person and no approval, authorization or order
of, action by or qualification with, any governmental authority, regulatory body, agency or other third party is required for the exercise by the Trustee of the rights provided for in this Agreement or the remedies in respect of the Collateral
pursuant to this Agreement. 
  
 (c) The Grantor is the beneficial
owner of the Collateral, free and clear of any lien or claim of any Person (except for the security interests created by this Agreement and any lien arising under the Indenture in favor of the Trustee). The Grantor has not at any time transferred
any of the Collateral to any Person other than the Trustee or encumbered any of the Collateral with a lien in favor of any other Person. No financing statement or instrument similar in effect covering all or any part of the Grantor’s interest
in any of the Collateral is on file in any public or recording office, other than the financing statements filed pursuant to this Agreement. 
  
 (d) This Agreement has been duly authorized, executed and delivered by the Grantor and constitutes a valid and binding agreement of the Grantor,
enforceable against the Grantor in accordance with its terms, except as the enforceability hereof may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by equitable principles of general
applicability. 
  

 8 

 (e) Upon the transfer to the Pledged Securities Intermediary of the Pledged Securities, the crediting
thereof to the Pledge Account in accordance with Section 4 above and the execution and delivery of this Agreement by all of the parties hereto, the grant of a security interest in the Collateral pursuant to this Agreement for the benefit of the
Trustee and the Holders of the Notes will create a valid and perfected first priority security interest in such Collateral securing the payment of the Secured Obligations. 
  
 (f) There are no legal or governmental proceedings pending or, to the best of the Grantor’s knowledge, threatened to
which the Grantor is a party or to which any of the properties of the Grantor is subject that would adversely affect in any material respect the power or ability of the Grantor to perform its obligations under this Agreement or to consummate the
transactions contemplated hereby. 
  
 (g) The pledge of the
Collateral pursuant to this Agreement is not prohibited by any law or governmental regulation (including, without limitation, Regulations U and X of the Board of Governors of the Federal Reserve System) applicable to the Grantor. 
  
 (h) To the best of Grantor’s knowledge, no Default or Event of Default
exists. 
  
 (i) The Grantor’s exact legal name is that
indicated on the signature page hereof. 
  
 (j) The Grantor is a
corporation organized in the State of Maryland 
  
 (k) The
Grantor’s organizational identification number is 95-4582157. 
  
 (l) The Grantor’s place of business or, if more than one, its chief executive office as well as the Grantor’s mailing address is as is set forth in Section 15.1. 
  
 SECTION 8. Further Assurances. 
  
 (a) The Grantor agrees that from time to time, it will, at its own expense, promptly upon reasonable request by the Trustee,
execute and deliver or cause to be executed and delivered, or use its best efforts to procure, all assignments, instruments and other documents, all in form and substance reasonably satisfactory to the Trustee, deliver any instruments to the Trustee
and take any other actions that may be necessary or, in the reasonable opinion of the Trustee, desirable to perfect, continue the perfection of, or protect the first priority of the Trustee’s security interest in and to the Collateral, to
protect the Collateral against the rights, claims, or interests of third Persons (other than any such rights, claims or interests created by or arising through the Trustee) or to effect the purposes of this Agreement. 
  
 (b) The Grantor hereby authorizes the Trustee to file any financing or
continuation statements with respect to the Collateral without the signature of the Grantor (to the extent permitted by applicable law); provided, however, that the Grantor shall not be relieved of any of its obligations under Section 8(a) or
8(d) hereof. A photocopy or other reproduction of this 

  

 9 

 
Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law.

  
 (c) The Grantor will furnish to the Trustee from time to time
statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Trustee may reasonably request, all in reasonable detail. 
  
 (d) The Grantor will promptly pay all costs and expenses reasonably incurred
in connection with any of the foregoing within 30 days of receipt of an invoice therefor. The Grantor also agrees, whether or not requested by the Trustee, to take all actions that are necessary to perfect and to continue the perfection of, and to
protect the first priority of, the Trustee’s security interest in and to the Collateral, including the filing of all necessary financing and continuation statements, and to protect the Collateral against the rights, claims or interests of third
Persons (other than any such rights, claims or interests created by or arising through the Trustee). 
  
 (e) The Grantor hereby irrevocably authorizes the Trustee at any time and from time to time to file in any Uniform Commercial Code jurisdiction any
initial financing statements and amendments thereto that (x) indicate the Collateral as being of an equal or lesser scope or with greater detail, and (y) contain any other information required by part 5 of Article 9 of the Uniform Commercial Code of
the appropriate jurisdiction for the sufficiency or filing office acceptance of any financing statement or amendment; provided that the Trustee shall have no obligation to perform any of the foregoing actions other than those expressly
provided herein or in the Indenture. 
  
 (f) The Pledged
Securities Intermediary covenants and agrees with the Grantor and the Trustee that for so long as the Pledged Securities Intermediary holds assets in the Pledge Account, the Pledged Securities Intermediary will, as soon as reasonably practicable,
certify in writing the aggregate dollar value of the assets held in such Pledge Account on a monthly basis, as of the Grantor’s fiscal month end or at such other time as the parties may mutually agree. The Grantor will provide the Pledged
Securities Intermediary with a schedule of its fiscal months as soon as such schedule becomes reasonably available. 
  
 SECTION 9. Covenants. The Grantor covenants and agrees with the Trustee and the Holders of the Notes that from and after the date of this Agreement
until the earlier of (x) payment in full in cash of each of the first six scheduled interest payments due on the Notes (up to and including the interest payment due on March 29, 2007, but excluding Additional Interest Amounts, if any) under the
terms of the Indenture or (y) payment in cash of Secured Obligations due and owing under the Indenture and the Notes in the event such Secured Obligations become due and payable prior to the payment in full of the first six scheduled interest
payments on the Notes (up to and including the interest payment due on March 29, 2007, but excluding Additional Interest Amounts, if any): 
  
 (a) it will not (and will not purport to) sell or otherwise dispose of, or grant any option, right or warrant with respect to, any of the Collateral or
its beneficial interest therein, and 

  

 10 

 
it will not create or permit to exist any lien or other adverse interest in or with respect to its beneficial interest in any of the Collateral (except for
the security interests granted under this Agreement and any lien arising under the Indenture in favor of the Trustee); 
  
 (b) it will not (i) enter into any agreement or understanding that restricts or inhibits or purports to restrict or inhibit the Trustee’s rights or
remedies hereunder, including without limitation the Trustee’s right to sell or otherwise dispose of the Collateral, or (ii) fail to pay or discharge when due any tax, assessment or levy of any nature with respect to its beneficial interest in
the Collateral not later than five days prior to the date of any proposed sale under any judgment, writ or warrant of attachment with respect to such beneficial interest; and 
  
 (c) it will not, without providing at least five days prior written notice to the Trustee, change its name, its place of
business or, if more than one, chief executive office, or its mailing address or organizational identification number and will not change its type of organization, jurisdiction of organization or other legal structure. 
  
 SECTION 10. Power of Attorney. In addition to all of the powers
granted to the Trustee pursuant to the Indenture, the Grantor hereby appoints and constitutes the Trustee as the Grantor’s attorney-in-fact (with full power of substitution), with full authority in the place and stead of the Grantor and in the
name of the Grantor or otherwise, from time to time in the Trustee’s reasonable discretion to take any action and to execute any instrument that the Trustee may deem necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation: 
  
 (a) to ask for, demand,
collect, sue for, recover, compromise, receive and give acquittance and receipt for moneys due and to become due under or in respect of any of the Collateral, 
  

(b) to receive, indorse and collect any drafts or other instruments, documents and chattel paper, 
  
 (c) to file any claims or take any action or institute any proceedings that
the Trustee may reasonably deem necessary or desirable for the collection of any of the Collateral or otherwise to enforce the rights of the Trustee with respect to any of the Collateral, and 
  
 (d) to pay or discharge any taxes or liens levied or placed upon the
Collateral, the legality or validity thereof and the amounts necessary to discharge the same all as determined by the Trustee in its sole discretion, it being understood that any such payments made by the Trustee shall become part of the Secured
Obligations of the Grantor to the Trustee, and shall be due and payable immediately upon demand; 
  
 provided, however, that the Trustee shall have no obligation to perform any of the foregoing actions. The Trustee’s authority under this Section 10 shall include, without limitation, the authority to
endorse and negotiate any checks or instruments representing proceeds of Collateral in the name of the Grantor, execute and give receipt for any certificate of ownership or any 

  

 11 

 
document constituting Collateral, transfer title to any item of Collateral, authorize the filing of any financing statements (to the extent permitted by
applicable law) or any other documents reasonably deemed necessary or appropriate by the Trustee to preserve, protect or perfect the security interest in the Collateral and to file the same, prepare, file and sign the Grantor’s name on any
notice of lien, and to take any other actions arising from or incident to the powers granted to the Trustee in this Agreement. This power of attorney is coupled with an interest and is irrevocable by the Grantor. 
  
 SECTION 11. No Assumption of Duties; Reasonable Care. The rights and
powers conferred on the Trustee hereunder are solely to preserve and protect the security interest of the Trustee and the Holders of the Notes in and to the Collateral granted hereby and shall not be interpreted to, and shall not, impose any duties
on the Trustee in connection therewith other than those expressly provided herein or in the Indenture or imposed under applicable law. Except as provided by herein, by applicable law or by the Indenture, the Trustee shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its possession if the Collateral is accorded treatment substantially equal to that which the Trustee accords similar property held by itself for its own account, it being
understood that the Trustee, in its capacity as such, shall not have any responsibility for (a) ascertaining or taking action with respect to calls, conversions, exchanges, maturities or other matters relative to any Collateral, whether or not the
Trustee has or is deemed to have knowledge of such matters, (b) taking any necessary steps to preserve rights against any parties with respect to any Collateral or (c) investing or reinvesting any of the Collateral or any loss on any investment.
Without limiting any rights of the Trustee hereunder, the rights and limitations upon the liability of the Trustee set forth in Article 5 of the Indenture are expressly incorporated herein and made a part hereof and shall extend to the role of the
Trustee as Pledged Securities Intermediary. 
  
 SECTION 12.
Indemnity. The Grantor shall indemnify, hold harmless and defend the Trustee, the Pledged Securities Intermediary and each of their respective directors, officers, agents and employees, from and against any and all claims, actions,
obligations, liabilities and expenses, including defense costs, investigative fees and costs, and legal fees and damages arising from their execution of or performance under this Agreement, except to the extent that such claim, action, obligation,
liability or expense is directly attributable to the bad faith, gross negligence or willful misconduct of such indemnified person. This indemnification shall survive the termination of this Agreement. 
  
 SECTION 13. Remedies Upon Event of Default. If prior to March 29,
2007, (i) any Event of Default shall have occurred and be continuing and (ii) the Trustee, by notice to the Company, or the Holders of at least 25% in aggregate principal amount of the Notes at the time outstanding by written notice to the Company
and the Trustee, may declare the Notes due and payable at their principal amount together with accrued and unpaid interest; provided if an Event of Default specified in Section 6.01(6) or (7) of the Indenture occurs and is continuing, then the
principal and the interest on all the Notes shall become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders, then: 
  

 12 

 (a) The Trustee may exercise, in addition to all other rights given by law or by this Agreement or the
Indenture, all of the rights and remedies with respect to the Collateral of a secured party under the Uniform Commercial Code as in effect from time to time in any relevant jurisdiction and also may, without notice except as specified below, (i)
sell, redeem or liquidate any of the Collateral, (ii) transfer any or all of the Collateral to any account designated by the Trustee, including an account or accounts established in the Trustee’s name, (iii) register title to any Collateral in
any name specified by the Trustee, including the name of the Trustee or any of its nominees or agents, without reference to any interest of the Grantor, or (iv), sell the Collateral or any part thereof in one or more parcels at any broker’s
board or at public or private sale, in one or more sales or lots, at any of the Trustee’s offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Trustee may deem commercially reasonable. The Grantor
agrees that the Collateral is of a type customarily sold on recognized markets and, accordingly, that no notice to any Person is required before any sale of any of the Collateral pursuant to the terms of this Agreement; provided, however
that, without prejudice to the foregoing, to the extent notice of any such sale shall be required by law, the Grantor agrees that at least ten days’ notice to the Grantor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. The Trustee shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. The Trustee may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. The purchaser of any or all Collateral so sold shall thereafter hold the same
absolutely free from any claim, encumbrance or right of any kind whatsoever created by or through the Grantor. Any sale of the Collateral conducted in conformity with reasonable commercial practices of banks, insurance companies, commercial finance
companies, or other financial institutions disposing of property similar to the Collateral shall be deemed to be commercially reasonable. The Trustee or any Holder of Notes may, in its own name or in the name of a designee or nominee, buy any of the
Collateral at any public sale and, if permitted by applicable law, at any private sale. All expenses (including court costs and reasonable attorneys’ fees, expenses and disbursements) of, or incident to, the enforcement of any of the provisions
hereof shall be recoverable from the proceeds of the sale or other disposition of the Collateral. If there are insufficient Pledged Securities together with proceeds of Pledged Securities and other Collateral in the Pledge Account to make any
required payment on the Secured Obligations, the Grantor shall be liable to the Trustee for any deficiency. 
  
 (b) All cash proceeds received by or on behalf of the Trustee in respect of any sale of, collection from, or other realization upon all or any part of the
Collateral may, following the payment of the reasonable fees and expenses of the Trustee, be held by the Trustee (or by the Pledged Securities Intermediary on its behalf) as collateral for, and/or then or at any time thereafter applied (after
payment of any amounts payable to the Trustee pursuant to Section 14) in whole or in part by the Trustee as follows: 
  
 FIRST: To the payment of the amount equal to all accrued and unpaid interest on the Notes; and 
  

 13 

 SECOND: To the repayment of a portion of the principal of the Notes and accrued and
unpaid Additional Interest Amounts, if any. 
  
 (c) The Trustee
may, without notice to the Grantor except as required by law and at any time or from time to time, charge, set-off and otherwise apply all or any part of the Secured Obligations against the Pledge Account or any part thereof. 
  
 (d) The Grantor further agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all or any portion of the Collateral pursuant to this Section 13 valid and binding and in compliance with any and all other applicable requirements of law. The Grantor
further agrees that a breach of any of the covenants contained in this Section 13 will cause irreparable injury to the Trustee and the Holders of the Notes, that the Trustee and the Holders of the Notes have no adequate remedy at law in respect of
such breach and, as a consequence, that each and every covenant contained in this Section 13 shall be specifically enforceable against the Grantor and, to the fullest extent permitted by law, the Grantor hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred and is continuing. 
  
 (e) Notwithstanding the foregoing, the Trustee and the Holders of the Notes shall not have the benefit of the remedies set forth in this Section 13 if an
Event of Default has occurred but is cured prior to the acceleration of the Notes by the Trustee or the Holders of the Notes. 
  
 SECTION 14. Expenses. The Grantor will promptly upon demand pay to the Trustee and the Pledged Securities Intermediary the amount of any and all
reasonable expenses, including, without limitation, the reasonable fees, expenses and disbursements of counsel, experts and agents retained by the Trustee or the Pledged Securities Intermediary, as the case may be, that the Trustee or the Pledged
Securities Intermediary, as the case may be, may incur in connection with (a) the review, negotiation and administration of this Agreement, (b) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the
Collateral, (c) the exercise or enforcement of any of the rights of the Trustee and the Holders of the Notes hereunder or (d) the failure by the Grantor to perform or observe any of the provisions hereof. 
  
 SECTION 15. Miscellaneous Provisions. 
  
 Section 15.1. Notices. Any notice or other communication given
hereunder shall be sufficiently given if in writing and delivered in person or mailed by first class mail, commercial courier service or telecopier communication, addressed as follows: 
  
 IF TO THE GRANTOR: 
  
 Sunterra Corporation 
 3865 West Cheyenne
Avenue 
 North Las Vegas, Nevada 89032 
 Attention: Frederick C. Bauman 
 Fax: 702-304-7099 
  

 14 

 IF TO THE TRUSTEE OR PLEDGED SECURITIES INTERMEDIARY: 
  
 Wells Fargo Bank, National Association 
 MAC N9303-120 
 Sixth Street and Marquette
Avenue 
 Minneapolis, MN 55479 
 Attention: Michael T. Lechner 
 Fax: 612-667-9825 
  
 All such notices and other communications shall, when mailed, delivered or telecopied, respectively, be effective when
deposited in the mails, delivered or telecopied, respectively, addressed as aforesaid. 
  
 Section 15.2. No Adverse Interpretation of Other Agreements. This Agreement may not be used to interpret another pledge, security or debt agreement of the Grantor or any subsidiary thereof. No such pledge,
security or debt agreement (other than the Indenture) may be used to interpret this Agreement. 
  
 Section 15.3. Severability. The provisions of this Agreement are severable, and if any clause or provision shall be held invalid, illegal or unenforceable in whole or in part in any jurisdiction, then, to the
fullest extent permitted by law, such invalidity or unenforceability shall affect in that jurisdiction only such clause or provision, or part thereof, and shall not in any manner affect such clause or provision in any other jurisdiction or any other
clause or provision of this Agreement in any jurisdiction. 
  
 Section 15.4. Headings. The headings in this Agreement have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof.

  
 Section 15.5. Counterpart Originals. This Agreement may
be signed in two or more counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same agreement. 
  
 Section 15.6. Benefits of Agreement. Nothing in this Agreement, express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder, and the Holders of the Notes, any benefit or any legal or equitable right, remedy or claim under this Agreement. 
  
 Section 15.7. Amendments, Waivers and Consents. Any amendment or waiver of any provision of this Agreement and any consent to any departure by the
Grantor from any provision of this Agreement shall be effective only if made or duly given in compliance with all of the terms and provisions of the Indenture, and then such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given, provided that an amendment or supplement to this Agreement for the purpose contemplated by Section 16 may be entered into 

  

 15 

 
by the Grantor, the Trustee and the Pledged Securities Intermediary without the consent of any Holder, so long as such amendment or supplement is reasonably
satisfactory in form and substance to the Grantor, the Trustee and the Pledged Securities Intermediary. Neither the Trustee nor any Holder of Notes shall be deemed, by any act, delay, indulgence, omission or otherwise, to have waived any right or
remedy hereunder or to have acquiesced in any Event of Default or in any breach of any of the terms and conditions hereof. Failure of the Trustee or any Holder of Notes to exercise, or delay in exercising, any right, power or privilege hereunder
shall not preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Trustee or any Holder of Notes of any right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy that the Trustee or such Holder would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or remedies provided
by law. 
  
 Section 15.8. Interpretation of Agreement. To
the fullest extent permitted by applicable law, acceptance of or acquiescence in a course of performance rendered under this Agreement shall not be relevant to determine the meaning of this Agreement even though the accepting or acquiescing party
had knowledge of the nature of the performance and opportunity for objection. 
  
 Section 15.9. Continuing Security Interest; Termination. 
  
 (a) This Agreement shall create a continuing security interest in and to the Collateral and shall, unless otherwise provided in this Agreement, remain in
full force and effect until the payment in cash of the Secured Obligations. This Agreement shall be binding upon the Grantor, its transferees, successors and assigns, and shall inure, together with the rights and remedies of the Trustee hereunder,
to the benefit of the Trustee, the Holders of the Notes, the Pledged Securities Intermediary and their respective successors, transferees and assigns. 
  
 (b) This Agreement (other than Grantor’s obligations under Sections 12 and 14) shall terminate upon the earlier of (i) the payment in cash of the
Secured Obligations and (ii) the payment in full in cash of the first six scheduled interest payments on all of the Notes. At such time, the Trustee shall, pursuant to an Issuer Order, direct the Pledged Securities Intermediary to promptly transfer
to the Grantor all of the Collateral hereunder that has not been sold, disposed of, retained or applied by or on behalf of the Trustee in accordance with the terms of this Agreement and the Indenture and take all other actions that are necessary to
release the security interest created by this Agreement in and to the Collateral, including the execution and delivery of all termination statements necessary to terminate any financing or continuation statements filed with respect to the
Collateral. Such transfer shall be without warranty by or recourse to the Trustee in its capacity as such, except as to the absence of any liens on the Collateral created by or arising through the Trustee, and shall be at the expense of the Grantor.

  
 Section 15.10. Survival of Representations and
Covenants. All representations, warranties and covenants of the Grantor contained herein shall survive the execution and delivery of this Agreement and the termination of this Agreement. 
  

 16 

 Section 15.11. Waivers. The Grantor, to the fullest extent permitted by applicable law, waives
presentment and demand for payment of any of the Obligations, protest and notice of dishonor or default with respect to any of the Obligations, and all other notices to which the Grantor might otherwise be entitled, except as otherwise expressly
provided herein or in the Indenture. 
  
 Section 15.12.
Authority of the Trustee. 
  
 (a) The Trustee shall have
and be entitled to exercise all powers hereunder that are specifically granted to it by the terms hereof, together with such powers as are reasonably incident thereto. The Trustee may perform any of its duties hereunder or in connection with the
Collateral by or through agents or employees and shall be entitled to retain counsel and to act in reliance upon the advice of counsel concerning all such matters. Except as otherwise expressly provided in this Agreement or the Indenture, neither
the Trustee nor any director, officer, employee, attorney or agent of the Trustee shall be liable to the Grantor for any action taken or omitted to be taken by the Trustee, in its capacity as Trustee, hereunder, except for its own bad faith, gross
negligence or willful misconduct, and the Trustee shall not be responsible for the validity, effectiveness or sufficiency hereof or of any document or security furnished pursuant hereto. The Trustee and its directors, officers, employees, attorneys
and agents shall be entitled to rely on any communication, instrument or document reasonably believed by it or them to be genuine and correct and to have been signed or sent by the proper person or persons. 
  
 (b) The Grantor acknowledges that the rights and responsibilities of the
Trustee under this Agreement with respect to any action taken by the Trustee or the exercise or non-exercise by the Trustee of any option, right, request, judgment or other right or remedy provided for herein or resulting or arising out of this
Agreement shall, as between the Trustee and the Holders of the Notes, be governed by the Indenture and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Trustee and the Grantor, the Trustee
shall be conclusively presumed to be acting as agent for the Holders of the Notes with full and valid authority so to act or refrain from acting, and the Grantor shall not be obligated or entitled to make any inquiry respecting such authority.

  
 Section 15.13. Final Expression. This Agreement,
together with the Indenture and any other agreement executed in connection herewith, is intended by the parties as a final expression of this Agreement and is intended as a complete and exclusive statement of the terms and conditions thereof.

  
 Section 15.14. Rights of Holders of the Notes. No
Holder of Notes shall have any independent rights hereunder other than those rights granted to individual Holders of the Notes pursuant to the Indenture; provided that nothing in this subsection shall limit any rights granted to the Trustee
under the Notes or the Indenture. 
  

 17 

 Section 15.15. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial; Waiver of Damages.

  
 (a) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED UNDER
THE LAWS OF THE STATE OF NEW YORK. 
  
 (b) ANYTHING CONTAINED IN
THIS AGREEMENT OR IN ANY OTHER AGREEMENT BETWEEN THE TRUSTEE AND THE PLEDGED SECURITIES INTERMEDIARY TO THE CONTRARY NOTWITHSTANDING, THE “PLEDGED SECURITIES INTERMEDIARY’S JURISDICTION” WITH RESPECT TO THE PLEDGED SECURITIES FOR
PURPOSES OF SECTIONS 8-110(e), 9-305(a)(3) AND 9-304(b)(1) OF THE UCC SHALL BE THE STATE OF NEW YORK. 
  
 (c) FOR ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE GRANTOR HEREBY AGREES TO SUBMIT TO THE JURISDICTION OF ANY FEDERAL OR STATE
COURT LOCATED IN THE CITY OF NEW YORK. 
  
 (d) THE GRANTOR AGREES
THAT THE TRUSTEE SHALL, IN ITS CAPACITY AS TRUSTEE OR IN THE NAME AND ON BEHALF OF ANY HOLDER OF NOTES, HAVE THE RIGHT, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW (AND TO THE EXTENT THE TRUSTEE HAS RECEIVED INDEMNITY DEEMED SATISFACTORY TO IT
AND HAS AGREED TO DO SO), TO PROCEED AGAINST THE GRANTOR OR THE COLLATERAL IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH (AND HAVING PERSONAL OR IN REM JURISDICTION OVER THE GRANTOR OR THE COLLATERAL, AS THE CASE MAY BE) TO ENABLE THE
TRUSTEE TO REALIZE ON SUCH COLLATERAL, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE TRUSTEE. THE GRANTOR AGREES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THAT IT WILL NOT ASSERT ANY COUNTERCLAIMS, SETOFFS OR
CROSSCLAIMS IN ANY PROCEEDING BROUGHT BY THE TRUSTEE TO REALIZE ON SUCH PROPERTY OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE TRUSTEE, EXCEPT FOR SUCH COUNTERCLAIMS, SETOFFS OR CROSSCLAIMS WHICH, IF NOT ASSERTED IN ANY SUCH
PROCEEDING, COULD NOT OTHERWISE BE BROUGHT OR ASSERTED. THE GRANTOR WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN THE CITY OF NEW YORK IN THE BOROUGH OF MANHATTAN ONCE THE
TRUSTEE HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS. 
  
 (e) THE GRANTOR AGREES THAT NONE OF ANY HOLDER OF NOTES, (EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT OR THE INDENTURE)
THE TRUSTEE IN ITS CAPACITY AS TRUSTEE, OR WELLS FARGO BANK, NATIONAL ASSOCIATION IN ITS CAPACITY AS PLEDGED SECURITIES INTERMEDIARY SHALL HAVE ANY LIABILITY TO THE GRANTOR (WHETHER ARISING IN TORT, 

  

 18 

 
CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE GRANTOR IN CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THE TRANSACTIONS CONTEMPLATED AND THE
RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, UNLESS SUCH LOSSES WERE THE RESULT OF ACTS OR OMISSIONS ON THE PART OF THE TRUSTEE OR SUCH HOLDERS OF NOTES, AS THE CASE MAY BE,
CONSTITUTING BAD FAITH, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. 
  
 (f) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE GRANTOR WAIVES THE POSTING OF ANY BOND OTHERWISE REQUIRED OF THE TRUSTEE OR ANY HOLDER OF NOTES IN CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO ENFORCE ANY JUDGMENT OR
OTHER COURT ORDER PERTAINING TO THIS AGREEMENT OR ANY RELATED AGREEMENT OR DOCUMENT ENTERED IN FAVOR OF THE TRUSTEE OR ANY HOLDER OF NOTES, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER OR PRELIMINARY OR PERMANENT INJUNCTION,
THIS AGREEMENT OR ANY RELATED AGREEMENT OR DOCUMENT BETWEEN THE GRANTOR ON THE ONE HAND AND THE TRUSTEE AND/OR THE HOLDERS OF THE NOTES ON THE OTHER HAND. 
  
 SECTION 16. Provisions Relating to Additional Notes. The Grantor and the Trustee, on behalf of the Holders of the Notes originally issued on the
date hereof (the “Initial Notes”) and on behalf of the Holders of any “Additional Notes” (which term includes any “Option Securities” as defined in the Purchase Agreement dated March 23, 2004 among the Grantor and the
Initial Purchasers named therein and relating to the Notes), hereby acknowledge that the Grantor may issue Additional Notes from time to time after the date hereof and that, pursuant to the terms of the Indenture, the Initial Notes and any
Additional Notes will be treated as part of a single class for all purposes under the Indenture. Accordingly, anything contained herein to the contrary notwithstanding, (a) upon the issuance of any Additional Notes (i) for all purposes under this
Agreement the term “Notes” shall thereafter include such Additional Notes; provided that any references herein to the first six scheduled interest payments due on the Notes shall mean, with respect to such Additional Notes, only
such number, if any, of the first six scheduled interest payments on the Notes as shall then remain at the time such Additional Notes are originally issued (such number, if any, of the first six scheduled interest payments on the Notes that shall
remain at such time being the “Covered Interest Payments” in respect of such Additional Notes), (ii) in the event that any Additional Notes are issued prior to such time as the first six scheduled interest payments on the Notes shall have
been paid in full, the Grantor shall purchase or cause to be purchased, for the account of the Pledged Securities Intermediary for credit to the Pledge Account, additional security entitlements with respect to U. S. Government Securities (such
security entitlements being, collectively, the “Additional Pledged Securities”) in an amount that will be sufficient, upon receipt of the scheduled interest and principal payments in respect thereof, to provide for the payment of all
Covered Interest Payments in respect of such Additional Notes, and (iii) for all purposes under this Agreement (including without limitation 

  

 19 

 
Section 4(b)) the term “Pledged Securities” shall thereafter include any such Additional Pledged Securities, and (b) as provided in Section 15.7,
in connection with the issuance of any Additional Notes, the parties hereto shall be permitted to enter into such amendments or supplements to this Agreement as may be necessary or advisable in order to give effect to the provisions of this Section
16 without the consent of the Holders of the Initial Notes or the Holders of any Additional Notes that are outstanding at the time of such issuance. For the avoidance of doubt and without limiting the generality of the foregoing, the Grantor and the
Trustee, on behalf of the Holders of the Notes, hereby acknowledge and agree that the Holders of the Initial Notes and the Holders of any Additional Notes shall be entitled to share ratably in the benefits of this Agreement. In the event that the
Grantor shall issue Additional Notes on more than one occasion, then the provisions of this Section 16 shall apply to such successive issuances of Additional Notes, mutatis mutandis. 
  

 20 

 IN WITNESS WHEREOF, the Grantor, the Trustee and the Pledged Securities Intermediary have each caused
this Agreement to be duly executed and delivered as of the date first above written. 
  

			
	 Grantor:

	
	 SUNTERRA CORPORATION

		
	By:	 	Steven E. West
	 	 	

	 	 	 Name: Steven E. West
 Title: Senior Vice President

	
	 Trustee:

	
	WELLS FARGO BANK, NATIONAL ASSOCIATION
		
	By:	 	/s/ Michael T. Lechner
	 	 	

	 	 	 Name: Michael T. Lechner
 Title: Assistant Vice President

	
	 Pledged Securities Intermediary:

	
	WELLS FARGO BANK, NATIONAL ASSOCIATION
		
	By:	 	/s/ Michael T. Lechner
	 	 	

	 	 	 Name: Michael T. Lechner
 Title: Assistant Vice President

  

 21 

 SCHEDULE I 
  
 PLEDGED SECURITIES 
  

								
	 SECURITY

	  	CUSIP NO.

	  	 MATURITY

	  	PRINCIPAL
AMOUNT

	 United States Treasury
	  	912833CL2	  	August 15, 2004	  	 	1,782,000
	 United States Treasury
	  	912833CM0	  	February 15, 2005	  	 	1,782,000
	 United States Treasury
	  	912833CN8	  	August 15, 2005	  	 	1,782,000
	 United States Treasury
	  	912833CP3	  	February 15, 2006	  	 	1,782,000
	 United States Treasury
	  	912833CQ1	  	August 15, 2006	  	 	1,782,000
	 United States Treasury
	  	912833CR9	  	February 15, 2007	  	 	1,782,000
	 TOTAL
	  	 	  	 	  	$	10,692,000
	 	  	 	  	 	  	
	

  

 22

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