Document:

DR - 6.30.2012 - Ex 10.2

EXHIBIT 10.2

                    
	
	
	 

	LOAN AND SECURITY AGREEMENT
dated as of

May 21, 2012
among
DPM ACQUISITION, LLC
The Lenders Party Hereto

GUGGENHEIM CORPORATE FUNDING, LLC,
as Administrative Agent

	 

1

Table of Contents

	
			
	ARTICLE I Definitions
	5
	

	 
	 

	SECTION 1.01. Defined Terms
	5
	

	SECTION 1.02. Classification of Loans and Borrowings.
	18
	

	SECTION 1.03. Terms Generally
	18
	

	SECTION 1.04. Accounting Terms; GAAP
	18
	

	SECTION 1.05. Status of Obligations
	19
	

	 
	 

	ARTICLE II The Credits
	19
	

	 
	 

	SECTION 2.01. Commitments
	19
	

	SECTION 2.02. Loans and Borrowings
	19
	

	SECTION 2.03. Requests for Borrowings
	19
	

	SECTION 2.04. Funding of Borrowings
	20
	

	SECTION 2.05. Termination and Reduction of Commitments
	20
	

	SECTION 2.06. Repayment of Loans; Evidence of Debt
	20
	

	SECTION 2.07. Prepayment of Loans
	20
	

	SECTION 2.08. Fees
	21
	

	SECTION 2.09. Interest
	22
	

	SECTION 2.10. Increased Costs
	22
	

	SECTION 2.11. Taxes
	23
	

	SECTION 2.12. Payments Generally; Pro Rata Treatment; Sharing of Set-offs
	26
	

	SECTION 2.13. Mitigation Obligations
	26
	

	SECTION 2.14. Defaulting Lenders
	27
	

	SECTION 2.15. Grant of Security Interest; Collateral
	27
	

	 
	 

	ARTICLE III Representations and Warranties
	27
	

	 
	 

	SECTION 3.01. Existence, Qualification and Power; Compliance with Laws
	27
	

	SECTION 3.02. Binding Effect
	28
	

	SECTION 3.03. Authorization; No Contravention
	28
	

	SECTION 3.04. Governmental Authorization; Other Consents
	28
	

	SECTION 3.05. Taxes
	28
	

	SECTION 3.06. No Default
	28
	

	SECTION 3.07. Financial Statements; No Material Adverse Effect
	28
	

	SECTION 3.08. Security Interest
	29
	

	SECTION 3.09. Ownership of Assets
	29
	

	SECTION 3.10. No Other Business
	29
	

	SECTION 3.11. Insurance
	29
	

	SECTION 3.12. Disclosure
	29
	

	SECTION 3.13. Subsidiaries; Equity Interests
	30
	

	SECTION 3.14. No Dividend Restrictions
	30
	

	SECTION 3.15. Litigation
	30
	

	SECTION 3.16. Solvency
	30
	

2

	
			
	SECTION 3.17. Margin Regulations; Investment Company Act; USA PATRIOT Act
	30
	

	SECTION 3.18.ERISA Compliance
	31
	

	SECTION 3.19.Environmental Compliance
	31
	

	 
	 

	ARTICLE IV Conditions
	31
	

	 
	 

	SECTION 4.01. Effective Date
	31
	

	SECTION 4.02. Each Borrowing
	32
	

	 
	 

	ARTICLE V Affirmative Covenants
	33
	

	 
	 

	SECTION 5.01. Financial Statements
	33
	

	SECTION 5.02. Compliance Certificate
	34
	

	SECTION 5.03. Notices
	34
	

	SECTION 5.04. Compliance with Laws
	35
	

	SECTION 5.05. Preservation of Existence, Etc.
	35
	

	SECTION 5.06. Compliance with Environmental Laws
	35
	

	SECTION 5.07. Maintenance of Properties; Ownership of Subsidiaries
	36
	

	SECTION 5.08. Maintenance of Insurance
	36
	

	SECTION 5.09. Use of Proceeds
	36
	

	SECTION 5.10. Payment of Obligations
	36
	

	SECTION 5.11. Cooperation
	36
	

	SECTION 5.12. Books and Records
	36
	

	SECTION 5.13. Loan Documents; Material Documents
	36
	

	SECTION 5.14. Inspection Rights
	37
	

	SECTION 5.15. Reports Accurate
	37
	

	 
	 

	ARTICLE VI Negative Covenants
	38
	

	 
	 

	SECTION 6.01. Liens
	38
	

	SECTION 6.02. Dispositions
	39
	

	SECTION 6.03. Restricted Payments
	39
	

	SECTION 6.04. Investments
	39
	

	SECTION 6.05. Fundamental Changes
	40
	

	SECTION 6.06. Nature of Business
	40
	

	SECTION 6.07. Transactions with Affiliates
	40
	

	SECTION 6.08. Accounting Changes
	40
	

	SECTION 6.09. Restrictive Agreements
	40
	

	SECTION 6.10. Abandonment
	41
	

	SECTION 6.11. Preservation of Rights
	41
	

	 
	 

	ARTICLE VII Events of Default
	41
	

	 
	 

	ARTICLE VIII The Administrative Agent
	45
	

	 
	 

	ARTICLE IX Miscellaneous
	46
	

3

	
			
	 
	 

	SECTION 9.01. Notices
	46
	

	SECTION 9.02. Waivers; Amendments
	47
	

	SECTION 9.03. Expenses; Indemnity; Damage Waiver
	48
	

	SECTION 9.04. Successors and Assigns
	49
	

	SECTION 9.05. Survival
	51
	

	SECTION 9.06. Counterparts; Integration; Effectiveness
	51
	

	SECTION 9.07. Severability
	52
	

	SECTION 9.08. Right of Setoff
	52
	

	SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process
	52
	

	SECTION 9.10. WAIVER OF JURY TRIAL
	53
	

	SECTION 9.11. Headings
	53
	

	SECTION 9.12. Confidentiality
	53
	

	SECTION 9.13. Intentionally Omitted
	53
	

	SECTION 9.14. USA PATRIOT Act
	53
	

	SECTION 9.15. Interest Rate Limitation
	54
	

	SECTION 9.16. No Advisory or Fiduciary Responsibility
	54
	

	
	
	SCHEDULES:

	Schedule 1.01- List of Post Companies
Schedule 2.01-Lenders; Commitment

	Schedule 3.13 - Subsidiaries; Equity Interests

	Schedule 3.14 - Dividend Restrictions

	Schedule 6.01 - Liens

	Schedule 6.02 - Dispositions

	Schedule 6.04 - Investments

	Schedule 6.09 - Restrictive Agreements

	 

	EXHIBITS:

	Exhibit A - Form of Assignment and Assumption

	Exhibit B-1 - Form of Revolving Loan Note

	Exhibit B-2 - Form of Term Loan Note

	Exhibit C-1 - Form of U.S. Tax Certificate (Non-U.S. Lenders That Are Not Partnerships)

	Exhibit C-2 - Form of U.S. Tax Certificate (Non-U.S. Lenders That Are Partnerships)

	Exhibit C-3 - Form of U.S. Tax Certificate (Non-U.S. Participants That Are Not Partnerships)

	Exhibit C-4 - Form of U.S. Tax Certificate (Non-U.S. Participants That Are Partnerships)

	Exhibit D - List of Closing Documents 
Exhibit E - Material Contracts
Exhibit F - Statement of Cash Flows
Exhibit G - Statement of Accumulated Cash
Exhibit H - Wellington Lenders; Allocation of Fees

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LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of May 21, 2012 among DPM ACQUISITION, LLC, the LENDERS from time to time party hereto, GUGGENHEIM CORPORATE FUNDING, LLC, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions

SECTION1.01.Defined Terms.  As used in this Agreement, the following terms have the meanings specified below:
“Accumulated Restricted Cash” has the meaning assigned to such term in the Backstop Agreement.
“Administration Fee” means a fee of $40,000 per annum, payable quarterly in arrears.
“Administrative Agent” means Guggenheim Corporate Funding, LLC, in its capacity as administrative agent for the Lenders hereunder.
“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified, including, with respect to any Lender, any Approved Fund related to such Lender.
“Annual Projections” has the meaning assigned to such term in Section 5.01(e).
“Applicable Percentage” means, with respect to any Lender, (a) with respect to Revolving Loans, the percentage equal to a fraction the numerator of which is such Lender's Revolving Commitment and the denominator of which is the aggregate Revolving Commitments of all Revolving Lenders (or, if the Revolving Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Revolving Commitments most recently in effect, giving effect to any assignments); provided that in the case of Section 2.14 when a Defaulting Lender shall exist, any such Defaulting Lender's Revolving Commitment shall be disregarded in the calculation and (b) with respect to the Term Loans, a percentage equal to a fraction the numerator of which is such Lender's outstanding principal amount of the Term Loans and the denominator of which is the aggregate outstanding amount of the Term Loans of all Term Lenders; provided that in the case of Section 2.14 when a Defaulting Lender shall exist, any such Defaulting Lender's Term Loan Commitment shall be disregarded in the calculation.
“Applicable Rate” means 18%, of which (i) an amount equal to not less than 10% per annum shall be payable in cash at the time specified herein and (ii) the remaining accrued amount may be paid in cash or accrued and added to the principal amount of the applicable Loan.
“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“Asset Purchase Agreement” means that certain Asset Purchase Agreement dated as of October 24, 2011 (as amended, restated, supplemented or otherwise modified from time to time) among the Borrower and the “PMR Sellers” party thereto pursuant to which Borrower has agreed to acquire certain assets of the PMR Sellers pursuant to Section 363 of the Bankruptcy Code.

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“Assignment and Assumption” means an assignment and assumption agreement entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.
“Authorized Officer” means the chief executive officer, president, any Financial Officer or assistant treasurer or other similar officer of the Borrower.  

“Available Revolving Commitment” means, at any time with respect to any Lender, the Commitment of such Lender then in effect minus the Revolving Credit Exposure of such Lender at such time.
“Availability Period” means the period from and including the Effective Date to but excluding the earlier of the Revolving Maturity Date and the date of termination of the Revolving Commitments.
“Backstop Agreement” means that certain Portfolio 1 Backstop Agreement dated as of the date hereof by and among Borrower, Diamond Resorts Financial Services, Inc., RFA PMR Loanco, LLC and Resort Finance America, LLC.
“Backstop Collateral Account” has the meaning assigned to such term in the Backstop Agreement.
“Bankruptcy Event” means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment.
“Board” means the Board of Governors of the Federal Reserve System of the United States of America.
“Borrower” means DPM Acquisition, LLC, a Delaware limited liability company.
“Borrowing” means (a) Revolving Loans made, converted or continued on the same date or (b) a Term Loan made on the Effective Date.
“Borrowing Request” means a request by the Borrower for a Revolving Borrowing in accordance with Section 2.03.
“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City and Las Vegas, Nevada are authorized or required by law to remain closed.
“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“Change in Control” means the occurrence of any of the following events:
(i)any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules of the SEC thereunder, or any successor provisions of either of the foregoing), becomes the “beneficial owners” (as used in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person or group will be deemed to have “beneficial ownership” of all shares that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of a majority of the total voting power of the Voting Stock of the Borrower, whether as a result of the issuance of securities of the Borrower, any merger, consolidation, liquidation or dissolution of the Borrower or otherwise;

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(ii)the Disposition, directly or indirectly, of all or substantially all the assets of the Borrower and its Subsidiaries, considered as a whole (other than a Disposition of such assets as an entirety or virtually as an entirety to a wholly-owned Subsidiary) to any Person shall have occurred, or the Borrower merges, consolidates or amalgamates with or into any other person or any other Person merges, consolidates or amalgamates with or into the Borrower, in any such event pursuant to a transaction in which the outstanding Voting Stock of the Borrower is reclassified into or exchanged for cash, securities or other property, other than any such transaction where (a) the outstanding Voting Stock of the Borrower is reclassified into or exchanged for other Voting Stock of the Borrower or for Voting Stock of the surviving corporation and (b) the holders of the Voting Stock of the Borrower immediately prior to such transaction own, directly or indirectly, a majority of the Voting Stock of the Borrower or the surviving corporation immediately after such transaction;
(iii)the director or directors members of the Board of Directors of the Borrower are terminated and not replaced by a director or directors reasonably acceptable to the Administrative Agent within 30 days; or
(iv)the Borrower's shareholders shall have approved any plan of liquidation or dissolution of the Borrower.
“Change in Law” means (a) the adoption of any law, rule, regulation or treaty after the date of this Agreement, (b) any change in any law, rule, regulation or treaty or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender (or, for purposes of Section 2.10(b), by any lending office of such Lender or by such Lender's holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided however, that notwithstanding anything herein to the contrary,  the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith shall be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.
“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans or Term Loans.
“Club Commission Agreement” means that certain agreement between DRIC and the Borrower, governing the payment of Club Commissions, to be executed by the parties thereto and delivered to the Administrative Agent no later than ten (10) days after the date hereof.
“Club Commission(s)” means that certain quarterly commission payment in the amount of $18.75 made by DRIC, operating as The Club®; to the Borrower pursuant to the Club Commission Agreement, for each Club/PMR Active Owner, payable to Administrative Agent, for the benefit of each Lender, quarterly in arrears, provided that such Club/PMR Active Owner has made its required payments to The Club®. The Club Commission will be payable for each Club/PMR Active Owner who comes into The Club® as  a Club/PMR Active Owner (i)  that upgrades by purchasing a membership in The Club®, or (ii) who doesn't upgrade but joins The Club® with The Club® overlay.  The Club Commission will not be payable for any Club/PMR Active Owner who already is a member of The Club®.
“Club/PMR Active Owner” means, as of the Effective Date, an owner of a vacation ownership plan (whether denominated in points or weeks) in Monarch Grand Vacations resort locations, which owner is current in its payment of maintenance fees and any loans secured by its vacation ownership plan, and which vacation ownership plan has not been the subject of any recovery action.
“Code” means the Internal Revenue Code of 1986.
“Collateral” has the meaning set forth in Section 2.15(a).
“Commitment” means, with respect to each Lender, the sum of such Lender's Revolving Commitment and Term Loan Commitment.  The initial amount of each Lender's Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption or other documentation contemplated hereby pursuant to which such Lender shall have assumed its Commitment, as applicable.

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“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.
“Credit Exposure” means, as to any Lender at any time, the sum of (a) such Lender's Revolving Credit Exposure at such time, plus (b) an amount equal to the aggregate principal amount of its Term Loans outstanding at such time.
“Credit Party” means the Administrative Agent or any other Lender.
“Current Year” has the meaning assigned to such term in Section 5.01(e).
“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
“Defaulting Lender” means any Lender that (a) has failed, within two (2) Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans or (ii)  pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender's good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or any Credit Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender's good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three (3) Business Days after request by a Credit Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party's receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of a Bankruptcy Event.
“Deposit Loan” means collectively, (i) that certain loan made by Tempus Acquisition, LLC to Borrower on December 2, 2011, and (ii) that certain loan made by DRC to Borrower on December 20, 2011, to fund the “Deposit”, as set forth in the Asset Purchase Agreement.
“Disposition” or “Dispose” means the sale, assignment, transfer or other disposition (including any Sale and Leaseback Transaction and any termination of business lines) of any property by the Borrower or any of its Subsidiaries to any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith, or any sale, assignment or transfer of Equity Interests by such Person.
“Dollars” or “$” refers to lawful money of the United States of America.
“DPM Guaranty” means that certain secured Guaranty, dated as of May 21, 2012, provided by DPM Holdings, LLC for the benefit of the Administrative Agent in respect of the obligations arising under this Agreement and the other Loan Documents.
“DRC” means Diamond Resorts Corporation, a Maryland corporation.

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“DRIC” means Diamond Resorts International Club, Inc., a Florida corporation and operator of The Club®.
“Effective Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).
“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.
“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.
“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any of the foregoing.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
“ERISA Event” means (a) any reportable event, as defined in Section 4043 of ERISA, or the regulations issued thereunder, with respect to a Plan, that the Administrative Agent determines in good faith constitutes (i) grounds for the termination of any Plan by the PBGC or the appointment of a trustee to administer or liquidate any Plan, or (ii) a failure to make required minimum contributions (other than an event for which the 30-day notice period is waived) shall have occurred and be continuing; (b) the existence with respect to any Plan of an “unpaid minimum required contribution” which means, with respect to any plan year, any minimum required contribution under Section 430 of the Code for the plan year which is not paid on or before the due date (as determined under section 430(j)(1) of the Code) for the plan year; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal of the Borrower or any of its ERISA Affiliates from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition upon the Borrower or any of its ERISA Affiliates of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

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“Event of Default” has the meaning assigned to such term in Article VII.
“Excess Cash Flow” means, with respect to the Borrower as of the end of any calendar quarter, the amount of the Borrower's gross income for such calendar quarter over the Permitted Expenses of the Borrower for such calendar quarter, provided that all Excess Cash Flow for any calendar year just ended shall be adjusted or “trued up” (via an additional payment of Excess Cash Flow in the current calendar quarter or a credit to Excess Cash Flow payments due in the current calendar quarters or subsequent calendar quarters) based upon the audited annual financial statements submitted pursuant to Section 5.01(a), with such true-up to occur in the calendar quarter immediately following the date on which the aforesaid financial statements were required to be delivered hereunder.  Excess Cash Flow shall include all Club Commissions payable in any applicable calendar quarter.
“Excluded Collateral” means the collateral pledged by the Borrower to the lender pursuant to the RFA Facility (which, for avoidance of doubt, consists of defaulted receivables and a first-lien interest in the Restricted Cash Account).
“Excluded Taxes” means, with respect to any payment made by the Borrower under any Loan Document, any of the following Taxes imposed on or with respect to a Recipient:
(a)    income or franchise Taxes imposed on (or measured by) net income by the United States of America, or by the jurisdiction under the laws of which such Recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located,
(b)    any branch profits Taxes imposed by the United States of America or any similar Taxes imposed by any other jurisdiction in which the Borrower is located, and
(c)    in the case of a Non U.S. Lender (other than an assignee pursuant to a request by the Borrower under Section 2.13(b)), any U.S. Federal withholding Taxes resulting from any law in effect (including FATCA) on the date such Non U.S. Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Non U.S. Lender's failure to comply with Section 2.11(f), except to the extent that such Non U.S. Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding Taxes pursuant to Section 2.11(a).
“Exit Fee” means, with respect to the Term Loans, a fee equal to the product of (i) the applicable Exit Fee Percentage and (ii) the initial principal amount of the Term Loans.
“Exit Fee Percentage” means, with respect to the final payment in full of principal made in connection with the Term Loans, as applicable, a percentage determined in accordance with the following table based on when such final payment in full of such Term Loans are made:
	
		
	If such payment in full occurs prior to the indicated anniversary of the Closing Date:
	Exit Fee Percentage

	First
	2.5%

	Second
	5%

	Third
	7.5%

	Fourth or thereafter
	10%

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement, and any regulations or official interpretations thereof.
“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal 

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Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.
“Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.
“GAAP” means generally accepted accounting principles in the United States of America.
“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include (a) endorsements for collection or deposit in the ordinary course of business.
“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.
“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations of such Person as an account party in respect of letters of credit and letters of guaranty only to the extent any draws under such letters of credit or letters of guaranty shall not have been reimbursed, (j) all obligations, contingent or otherwise, of such Person in respect of bankers' acceptances and (k) all obligations of such Person under Sale and Leaseback Transactions.  The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by the Borrower under any Loan Document and (b) Other Taxes.
“Intercompany Loans” means loans, advances or other extensions of credit by the Borrower or 

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any Subsidiary of the Borrower, to the Borrower or any Subsidiary of the Borrower.
“Interest Payment Date” means the last Business Day of each fiscal quarter and the Revolving Maturity Date.
“Interval Purchase Price” means the “Diamond-Equivalent Point Price” as set forth in the Sales and Services Agreement.
“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests or debt or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of Indebtedness of, or purchase or other acquisition of any other debt or Equity Interest in, another Person, including any partnership or joint venture interest in such other Person or (c) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of such Person.  For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.
“IRS” means the United States Internal Revenue Service.
“Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall have become a Lender hereunder pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.
“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
“Loan Documents” means this Agreement, any promissory notes issued pursuant to Section 2.06(e) of this Agreement, the DPM Guaranty, each Pledge Agreement, each Warrant Agreement and all other agreements, instruments, documents and certificates identified in Section 4.01 executed and delivered to, or in favor of, the Administrative Agent or any Lender and including all other pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit agreements and all other written matter whether heretofore, now or hereafter executed by or on behalf of the Borrower, or any employee of the Borrower, and delivered to the Administrative Agent or any Lender in connection with this Agreement or the transactions contemplated hereby.  Any reference in this Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to this Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.
“Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement.
“Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations, condition (financial or otherwise) of the Borrower and the Subsidiaries taken as a whole, (b) the validity or enforceability of this Agreement or any and all other Loan Documents or the rights or remedies of the Administrative Agent and the Lenders thereunder, (c) the ability of the Borrower to perform any of its obligations under this Agreement or any Loan Document, or (d) the rights or remedies of the Administrative Agent and the Lenders under this Agreement or any Loan Document.
“Material Communications” means, with respect to any Contractual Obligation, any communication by the Borrower or any of its Subsidiaries with any Governmental Authority or any party to such Contractual Obligation regarding an event or circumstance that could reasonably be expected to result in a Material 

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Adverse Effect.
“Material Contract” means each contract listed as a Material Contract on Exhibit E.
“Material Indebtedness” means Indebtedness (other than the Loans) of the Borrower and its Subsidiaries, in an aggregate principal amount exceeding $250,000, including, without limitation the Indebtedness incurred under the RFA Facility.
“Material Notices” means, with respect to (a) any material Contractual Obligation, any notice sent or received by the Borrower or any of its Subsidiaries regarding a material event or circumstance, including the occurrence of any default under such Contractual Obligation or termination of such Contractual Obligation and (b) with respect to any Contractual Obligation, any other development that could reasonably be expected to result in a Material Adverse Effect.
“Monarch Grand Vacations” means that multi-site vacation ownership program established in 1998 by Pacific Monarch Resorts, Inc.
“Moody's” means Moody's Investors Service, Inc.
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“Net Disposition Proceeds” means, with respect to any Disposition permitted hereunder, the cash proceeds received in respect of such Disposition, net of reasonable expenses.
“Non-U.S. Lender” means a Lender that is not a U.S. Person.
“Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations and indebtedness (including interest and fees accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of the Borrower to any of the Lenders, the Administrative Agent or any indemnified party, individually or collectively, existing on the Effective Date or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under this Agreement or any of the other Loan Documents or in respect of any of the Loans made or reimbursement or other obligations incurred or other instruments at any time evidencing any thereof.
“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Taxes (other than a connection arising from such Recipient having executed, delivered, enforced, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, or engaged in any other transaction pursuant to, any Loan Document, or sold or assigned an interest in any Loan Document).
“Other Taxes” means any present or future stamp, court, documentary, intangible, recording, filing or similar excise or property Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, or from the registration, receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment under Section 2.13).
“Parent” means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a subsidiary.
“Participant” has the meaning assigned to such term in Section 9.04.
“Participant Register” has the meaning assigned to such term in Section 9.04(c).

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“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.
“Permitted Expenses” means, for any period, (i) the costs and expenses of the Borrower which are set forth in the consolidated detailed budget or, from and after the date of the initial delivery of Annual Projections hereunder, in the most recent Annual Projections submitted to the Administrative Agent pursuant to Section 5.01(e) in such amounts as may be approved by the Administrative Agent in its reasonable discretion on a quarterly basis upon review of the statements of cash flows in substantially the form attached hereto as Exhibit F delivered pursuant to Section 5.01(h)and (ii) any other costs and expenses incurred by the Borrower which are approved by the Administrative Agent from time to time in writing (which writing may be in an e-mail).  Permitted Expenses may include, but not be limited to, (a) amounts due to affiliates of the Borrower pursuant to the Sales and Services Agreement, sub-management and servicing fees, rental leasing fees, general and administrative allocations, etc., (b) cost of timeshare sales, (c) general and administrative costs, (d) inventory carry costs (i.e., maintenance fee expense), (e) inventory recovery costs (including purchase deposits/down payments required therefor) pursuant to the RFA Facility, (f) debt service to RFA (principal and interest, including minimum amortization payments), (g) backstop payments to RFA pursuant to the Backstop Agreement, (h) income and value-added taxes, (i) capital expenditures, (j) working capital requirements (such as utility deposits, prepaid assets, i.e., Disney tickets, prepaid insurance, etc.), (k) depreciation charges and amortization or other amortization expenses, (l) opening balance accrued liabilities assumed pursuant to the Asset Purchase Agreement, (m) cure costs on assumed contracts tied to opening balance sheet accruals, (n) repayment of the Deposit Loan on closing, (o) repayment of DRC and affiliates' fees at closing included on the closing statement, (p) closing costs, (q) development costs (i.e., the construction in process expenditures), and (r) expenses related to asset sales (i.e., Kona, Hawaii property).
“Permitted Investments” means:
(a)  direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;
(b)  investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, a minimum credit rating of A-2/P-2 or A-/A3 obtainable from S&P or from Moody's, respectively;
(c)  investments in certificates of deposit, banker's acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;
(d)  fully collateralized repurchase agreements with a term of not more than thirty (30) days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above; or
(e)  money market funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody's and (iii) have portfolio assets of at least $5,000,000,000.
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be 

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deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“Pledge Agreement” means that certain Pledge Agreement (as amended, restated, supplemented or otherwise modified) dated as of even date herewith made by DPM Holdings, LLC in favor of the Administrative Agent, providing for a pledge of 100% of the membership interests in the Borrower.
“Post Companies” means each of the companies listed on Schedule 1.01, collectively, and “Post Company” means any such company.
“Prior Year” has the meaning assigned to such term in Section 5.01(e).
“Receivables” shall mean all accounts receivable (including, without limitation, all rights to payment created by or arising from sales of goods, leases of goods or the rendition of services rendered no matter how evidenced whether or not earned by performance).
“Recipient” means, as applicable, (a) the Administrative Agent or (b) any Lender (and, in the case of a Lender that is classified as a partnership for U.S. Federal tax purposes, a Person treated as the beneficial owner thereof for U.S. Federal tax purposes).
“Register” has the meaning assigned to such term in Section 9.04.
“Regulatory Approval” means (a) any authorization, consent, approval, license, lease, ruling, permit, tariff, rate, certification, waiver, exemption, filing, variance, claim, order, judgment or decree of, by or with, (b) any required notice to, (c) any declaration of or with or (d) any registration by or with, any Governmental Authority.
“Related Parties” means, with respect to any specified Person, such Person's Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person's Affiliates.
“Required Lenders” means at any time, subject to Sections 2.14, Lenders having Credit Exposures and Available Revolving Commitments representing more than 50% of the sum of the total Credit Exposures and Available Revolving Commitments at such time.
“Restricted Cash Account” has the meaning assigned to such term in Section 5.16.
“Restricted Payment” means any payment to be made in respect of the costs and expenses incurred by the Borrower.
“Revolving Commitment” means, with respect to each Lender, the commitment, if any, to make Revolving Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lender's Revolving Credit Exposure hereunder, as such commitment may be (a) reduced or terminated from time to time pursuant to Section 2.05, and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04.  The initial aggregate amount of the Revolving Lenders' Revolving Commitments is $10,000,000.
“Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender's Revolving Loans at such time.
“Revolving Lender” means, as of any date of determination, each Lender that has a Revolving Commitment, or if the Revolving Commitments have terminated or expired, a Lender with Revolving Credit Exposure.
“Revolving Loan” means a Loan made pursuant to Section 2.01.
“Revolving Maturity Date” means May 21, 2016.

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“RFA Facility” means that certain defaulted loan receivables facility made by Resort Finance America, LLC to Borrower pursuant to that certain Inventory Loan and Security Agreement dated as of May 21, 2012, by and between RFA PMR Loanco, LLC and Borrower, as in effect on the Closing Date without giving effect to any subsequent amendment or modification of such facility, unless such amendment or modification is approved by the Administrative Agent in writing.
“S&P” means Standard & Poor's Ratings Services, a Standard & Poor's Financial Services LLC business.
“Sale and Leaseback Transaction” means any sale or other transfer of any property or asset by any Person with the intent to lease such property or asset as lessee.
“Sales and Services Agreement” means collectively, (i) that certain Sales and Services Agreement (United States) by and among Borrower, Diamond Resorts International Marketing, Inc., Diamond Resorts U.S. Collection Development, LLC and Diamond Resorts California Collection Development, LLC and (ii) that certain Sales and Services Agreement (Mexico) by and among Sales DPM S. de R.L. de C.V., DPM Acquisition Mexico S. de R.L. de C.V., DRIC and Borrower, each to be executed by the respective parties thereto and delivered to Administrative Agent no later than ten (10) days after the date hereof.
“SEC” means the United States Securities and Exchange Commission.
“Solvent” means, in reference to the Borrower, (a) the fair value of the assets of the Borrower, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (b) the present fair saleable value of the property of the Borrower will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (c) the Borrower will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (d) the Borrower will not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted after the Effective Date.  For purposes of this definition, each of the phrases “will not have unreasonably small capital” and “able to pay its debts and liabilities, subordinated, contingent or otherwise and other commitments as such debts and other liabilities become absolute and matured” means that such Person will be able to generate enough cash from operations, asset dispositions or refinancing, or a combination thereof, to meet its obligations as they become due.
“Subordinated Indebtedness” means any Indebtedness of the Borrower or any Subsidiary the payment of which is subordinated to payment of the obligations under the Loan Documents.
“Subordinated Indebtedness Documents” means any document, agreement or instrument evidencing any Subordinated Indebtedness or entered into in connection with any Subordinated Indebtedness.
“subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, Controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.
“Subsidiary” means each of DPM Acquisition Mexico S. de R.L. de C.V., Operating DPM S. de R.L. de C.V., Sales DPM S. de R.L. de C.V., DPM RP Subsidiary, LLC and DPM Loanco, LLC.

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“Taxes” or “Tax” means any present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term Lender” means, as of any date of determination, each Lender that has a Term Loan Commitment or that holds Term Loans.
“Term Loan Commitment” means (a) as to any Term Lender, the aggregate commitment of such Term Lender to make Term Loans as set forth on Schedule 2.01 or in the most recent Assignment Agreement or other documentation contemplated hereby executed by such Term Lender and (b) as to all Term Lenders, the aggregate commitment of all Term Lenders to make Term Loans, which aggregate commitment shall be $61,250,000 on the date of this Agreement.  After advancing the Term Loan, each reference to a Term Lender's Term Loan Commitment shall refer to that Term Lender's Applicable Percentage of the Term Loans.
“Term Loan Maturity Date” means May 21, 2016.
“Term Loans” means the term loans made by the Term Lenders to the Borrower pursuant to Section 2.01.
“The Club®” means DRC's points-based exchange and member services program established by DRIC that enables members to vacation at any of the resorts in the DRC network.
“Transactions” means the execution, delivery and performance by the Borrower of this Agreement and the other Loan Documents, the borrowing of Loans and other credit extensions, the use of the proceeds thereof.
“UCC” means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.
“U.S. Collection” means Diamond Resorts U.S. Collection, a Diamond Resorts points-based vacation ownership system, with resort locations in the United States and St. Maarten, Netherland Antilles.
“U.S. Person” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.
“U.S. Tax Certificate” has the meaning assigned to such term in Section 2.11(f)(ii)(D)(2).
“Unused Fee” shall mean, with respect to any Lender for any fiscal quarter, a fee payable to such Lender in an amount equal to the product of (a) 1.0% times (b) an amount equal to (i) such Lender's weighted average Revolving Commitment for such fiscal quarter minus (ii) the aggregate amount of such Lender's weighted average Revolving Credit Exposure for such fiscal quarter.
“Voting Stock” means, with respect to any Person, the Equity Interests of any class or classes of such Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for corporate directors (or persons performing similar functions) of such Person; provided, however, that Voting Stock shall not include any preferred class of Equity Interests of any person solely by reason of the right of such class to elect one or more members of the Board of Directors (or similar governing body) of such Person unless such class is generally entitled to vote on any matter submitted to the holders of common classes of Equity Interests.
“Warrant Agreement” means each of (i) that certain Warrant Agreement, dated as of May 21, 2012 by and between Diamond Resorts Parent, LLC  and Guggenheim Corporate Funding, LLC, and (ii) that certain Diamond Resorts Parent, LLC Warrant to Purchase Common Units, dated as of May 21, 2012, issued to Guggenheim Corporate Funding, LLC by Diamond Resorts Parent, LLC thereunder, each as amended, restated, supplemented or otherwise modified from time to time.
“Wellington Lenders” means each of the Lenders listed on Exhibit H, collectively, and “Wellington 

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Lender” shall mean any such Lender.
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
“Withholding Agent” means the Borrower and the Administrative Agent.
SECTION 1.02. Classification of Loans and Borrowings.  For purposes of this Agreement, Loans and Borrowings may be classified and referred to by Class (e.g., a “Revolving Loan”).

SECTION 1.03. Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  The word “law” shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected Persons customarily comply), and all judgments, orders and decrees, of all Governmental Authorities.  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein), (b) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (c) any reference herein to any Person shall be construed to include such Person's successors and assigns (subject to any restrictions on assignment set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, and (g) all actions by specified officers of a Person shall be deemed to be taken by such specified officer solely in such specified officer's capacity as such officer.

SECTION 1.04. Accounting Terms; GAAP.  Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose) (including, without limitation, any change in GAAP resulting in any operating lease being reclassified as a capital lease), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.  Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Accounting Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting Standards (“ASC”) 159) (or any other Accounting Standards 

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Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair value”, as defined therein and (ii) without giving effect to any treatment of Indebtedness in respect of convertible debt instruments under ASC 470-20-15 (previously referred to as Financial Accounting Standards Board Staff Position APB 14-1) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.
SECTION 1.05. Status of Obligations.  In the event that the Borrower shall at any time issue or have outstanding any Subordinated Indebtedness, the Borrower shall take all such actions as shall be necessary to cause the Obligations to constitute senior indebtedness (however denominated) in respect of such Subordinated Indebtedness and to enable the Administrative Agent and the Lenders to have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness.  Without limiting the foregoing, the Obligations are hereby designated as “senior indebtedness” and as “designated senior indebtedness” and words of similar import under and in respect of any indenture or other agreement or instrument under which such Subordinated Indebtedness is outstanding and are further given all such other designations as shall be required under the terms of any such Subordinated Indebtedness in order that the Lenders may have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness.

ARTICLE II

The Credits

SECION 2.01. Commitments.  Subject to the terms and conditions set forth herein, (a) each Revolving Lender agrees to make Revolving Loans to the Borrower in Dollars from time to time during the Availability Period in an aggregate principal amount that will not result in (i) the amount of such Lender's Revolving Credit Exposure exceeding such Lender's Revolving Commitment or (ii) the sum of the total Revolving Credit Exposures exceeding the aggregate Revolving Commitments, (b) each Term Lender with a Term Loan Commitment agrees to make a Term Loan to the Borrower in Dollars on the Effective Date, in an amount equal to such Lender's Term Loan Commitment by making immediately available funds available to the Borrower's designated account, not later than the time specified by the Administrative Agent.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.  Amounts repaid or prepaid in respect of Term Loans pursuant to Section 2.07 may not be reborrowed.
SECTION 2.02. Loans and Borrowings. (a) Each Loan shall be made as part of a Borrowing consisting of Loans of the same Class made by the Lenders ratably in accordance with their respective Commitments of the same Class.  The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender's failure to make Loans as required.  The Revolving Loans and the Term Loans shall be repaid as set forth in Section 2.06.
(a)  Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request or continue any Revolving Borrowing on or after the end of the Availability Period.
SECTION 2.03 Requests for Borrowings.  To request a Borrowing of Revolving Loans at any time following the Effective Date, the Borrower shall notify the Administrative Agent of such request by telephone not later than 11:00 a.m., New York City time, three (3) Business Days before the date of the proposed Borrowing.  Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the Borrower.  Each such telephonic and written Borrowing Request shall specify the following 

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information in compliance with Section 2.02:
(i)  the aggregate amount of the requested Borrowing, which shall be in an amount at least equal to $500,000 and an integral multiple of $100,000 thereafter;
(ii)  the date of such Borrowing, which shall be a Business Day; and
(iii)  the location and number of the Borrower's account to which funds are to be disbursed, which shall comply with the requirements of Section 2.04.
Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. Funding of Borrowings.  On the Effective Date, and, with respect to the Revolving Loans, on each date thereafter a Borrowing of a Revolving Loan is to be made in accordance with this Agreement, each Lender shall make each Loan to be made by it hereunder, ratably in accordance with its Commitment, on the proposed date thereof by wire transfer of immediately available funds by 12:00 noon, New York City time, to the account of the Borrower most recently designated by it for such purpose by notice to the Administrative Agent and each Lender in an amount equal to such Lender's Applicable Percentage; provided that Term Loans shall be made as provided in Sections 2.01(b).
SECTION 2.05. Termination and Reduction of Commitments.  Unless previously terminated, (i) the Term Loan Commitment shall terminate at 5:00 p.m. (New York City time) on the Effective Date and (ii) the Revolving Commitments shall terminate at 5:00 p.m. on the Business Day immediately preceding the Revolving Maturity Date.
SECTION 2.06. Repayment of Loans; Evidence of Debt.  (a) The Borrower hereby unconditionally promises to pay (i) to each Revolving Lender the then unpaid principal amount of each Revolving Loan maintained by such Lender on the Revolving Maturity Date and (ii) to each Term Lender, the then unpaid principal amount of each Term Loan maintained by such Lender on the Term Loan Maturity Date.
(b)  Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(c)  The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder and the Class thereof, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender's share thereof.
(d)  The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.
(e)  Any Lender may request that Loans made by it be evidenced by a promissory note in substantially the form of Exhibit B-1 with respect to such Lender's Revolving Loans and in substantially the form of Exhibit B-2 with respect to such Lender's Term Loans.  In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent.  Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.07. Prepayment of Loans. (a) The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with the provisions of this Section 2.07.  The Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy) of any prepayment hereunder not later than 11:00 a.m., New York City time, three (3) Business Days before the date of prepayment.  Each such notice shall be irrevocable 

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and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid.  Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof.  Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by (i) accrued interest to the extent required by Section 2.09 and (ii) the Exit Fee, if applicable.

(b) Within ten (10) days after the close of each calendar month, Borrower shall prepay the outstanding principal balance of the Term Loans in an aggregate amount equal to 40.0% of the aggregate amount of Interval Purchase Price received by Borrower and its Subsidiaries in the prior calendar month.

(c) In the event that the Borrower has any Excess Cash Flow as of the end of any calendar quarter, the Borrower shall, within sixty (60) days after the close of such calendar quarter, prepay the outstanding principal balance of the Term Loans in an aggregate amount equal to 100% of such Excess Cash Flow.

(d) Within ten (10) days after the close of each calendar month, Borrower shall prepay the outstanding principal balance of the Term Loans in an aggregate amount equal to 100.0% of the Net Disposition Proceeds received by Borrower in the prior calendar month in connection with any permitted asset or land sales.

(e) Within sixty (60) days after the close of each calendar quarter, Borrower shall prepay the outstanding principal balance of the Term Loans in an aggregate amount equal to the Club Commissions, which amount shall be paid as part of the Excess Cash Flow payment made pursuant to Section 2.07(c) above.

(f)Deliberately omitted.

(g) A minimum of $550,000 per month (payable on an annual basis) in principal reductions shall be paid for calendar year 2012, pro-rated from the Effective Date.  Commencing in 2013, a minimum of $8,410,631 in total aggregate annual principal reductions to the Term Loans shall be paid by Borrower each calendar year.  If the total aggregate annual principal reductions to the Term Loans do not equal to at least $550,000 per month for 2012 (prorated from the Effective Date), and $8,410,631 per year for each calendar year commencing in 2013, Borrower shall, within 30 days after the end of December 31st of each such year, make an additional principal payment equal to the difference between the required minimum annual principal reduction and the aggregate principal amounts actually paid by Borrower for such period (including, without limitation, all amounts paid pursuant to (a) through (e) above during the stated year). 

(h) If at any time the sum of the aggregate principal amount of all of the Revolving Credit Exposures exceeds the aggregate Revolving Commitment, the Borrower shall immediately repay Revolving Borrowings in an aggregate principal amount sufficient to cause the aggregate principal amount of all Revolving Credit Exposures to be less than or equal to the Revolving Commitment.”
SECTION 2.08. Fees.  (a) The Borrower agrees, on the Effective Date to pay to the Administrative Agent, for its own account, a closing fee equal to $1,867,718, and to pay to the Wellington Lenders, each for its own account, the closing fees described on Exhibit H.

(b) On each Interest Payment Date, the Borrower will pay, for the account of the Administrative Agent, the Administration Fee then accrued and unpaid.

(c) On each Interest Payment Date, the Borrower will pay, to the Administrative Agent, for the benefit of each Lender having a Commitment to make Revolving Loans, the Unused 

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Fee then accrued and unpaid.

(d) On the Term Loan Maturity Date, if not paid earlier in accordance herewith, the Borrower will pay to the Administrative Agent, for the benefit of each Lender then maintaining a Term Loan an amount equal to the Exit Fee applicable to the Term Loans.

(e) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent, for the benefit of the applicable Lender or at such Lender's direction.  Fees paid shall not be refundable under any circumstances.

(f) On each Interest Payment Date occurring more than 60 days after the Closing Date, if the reporting covenants set forth in Section 5.01 shall not have been satisfied on or prior to such Interest Payment Date, the Borrower will pay to the Administrative Agent, for the benefit of each Lender, a fee equal to $20,000.

SECTION 2.09. Interest. (a) The Loans shall bear interest at the Applicable Rate; of which (i) an amount equal to not less than 10% per annum shall be payable in cash on each Interest Payment Date and (ii) the remaining accrued amount may be paid in cash or accrued and added to the principal amount of the applicable Loan and paid as and when principal is due hereunder.

(b) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to 2% plus the Applicable Rate (payable in cash).

(c) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and, in the case of Revolving Loans, upon termination of the Revolving Commitments; provided that (i) interest accrued pursuant to paragraph (b) of this Section shall be payable on demand and (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of a Revolving Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment.

(d) All interest hereunder shall be computed on the basis of a year of 360 days, and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

SECTION 2.10. Increased Costs.  (a)  If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender; or

(ii) subject any Recipient to any Taxes on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto (other than (A) Indemnified Taxes, (B) Excluded Taxes and (C) Other Connection Taxes on gross or net income, profits, or revenue (including value-added or similar Taxes));

and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making or maintaining any Loan (or of maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by such Lender or such other Recipient hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

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(b) If any Lender determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender's capital or on the capital of such Lender's holding company, if any, as a consequence of this Agreement or the Loans made by such Lender to a level below that which such Lender or such Lender's holding company could have achieved but for such Change in Law (taking into consideration such Lender's policies and the policies of such Lender's holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender's holding company for any such reduction suffered.

(c) A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender, the amount shown as due on any such certificate within ten (10) days after receipt thereof.

(d) Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender's right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender's intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

SECTION 2.11. Taxes.  (a) Withholding of Taxes; Gross-Up.  Each payment by the Borrower under any Loan Document shall be made without withholding for any Taxes, unless such withholding is required by any law.  If any Withholding Agent determines, in its sole discretion exercised in good faith, that it is so required to withhold Taxes, then such Withholding Agent may so withhold and shall timely pay the full amount of withheld Taxes to the relevant Governmental Authority in accordance with applicable law.  If such Taxes are Indemnified Taxes, then the amount payable by the Borrower shall be increased as necessary so that, net of such withholding (including such withholding applicable to additional amounts payable under this Section), the applicable Recipient receives the amount it would have received had no such withholding been made.

(b)  Payment of Other Taxes by the Borrower.  The Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c) Evidence of Payments.  As soon as practicable after any payment of Indemnified Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(d) Indemnification by the Borrower.  The Borrower shall indemnify each Recipient for any Indemnified Taxes that are paid or payable by such Recipient in connection with any Loan Document (including amounts paid or payable under this Section 2.11(d)) and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  The indemnity under this Section 2.11(d) shall be paid within ten (10) days after the Recipient delivers to the Borrower a certificate stating the amount of any Indemnified Taxes so paid or payable by such Recipient and describing the basis of the indemnity claim.  Such certificate shall be conclusive of the amount so payable absent manifest error.  Such Recipient shall deliver a copy of such certificate to the Administrative Agent.

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(e) Indemnification by the Lenders.  Each Lender shall severally indemnify the Administrative Agent for any Taxes (but, in the case of any Indemnified Taxes, only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so) attributable to such Lender that are paid or payable by the Administrative Agent or the Borrower (as applicable) in connection with any Loan Document and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  The indemnity under this Section 2.11(e) shall be paid within ten (10) days after the Administrative Agent delivers to the applicable Lender a certificate stating the amount of Taxes so paid or payable by the Administrative Agent.  Such certificate shall be conclusive of the amount so paid or payable absent manifest error.

(f) Status of Lenders.  (i) Any Lender that is entitled to an exemption from, or reduction of, any applicable withholding Tax with respect to any payments under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by law or reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without, or at a reduced rate of, withholding.  In addition, any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to any withholding (including backup withholding) or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.11(f)(ii) (A) through (E) below) shall not be required if in the Lender's judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.  Upon the reasonable request of the Borrower or the Administrative Agent, any Lender shall update any form or certification previously delivered pursuant to this Section 2.11(f).  If any form or certification previously delivered pursuant to this Section expires or becomes obsolete or inaccurate in any respect with respect to a Lender, such Lender shall promptly (and in any event within ten (10) days after such expiration, obsolescence or inaccuracy) notify the Borrower and the Administrative Agent in writing of such expiration, obsolescence or inaccuracy and update the form or certification if it is legally eligible to do so.

(ii) Without limiting the generality of the foregoing, if the Borrower is a U.S. Person, any Lender with respect to the Borrower shall, if it is legally eligible to do so, deliver to the Borrower and the Administrative Agent (in such number of copies reasonably requested by the Borrower and the Administrative Agent) on or prior to the date on which such Lender becomes a party hereto, duly completed and executed copies of whichever of the following is applicable:
(A) in the case of a Lender that is a U.S. Person, IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding tax;
(B) in the case of a Non-U.S. Lender claiming the benefits of an income tax treaty to which the United States is a party (1) with respect to payments of interest under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “interest” article of such tax treaty and (2) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
(C) in the case of a Non-U.S. Lender for whom payments under any Loan Document constitute income that is effectively connected with such Lender's conduct of a trade or business in the United States, IRS Form W-8ECI;

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(D) in the case of a Non-U.S. Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code both (1) IRS Form W-8BEN and (2) a certificate substantially in the form of Exhibit C (a “U.S. Tax Certificate”) to the effect that such Lender is not (a) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (b) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, (c) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (d) conducting a trade or business in the United States with which the relevant interest payments are effectively connected;

(E) in the case of a Non-U.S. Lender that is not the beneficial owner of payments made under this Agreement (including a partnership or a participating Lender) (1) an IRS Form W-8IMY on behalf of itself and (2) the relevant forms prescribed in clauses (A), (B), (C), (D) and (F) of this paragraph (f)(ii) that would be required of each such beneficial owner or partner of such partnership if such beneficial owner or partner were a Lender; provided, however, that if the Lender is a partnership and one or more of its partners are claiming the exemption for portfolio interest under Section 881(c) of the Code, such Lender may provide a U.S. Tax Certificate on behalf of such partners; or

(F) any other form prescribed by law as a basis for claiming exemption from, or a reduction of, U.S. Federal withholding Tax together with such supplementary documentation necessary to enable the Borrower or the Administrative Agent to determine the amount of Tax (if any) required by law to be withheld.

(iii) If a payment made to a Lender under any Loan Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Withholding Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Withholding Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Withholding Agent as may be necessary for the Withholding Agent to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lender's obligations under FATCA and, as necessary, to determine the amount to deduct and withhold from such payment.  Solely for purposes of this Section 2.11(f)(iii), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(g) Treatment of Certain Refunds.  If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.11 (including additional amounts paid pursuant to this Section 2.11), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including any Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid to such indemnified party pursuant to the previous sentence (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event such indemnified party is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this Section 2.11(g), in no event will any indemnified party be required to pay any amount to any indemnifying party pursuant to this Section 2.11(g) if such payment would place such indemnified party in a less favorable position (on a net after-Tax basis) than such indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid.  This Section 2.11(g) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes which it deems confidential) to the indemnifying party or any other Person.

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SECTION 2.12. Payments Generally; Pro Rata Treatment; Sharing of Set-offs. 

(a)  The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or of amounts payable under Section 2.10 or 2.11, or otherwise) prior to 12:00 noon, New York City time on the date when due, in immediately available funds, without set-off or counterclaim.  Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Administrative Agent for the benefit of the Persons entitled thereto.  If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.  All payments hereunder shall be made in Dollars.
(b)  If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Revolving Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply).  The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.
(c)  All principal and interest payments shall be apportioned ratably among the Lenders (according to the unpaid principal balance of the Obligations to which such payments relate held by each Lender) and all payments of fees and expenses (other than fees or expenses that are for Agent's separate account) shall be apportioned ratably among the Lenders having a pro rata share of the type of Commitment or Obligation to which a particular fee or expense relates.  All payments to be made hereunder by Borrower shall be remitted to Agent and all such payments, and all proceeds of Collateral received by Agent, shall be applied to reduce the balance of the Revolving Loans outstanding, to make payments then due and payable with respect to the Term Loan and to pay all other amounts then due under this Agreement and the other Loan Documents, and thereafter, to Borrower or such other Person entitled thereto under applicable law.

SECTION 2.13. Mitigation Obligations. If any Lender requests compensation under Section 2.10, or the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.11, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.10 or 2.11, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

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SECTION 2.14. Defaulting Lenders.  Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then for so long as such Lender is a Defaulting Lender, the Available Revolving Commitment and Credit Exposure of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 9.02); provided, that this Section 2.14 shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of each Lender affected thereby.

SECTION 2.15. Grant of Security Interest; Collateral.  
(a) To secure the payment and performance of all Obligations owing to the Administrative Agent, the Revolving Lenders and the Term Lenders, ratably, the Borrower hereby grants to the Administrative Agent, for the benefit of itself and each Lender and Indemnitee, a continuing security interest in and Lien upon, and pledges to the Administrative Agent, all of its rights, title and interests in and to, all of the Borrower's interest in and to all of its now owned or hereafter acquired property and assets, including all accounts, general intangibles, goods, documents, securities, moneys, investment property, contract rights, chattel paper, instruments, deposit accounts, certificates of deposit, adjustments of deposits, letters of credit, letter of credit rights, advices of credit, commercial tort claims, oil, gas and minerals and other property and interests of the Borrower (whether real or personal and whether tangible or intangible now existing or hereafter acquired) and any and all additions and accessions thereto, and any and all replacements, products and proceeds (including insurance proceeds) thereof, other than the Excluded Collateral (the “Collateral”).

(b) The Borrower agrees that the Administrative Agent for the benefit of the applicable Lenders is authorized to file or record financing statements with respect to the Collateral in such form and in such offices as Lenders reasonably determine appropriate to further evidence the perfection of the security interests of Lenders under this Agreement and to use the collateral description “all assets of the Debtor” in any such financing statements.  The parties intend this Agreement to be a “security agreement” within the meaning of the applicable UCC.

(c) Borrower shall promptly notify the Administrative Agent for the benefit of the applicable Lenders of any commercial tort claims in which it has an interest arising after the date of this Agreement and shall provide all necessary information concerning each such Commercial Tort Claim, or upon any and all commercial tort claims upon request by the Administrative Agent for the benefit of the applicable Lenders, and make all necessary filings with respect thereto to perfect Lenders' security interest therein.

ARTICLE III

Representations and Warranties

The Borrower represents and warrants to the Lenders, on the Effective Day, each Interest Payment Date and each date on which a Borrowing occurs hereunder, that:
SECTION 3.01.Existence, Qualification and Power; Compliance with Laws.  The Borrower and each Subsidiary of the Borrower, (a) is a Person duly organized or formed, validly existing and in good standing or subsisting under the laws of the jurisdiction of its organization, (b) has all requisite power and authority to own or lease its material assets and carry on its business and execute, deliver and perform its obligations under the Loan Documents to which it is a party, (c) is duly qualified and in good standing under the laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business as now conducted requires such qualification, (d) is in compliance in all material respects with all laws, orders, writs, injunctions and orders and (e) has all requisite Regulatory Approvals to own its properties and operate its business as currently conducted, in the case of the foregoing clauses (c) through (e), except for such matters that could not reasonably be expected to result in a Material Adverse Effect.

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SECTION 3.02. Binding Effect. This Agreement and each other Loan Document has been duly executed and delivered by the Borrower.  This Agreement and each other Loan Document constitute the legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding of equity or at law.

SECTION 3.03. Authorization; No Contravention.  The execution, delivery and performance by the Borrower of this Agreement and each other Loan Document and the consummation of the transactions contemplated hereby and thereby, are within the Borrower's corporate power, have been duly authorized by all necessary corporate action, and do not and will not (a) contravene the terms of any of such the Borrower's charter, by-laws or other organizational documents, (b) conflict with or result in any breach or contravention of, or the creation of any Lien under (other than as permitted by Section 6.01), or require any payment to be made under (i) any Contractual Obligation to which the Borrower or any of its Subsidiaries is a party or affecting the Borrower or any of its Subsidiaries or the properties of the Borrower or any of its Subsidiaries or (ii) any material order, injunction, writ or decree of any Governmental Authority or any arbitral award to which the Borrower or any of its Subsidiaries or any of their property is subject or (c) violate any applicable law, in the case of the foregoing clause (c), except for such matters that could reasonably be expected to result in a Material Adverse Effect.

SECTION 3.04. Governmental Authorization; Other Consents.  There are no Regulatory Approvals and there is no approval, consent, exemption, authorization, or other action by, or notice to, or filing with any other Person that is necessary or required in connection with (a) the execution, delivery or performance by, or enforcement against, the Borrower of this Agreement or any other Loan Document and the consummation of the transactions contemplated hereby and thereby, or (b) the ability of the Borrower to operate its businesses as currently operated, except for the Regulatory Approvals and the other approvals, consents, exemptions, authorizations, actions, notices and filings which have been duly obtained, taken, given or made and are in full force and effect.
SECTION 3.05. Taxes.  The Borrower and each of its Subsidiaries has filed all tax returns and reports required to be filed, and have paid all material Taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those (a) which are not yet due and payable or (b) which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP, and, with respect to clause (b), have been disclosed to the Administrative Agent.

SECTION 3.06. No Default.  Neither the Borrower nor any Subsidiary is in default under or with respect to, any Contractual Obligation, except for any such default which could not reasonably be expected to result in a Material Adverse Effect.  No Default or Event of Default has occurred and is continuing.

SECTION 3.07. Financial Statements; No Material Adverse Effect. (a)  The financial statements, if any, furnished from time to time pursuant to Section 5.01 fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the dates thereof and their results of operations for the period covered thereby in accordance with GAAP, consistently applied throughout the periods covered thereby.  As of the date of such financial statements, (i) there has been no sale, transfer or other disposition by the Borrower or any of its Subsidiaries of any material part of the business or property of the Borrower and its Subsidiaries, taken as a whole, (ii) except for those transactions taking place on the Effective Date, there has been no purchase or other acquisition by the Borrower or any of its Subsidiaries of any business or 

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property (including any Equity Interests of any other Person) material in relation to the consolidated financial condition of the Borrower and its consolidated Subsidiaries (taken as a whole) and (iii) the Borrower and its Subsidiaries did not have any material contingent liabilities, material liabilities for Taxes, material and unusual forward or long-term commitments or material and unrealized or anticipated losses from any unfavorable commitments, except in the case of (i), (ii) or (iii), as referred to or reflected or provided for in such financial statements or as arising solely from the execution and delivery of the Loan Documents, in each case, which is not reflected in the foregoing financial statements or in the notes thereto or has not otherwise been disclosed in writing to the Lenders prior to the Effective Date.

(b) Since October 24, 2011, there has been no event or circumstance, either individually or in the aggregate, that has resulted in or could reasonably be expected to result in a Material Adverse Effect.

SECTION 3.08. Security Interest.  The provisions of this Agreement are effective to create in favor of the Administrative Agent, on behalf of the applicable Lenders a legal, valid and enforceable first-priority lien on all right, title and interest of Borrower in the Collateral.  Except for filings completed on or prior to the Effective Date and as contemplated hereby, no filing or other action will be necessary to perfect or protect such liens.

SECTION  3.09. Ownership of Assets.  The Borrower and each of its Subsidiaries owns and (to the extent applicable) has good and marketable title to its material properties and assets, in each case free and clear of all Liens other than Liens permitted pursuant to Section 6.01 and (b) the Borrower and each of its Subsidiaries has good and marketable title in fee simple to, or valid leasehold interests in, or easements or other limited property interests in, all material real property necessary in the ordinary conduct of its business, free and clear of all Liens except for Liens permitted pursuant to Section 6.01, and, in each case, subject to such exceptions, defects and qualifications as do not (i) affect the value of any such properties of the Borrower or such Subsidiary in any material respect or (ii) affect the use made or proposed to be made of such properties by the Borrower or such Subsidiary in any material respect.

SECTION 3.10. No Other Business.  Since the Effective Date, the Borrower has not engaged in any business and has not incurred any liabilities other than (a) directly relating to its direct or indirect ownership of the Subsidiaries and (b) as otherwise not prohibited under the Loan Documents.  From and after the Effective Date, none of the Borrower of any of its Subsidiaries have engaged in any business other than those carried on by the Borrower and its Subsidiaries as of the Effective Date.

SECTION 3.11. Insurance.  All insurance required to be obtained by the Borrower and the Subsidiaries of the Borrower pursuant to Section 5.08 has been obtained and is in full force and effect, and all premiums then due and payable on all such insurance have been paid.

SECTION 3.12. Disclosure.  No report, financial statement, certificate or other written information furnished by or on behalf of the Borrower or any of its Subsidiaries to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or any other Loan Document (as modified or supplemented by other information so furnished) when taken as a whole contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not materially misleading; provided that with respect to the Annual Projections and any other projected financial information, forecasts, estimates or forward looking information, the Borrower represents only that such information and materials have been prepared in good faith on the basis of the assumptions stated therein, which assumptions were believed to be reasonable at the time of preparation of such forecasts, and no 

29

representation or warranty is made as to the actual attainability of any such Annual Projections or forecasts.

SECTION 3.13. Subsidiaries; Equity Interests.  

(a) As of Effective Date, the Borrower has no other Subsidiaries other than those listed in Schedule 3.13; and at all relevant times, all of the outstanding Equity Interests owned by the Borrower in its Subsidiaries have been validly issued, are fully paid and nonassessable, and all Equity Interests owned by the Borrower in each of its Subsidiaries are owned free and clear of all Liens, except Liens permitted by Section 6.01.

(b) As of the Effective Date, Schedule 3.13 (i) sets forth the name and jurisdiction of each such Subsidiary and (ii) sets forth the ownership interest of the Borrower and any other Subsidiary in each such Subsidiary, including the percentage of such ownership.  The Borrower will provide the Administrative Agent such information regarding any additional Subsidiaries created or acquired following the Effective Date.

SECTION 3.14. No Dividend Restrictions.  Except as set forth in Schedule 3.14 or as restricted by applicable law, any Governmental Authority or this Agreement, there are no restrictions (contractual or regulatory) limiting the ability of the Subsidiaries of the Borrower from making distributions, dividends or other return on capital to the Borrower in an amount sufficient to satisfy the Obligations under the Loan Documents.

SECTION 3.15. Litigation.  There are no actions, suits, proceedings, disputes or known claims pending or, to the knowledge of the Borrower, threatened in writing or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any of its Subsidiaries or against any of their properties or revenues that either individually or in the aggregate, would be expected to result in a Material Adverse Effect.

SECTION 3.16. Solvency.  After giving effect to the transactions contemplated by the Loan Documents, the Borrower, on a consolidated basis with its Subsidiaries, is Solvent.

SECTION 3.17. Margin Regulations; Investment Company Act; USA PATRIOT Act.
(a) The Borrower is not engaged nor will it engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation T, U and X issued by the Board), or extending credit for the purpose of purchasing or carrying margin stock.

(b) None of the Borrower or any Subsidiary is or, after giving effect to the transactions contemplated hereby, will be an “investment company” as defined in and subject to regulation under the Investment Company Act of 1940.

(c) The making of the Loans and the use of the proceeds thereof shall not violate the Trading With the Enemy Act, as amended, or any of the foreign assets control regulations of the U.S. Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto and each of the Borrower and the Subsidiaries is in compliance with the U.S. Executive Order 13224 of September 24, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit or Support Terrorism (66 Fed. Reg. 49, 079 (2001) (the “Anti-Terrorism Order”) and the provisions of Public Law 107-56 (the “USA PATRIOT Act”).

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SECTION 3.18. ERISA Compliance.  (a) Except as could not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, each Plan is in compliance with the applicable provisions of ERISA, the Code and other Federal or state laws.

(b) No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.

SECTION 3.19. Environmental Compliance.  Except as disclosed in writing to the Administrative Agent, to the best of Borrower's knowledge:

(a) There are no claims, actions, suits, or proceedings in respect of or affecting the Borrower or any of its Subsidiaries (or any of their respective properties) alleging potential liability or responsibility for violation of, or otherwise relating to, any Environmental Law that could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(b) The properties owned, leased or operated by the Borrower or its Subsidiaries do not contain any Hazardous Materials in amounts or concentrations which (i) constitute, or constituted a violation of, (ii) require remedial action under, or (iii) could give rise to Environmental Liabilities, which violations, remedial actions and liabilities, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

(c) None of the Borrower or any of its Subsidiaries is undertaking, and has not completed, either individually or together with other potentially responsible parties, any investigation or assessment or remedial or response action relating to any actual or threatened release, discharge or disposal of Hazardous Materials at any site, location or operation, either voluntarily or pursuant to the order of any Governmental Authority or the requirements of any Environmental Law except for such investigation or assessment or remedial or response action that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(d) All Hazardous Materials generated, used, treated, handled or stored at, or transported to or from, any property currently or formerly owned or operated by the Borrower or any of its Subsidiaries have been disposed of in a manner not reasonably expected to result, individually or in the aggregate, in a Material Adverse Effect.

(e) Except as could not reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect, none of the Borrower or any of its Subsidiaries has contractually assumed any Environmental Liability.

ARTICLE IV

Conditions

SECTION 4.01. Effective Date.  The obligations of the Lenders to make Loans hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):

(a) The Administrative Agent (or its counsel) shall have received from each party hereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy or electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement.

(b) The Administrative Agent shall have received a favorable written opinions 

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(addressed to the Administrative Agent and the Lenders and dated the Effective Date) of Katten Muchin Rosenman LLC, counsel for the Borrower, in form and substance reasonably acceptable to the Administrative Agent, and covering such other matters relating to the Borrower, the Loan Documents or the Transactions as the Administrative Agent shall reasonably request.  The Borrower hereby requests such counsel to deliver such opinions.

(c) The Administrative Agent shall have received the schedule described in Section 5.01(d), in form and substance satisfactory to it.

(d) The Administrative Agent shall have received (i) such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of the Borrower, the authorization of the Transactions and any other legal matters relating to the Borrower, the Loan Documents or the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel and as further described in the list of closing documents attached as Exhibit D and (ii) to the extent requested by any of the Lenders, all documentation and other information required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act.

(e) The Administrative Agent shall have received a certificate, dated the Effective Date and signed by the President, a Vice President or a Financial Officer of the Borrower, confirming compliance with the conditions set forth in paragraphs (a) and (b) of Section 4.02.

(f) The Administrative Agent shall have received evidence satisfactory to it that any credit facility currently in effect for the Borrower shall have been terminated and cancelled and all indebtedness thereunder shall have been fully repaid (or shall be simultaneously repaid with the initial Loans) and any and all liens thereunder shall have been (or shall be simultaneously) terminated and released.
(g) The Administrative Agent shall have received evidence reasonably satisfactory to it that all governmental and third party approvals necessary or, in the discretion of the Administrative Agent, advisable in connection with the Transactions and the continuing operations of the Borrower and its Subsidiaries have been obtained and are in full force and effect.

(h) The Administrative Agent and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder.

The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding.
SECTION 4.02.  Each Borrowing.  The obligation of each Lender to make a Loan on the occasion of any Borrowing, is subject to the satisfaction of the following conditions:

(a) The representations and warranties of the Borrower set forth in this Agreement shall be true and correct on and as of the date of such Borrowing (or to the extent that such representations and warranties specifically refer to an earlier date, as of such earlier date).

(b) At the time of and immediately after giving effect to such Borrowing, no Default or Event of Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section.

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ARTICLE V

Affirmative CovenantsUntil the Revolving Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, the Borrower covenants and agrees with the Lenders that:

SECTION 5.01. Financial Statements.  The Borrower will deliver to the Administrative Agent and each Lender:

(a) as soon as available, but in any event within one hundred twenty (120) days after the end of each fiscal year of the Borrower, from and after the Effective Date, a consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, stockholders' equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by a report and opinion by BDO Seidman (or any other independent registered public accounting firm acceptable to the Administrative Agent in its reasonable discretion), which report and opinion shall be prepared in accordance with GAAP, shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit and shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of the Borrower and its consolidated Subsidiaries as at the end of, and for, such fiscal year in accordance with GAAP;

(b) as soon as available, but in any event within sixty (60) days after the end of each of the first three (3) fiscal quarters of each fiscal year of the Borrower, from and after the Effective Date, an unaudited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end of each such fiscal quarter, and the related (i) unaudited consolidated statements of income or operations and stockholders' equity for such fiscal quarter and for the portion of the fiscal year then ended and (ii) unaudited consolidated statements of cash flows for the portion of the fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail and certified by a Financial Officer of the Borrower as fairly presenting in all material respects the financial condition, results of operations, stockholders' equity and cash flows of the Borrower and its consolidated Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes;

(c) as soon as available, but in any event within forty-five (45) days after the end of each calendar month, the Borrower will provide to the Administrative Agent, a monthly financial statement, setting forth in comparative form the figures for the corresponding month of the previous fiscal year and the corresponding portion of the previous fiscal year;

(d) On or prior to the Closing Date, a schedule setting forth the projected business and operating expenses and working capital requirements of the Borrower and its Subsidiaries, accompanied by a certificate of a Financial Officer of the Borrower stating that such schedule has been prepared in good faith;

(e) as soon as available, and in any event no later than thirty (30) days after the end of each fiscal year of the Borrower (the “Prior Year”) from and after the Effective Date, a detailed consolidated budget by fiscal quarter for the current fiscal year (the “Current Year”) (which may be updated as required and including a summary of the material underlying assumptions applicable thereto) (collectively, the “Annual Projections”), which Annual Projections shall in each case be accompanied by (i) a certificate of a Financial Officer of the Borrower stating that such Annual 

33

Projections have been prepared in good faith and are based on estimates, information and assumptions believed to be reasonable at the time of preparation of the Annual Projections;

(f) within three (3) Business Days following the reasonable request of the Administrative Agent, and in any event on the last Business Day of each calendar month, a report summarizing such individual resort performance metrics (initially, this report shall include the “Daily Sales Tracker” information) as may from time to time be agreed upon by the Borrower and the Administrative Agent;

(g) promptly after the same becomes publicly available, copies, if any, of all registration statements, regular periodic reports and press releases filed by the Borrower or any Subsidiary with the SEC, or any Governmental Authority succeeding to any or all of the functions of the SEC, or with any national securities exchange;

(h) as soon as available, but in any event within forty-five (45) days after the end of each calendar month, the Borrower will provide to the Administrative Agent, a statement of cash flows in substantially the form attached hereto as Exhibit F;

(i) as soon as available, but in any event within forty-five (45) Business Days after the end of each calendar month, the Borrower will provide to the Administrative Agent, a report on the status of the Backstop Collateral Account and the Accumulated Restricted Cash held on account therein in substantially the form attached hereto as Exhibit G;

(j) such other information regarding the Borrower and its Subsidiaries as the Administrative Agent or any Lender may reasonably request for the Administrative Agent or such Lender to carry out and be satisfied with the “know your customer” and anti-money laundering rules and regulations, including, without limitation, the USA PATRIOT Act or other checks required to be carried out by local regulatory authorities; and

(k) such other information regarding the Borrower and its Subsidiaries as the Administrative Agent may reasonably request.

SECTION 5.02. Compliance Certificate.  The Borrower will deliver to the Administrative Agent and each Lender, concurrently with any delivery of financial statements under Section 5.01(a) or Section 5.01(b), a certificate of a Financial Officer of the Borrower (i) certifying as to whether a Default or Event of Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, and (ii) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 5.01(a), and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate.

SECTION 5.05. Notices.  Promptly, but in any event within five (5) Business Days, after an Authorized Officer of the Borrower has obtained knowledge thereof, the Borrower shall notify or deliver to (unless prohibited by applicable law in the case of clauses (a) through (d)) the Administrative Agent and each Lender:

(a) copies of any written notice received by the Borrower regarding any actual or threatened dispute, litigation, investigation, proceeding or suspension with respect to the Borrower or any of its Subsidiaries by or before any court or any Governmental Authority which could reasonably be expected to result in a Material Adverse Effect;

(b) copies of all Material Notices and Material Communications received by the Borrower or any of its Subsidiaries in connection with any Contractual Obligation;

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(c) details of any proposed transfer of any Equity Interests of the  Borrower or any of its Subsidiaries (excluding transfers of Equity Interests of any wholly-owned Subsidiary of the Borrower transferred to the Borrower or to another wholly-owned Subsidiary of the Borrower);

(d)  details of any other events or circumstances that results in or could reasonably be expected to result in a Material Adverse Effect; and

(e)  of any Default or Event of Default.

Each notice pursuant to this Section shall be accompanied by a written statement of a Financial Officer of the Borrower (x) that such notice is being delivered pursuant to Section 5.03 and (y) setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto.
SECTION 5.04. Compliance with Laws.

(a) The Borrower will, and will cause each of its Subsidiaries to, comply with all applicable laws, including, without limitation, ERISA and all other employee benefit laws and shall from time to time obtain and renew, and shall comply with, each Regulatory Approval as is or in the future shall be necessary for the operation of its business under applicable Laws (except any such applicable laws and Regulatory Approvals the non-compliance with which could not reasonably be expected to result in a Material Adverse Effect).

(b) The Borrower and each Subsidiary of the Borrower shall not petition, request or take any legal or administrative action that seeks to amend, supplement or modify any Regulatory Approval in any material respect unless such amendment, supplement or modification could not reasonably be expected to result in a Material Adverse Effect.  The Borrower shall promptly upon receipt by it or any of its Subsidiaries or upon publication furnish to the Administrative Agent and each Lender a copy (certified by an Authorized Officer of the Borrower) of each amendment, supplement or modification to any such Regulatory Approval.

SECTION 5.05. Preservation of Existence, Etc.  The Borrower will, and will cause each of its Subsidiaries to:

(a) preserve, renew and maintain in full force and effect its legal existence under the laws of the jurisdiction of its organization; and

(b) take all reasonable action to maintain all rights, privileges (including its good standing), permits, licenses and franchises necessary or desirable in the normal conduct of its business, except such rights, privileges, permits, licenses or franchise which, if not maintained, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.06. Compliance with Environmental Laws.  The Borrower will, and will cause each of its Subsidiaries to, except to the extent that the failure to do so could not reasonably be expected to result in, individually or in the aggregate, a Material Adverse Effect, (a) comply, and take all reasonable actions to cause all lessees and other Persons operating or occupying its properties to comply with all applicable Environmental Laws and Environmental Permits, (b) obtain and renew all Environmental Permits necessary for its operations and properties; and (c) in each case to the extent required by Environmental Laws, conduct any investigation, study, sampling and testing, and undertake any cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Materials from any of its properties, in accordance with the requirements of all Environmental Laws.

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SECTION 5.07. Maintenance of Properties; Ownership of Subsidiaries.

(a) Except to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect, the Borrower will, and will cause its Subsidiaries to, (i) maintain, preserve and protect all of its properties and equipment material in the operation of its business in good working order, repair and condition, ordinary wear and tear excepted and casualty or condemnation excepted and all in accordance with established practices of the Borrower, and (ii) make all necessary renewals, replacements, modifications, improvements, upgrades, extensions and additions thereof or thereto in accordance with prudent industry practice, and

(b) Subject to Section 6.02, the Borrower shall at all times from and after the Effective Date own, directly or indirectly, 100% of the Equity Interests of the Subsidiaries.

SECTION 5.08. Maintenance of Insurance.  The Borrower will, and will cause each of its Subsidiaries to, maintain with financially sound and reputable insurance companies insurance in such amounts and against such risks as are usually carried by companies engaged in similar business and as are consistent with the prudent operation of its business.

SECTION 5.09. Use of Proceeds.  The Borrower will use the proceeds of the Loans (a) with respect to the Term Loans and the initial Revolving Borrowing, for the acquisition of substantially all of the assets of Pacific Monarch Resorts pursuant to the Asset Purchase Agreement; and (b) with respect to any other Revolving Borrowings, to make intercompany loans to finance working capital needs of the Borrower and its Subsidiaries constituting Permitted Expenses.

SECTION 5.10. Payment of Obligations.  The Borrower will, and will cause each of its Subsidiaries to, pay, discharge or otherwise satisfy as the same shall become due and payable, all its obligations and liabilities in respect of Taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property, except to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.11. Cooperation.  The Borrower will perform such acts as are reasonably requested by the Administrative Agent to carry out the intent of, and transactions contemplated by, this Agreement and the other Loan Documents.

SECTION 5.12. Books and Records.  The Borrower will, and will cause each of its Subsidiaries to, maintain proper books of record and account, in which entries that are full, true and correct in all material respects and are in conformity with GAAP consistently applied shall be made of all material transactions and matters involving the assets and business of the Borrower or such Subsidiary, as the case may be.

SECTION 5.13. Loan Documents; Material Documents.  The Borrower will, and will cause its Subsidiaries to:

(a) Perform and observe all of its covenants and obligations pursuant to any Contractual Obligation to which it is a party or pursuant to which it has any obligations, except to the extent that the failure to so perform or observe could not reasonably be expected to result in a Material Adverse Effect;

(b)Take all reasonable and necessary action to prevent the termination or cancellation of any Loan Document or other Contractual Obligation in accordance with the terms of such Loan Document or other Contractual Obligation or otherwise (except for the expiration of any Loan Document or other Contractual Obligation in accordance with its terms and not as a result 

36

of a breach or default thereunder), except to the extent, in the case of any Contractual Obligation, that the failure to take such action could not reasonably be expected to result in a Material Adverse Effect; and

(c) enforce against the relevant party to such Loan Document or other Contractual Obligation such covenants of such Loan Document or other Contractual Obligation in accordance with its terms, except, in the case of any Contractual Obligation, to the extent that the failure to so enforce could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.14. Inspection Rights.  At any reasonable time and from time to time upon reasonable notice, the Borrower will, at its own expense, permit or arrange for the Administrative Agent (together with, from and after the occurrence and during the continuation of an Event of Default, any Lender who wishes to participate) and their respective agents and representatives to examine and make copies of and abstracts from the records and books of account of, and the properties of, the Borrower and each of its Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower and its Subsidiaries with the Borrower and its Subsidiaries and their respective officers, directors and accountants.

SECTION 5.15. Reports Accurate.  All Projections (if prepared by the Borrower, or to the extent that information contained therein is supplied by the Borrower), information, exhibits, financial statements, documents, books, records or reports furnished or to be furnished by the Borrower to the Administrative Agent or a Lender in connection with this Agreement are true, complete and accurate in all material respects.

SECTION 5.15. Restricted Cash Account.

(a) On or prior to the Closing Date, the Borrower shall establish and maintain a segregated deposit account (the “Restricted Cash Account”) for the benefit of the lenders under the RFA Facility. The Restricted Cash Account shall at all times be under the “control” (as defined in the UCC) of the agent or lender under the RFA Facility. 

(b) On the earliest of (i) the date on which all principal and interest in respect of the RFA Facility shall have been repaid and the RFA Facility terminated, or (ii) the date on which the lenders under the RFA Facility otherwise release their lien on the Restricted Cash Account, any remaining funds in the Restricted Cash Account shall be applied by the Borrower first, in repayment of the Term Loans, second, in repayment of the Revolving Loans, third, to any other obligations outstanding hereunder and fourth, shall be returned to the Borrower.

SECTION 5.15. Deferral of Expenses.

The Borrower and the other parties hereto agree and acknowledge that the Permitted Expenses shall be paid in cash except for (i) the sub-management fee payable to the Post Companies, which shall be offset against what Borrower would otherwise pay the Post Companies in respect of the Building G unit and the Building A option; provided, that that Borrower is obligated to pay any resultant tax in cash if requested by the Post Companies; (ii) the rental leasing fee of 30% payable to Diamond Resorts Management, Inc., an Arizona corporation, of which 20% shall be paid in cash (2/3rds) and 10% (1/3rd) shall be deferred until such time as the Lender hereunder shall be paid in full; (iii) income taxes to the extent not paid in cash; Borrower anticipates entering into a tax sharing agreement in which Borrower's income will be offset against Diamond Resort Parent, LLC's loss carryforwards; (iv) depreciation and amortization costs, which shall be non-cash; (v) $15,000 of executive management costs per month (included in the general and administrative allocation from DRC) shall be deferred until such time as the Lender hereunder is paid in full and (vi) 100% of the resort management fee payment payable to DRC in respect of each resort shall be accrued for and deferred until such time as the Lender hereunder is paid in full.

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ARTICLE VI

           Negative Covenants

Until the Revolving Commitments have expired or terminated and the principal of and interest on each Loan and all fees  payable hereunder have been paid in full, the Borrower covenants and agrees with the Lenders that:
SECTION 6.01. Liens.  The Borrower will not, and will not permit any Subsidiary to create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following:

(a) Liens pursuant to any Loan Document;

(b) Liens on the Borrower's property or other assets existing on the Effective Date and listed on Schedule 6.01 and any extension, renewal or replacement of the obligations secured thereby, but only to the extent such extension, renewal or replacement does not increase the outstanding principal amount thereof;

(c) Liens for Taxes, assessments or governmental charges which are not yet due and payable or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

(d) statutory Liens of landlords, carriers, warehousemen, mechanics, materialmen, repairmen, construction contractors or other like Liens arising in the ordinary course of business which secure amounts not yet due and payable or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

(e) pledges or deposits in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security legislation;

(f) easements, rights-of-way, restrictions, encroachments, protrusions and other similar encumbrances and minor title defects affecting real property which, in the aggregate, do not in any case materially interfere with the ordinary conduct of the business of the Borrower or any of its Subsidiaries;

(g) Liens arising in the ordinary course of business from netting services, overdraft protection and otherwise in connection with deposit, securities and commodities accounts;

(h) Liens securing judgments that do not involve any risk of forfeiture of any assets of any of the Subsidiaries or any Loan Document that do not exceed $50,000 in the aggregate and that within ten (10) days are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP for the payment of money not constituting an Event of Default under Article VII(g) or (h);

(i) Liens for purchase money security interests which are secured solely by the assets acquired, up to $50,000 at any time outstanding;

(j) zoning, building and other generally applicable land use restrictions, which, in the aggregate, do not in any case materially interfere with the ordinary conduct of the business of 

38

the Borrower or any of its Subsidiaries;
(k) Liens that have been placed by a third party on the fee title of leased real property or property over which the Borrower or any of its Subsidiaries has easement rights, and subordination or similar agreements relating thereto;

(l) Liens on Excluded Collateral securing Indebtedness incurred pursuant to the RFA Facility;

(m) assessment liens imposed  from time to time by any homeowner's association relating to recaptured/recovered inventory; and

(n) Liens securing Indebtedness or other obligations in an aggregate amount not exceeding $25,000 at any time outstanding.

SECTION 6.02. Dispositions.  The Borrower will not, and will not permit any Subsidiary to, make any Disposition or enter into any agreement to make any Disposition, except:

(a) Dispositions in the ordinary course of business (including Dispositions of obsolete or worn-out property or non-core real estate no longer required or useful in the business or operations of the Borrower or any of its Subsidiaries);

(b) Dispositions of assets and businesses set forth on Schedule 6.02;

(c) Dispositions of Permitted Investments; and

(d) other Dispositions, in one transaction or a series of related transactions, with the approval of the Administrative Agent.

SECTION 6.03. Restricted Payments.  The Borrower may not, and will not permit any Subsidiary to, declare or pay or make, directly or indirectly, any Restricted Payment; except for the payment of: 

(a) Permitted Expenses;

(b) Construction expenses (whether paid in cash or through cap ex accrual) in an amount not to exceed $2,600,000 which shall be utilized for (i) completion of construction and fixturing of Building F in Cabo Azul and (ii) security and maintenance costs for the Kona, Hawaii property; without the consent of the Administrative Agent; and

(c) other Restricted Payments with the consent of the Administrative Agent.

SECTION 6.04. Investments.  The Borrower will not and will not permit any of its Subsidiaries to, make or hold any Investments, except:

(a) Permitted Investments;

(b) Intercompany Loans existing on the Closing Date;

(c) Investments in Equity Interests of the Borrower's Subsidiaries, which Subsidiaries (i) are in existence on the date hereof or (ii) with the consent of the Administrative Agent, are wholly-owned Subsidiaries formed after the Effective Date;

(d) Investments received in connection with the bankruptcy or reorganization of, 

39

or settlement of delinquent accounts and disputes with, customers and supplies, in each case in the ordinary course of business;

(e) extensions of trade credit in the ordinary course of business;

(f) Investments existing on the date hereof and identified on Schedule 6.04; and

(g) in addition to Investments permitted by clauses (a) through (f) above, additional Investments with the consent of the Administrative Agent.

SECTION 6.05. Fundamental Changes.  The Borrower will not, without the consent of the Administrative Agent, merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person.

SECTION 6.06. Nature of Business.  The Borrower will not, and will not permit its Subsidiaries to:

(a) engage in any line of business substantially different from those lines of business conducted by the Borrower and its Subsidiaries on the Effective Date or any business reasonably related or ancillary thereto; 

(b) in the case of the Borrower, from and after the Effective Date, conduct, transact or otherwise engage in any business or operations other than those reasonably related to (i) its ownership of the Equity Interests of the Subsidiaries, (ii) the maintenance of its legal existence, (iii) the performance of this Agreement and the other Loan Documents, and (iv) any transaction that the Borrower is not prohibited from undertaking this Agreement; or 

(c) terminate or amend, waive, modify or supplement any of the provisions of its charter, by-laws or other organizational documents or consent to any such termination, amendment, waiver, modification or supplement, unless any of the foregoing actions could not reasonably be expected to result in a Material Adverse Effect.

SECTION 6.07. Transactions with Affiliates.  The Borrower will not, without the consent of the Administrative Agent, enter into any transaction of any kind with any Affiliate, whether or not in the ordinary course of business, other than (i) on terms substantially as favorable to the Borrower as would be obtainable by the Borrower at the time in a comparable arm's-length transaction with a Person other than an Affiliate and (ii) as approved or required by any Governmental Authority or as required by applicable law.

SECTION 6.08. Accounting Changes.  The Borrower will not make any change in its fiscal year except to the extent required by applicable law and/or GAAP.  In such event, the Borrower may, upon written notice to the Administrative Agent, change its fiscal year to any other fiscal year reasonably acceptable to the Administrative Agent, in which case, the Borrower and the Administrative Agent will, and are hereby authorized by the Lenders to, make any adjustments to this Agreement that are necessary to reflect such change in fiscal year arising as a result of such change in applicable law.

SECTION 6.09. Restrictive Agreements.  The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into, or incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of its material property or assets (except as permitted under Section 6.01), or (b) the ability of any wholly-owned 

40

Subsidiary to pay dividends or other distributions with respect to, or to return capital in respect of its common equity interests or to make or repay loans or advances to the Borrower or any other Subsidiary; provided that the foregoing shall not apply to (i) prohibitions, restrictions and conditions imposed by applicable law, any Governmental Authority or this Agreement, or (ii) prohibitions, restrictions or conditions identified on Schedule 6.08.

SECTION 6.10. Abandonment.  The Borrower will not, and will not permit any Subsidiary to, without the consent of the Administrative Agent, abandon any of its businesses.

SECTION 6.11. Preservation of Rights.  The Borrower will not, and will not permit any Subsidiary to, without the consent of the Administrative Agent, assign, cancel, terminate, waive any material default under, material breach of or material right under, or materially amend, supplement or modify or give any material consent under (including any consent or assignment of), any Loan Document or Contractual Obligation.

ARTICLE VII

Events of Default

If any of the following events (“Events of Default”) shall occur:
(a) the Borrower shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

(b) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three (3) Business Days;

(c) any representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary in or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any other Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made;

(d) the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.03, 5.05 or 5.09 or in Article VI;

(e) the Borrower shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clause (a), (b) or (d) of this Article) or any other Loan Document, and such failure shall continue unremedied for a period of sixty (60) days after the earlier of (i) the Borrower obtaining knowledge thereof and (b) notice thereof from the Administrative Agent to the Borrower (which notice will be given at the request of any Lender);

(f)  the Borrower or any Subsidiary shall fail to make any payment (whether of principal or interest) in respect of any Material Indebtedness, when and as the same shall become due and payable, and the effect of such failure is to cause a Material Adverse Effect;

(g)  (i) any event or condition occurs that results in any Material Indebtedness (other than the Indebtedness incurred in connection with the RFA Facility) becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of 

41

time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity, and the effect of such event or condition is to cause a Material Adverse Effect or (ii) any event or condition occurs that results in the Material Indebtedness incurred in connection with the RFA Facility becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of such Material Indebtedness or any trustee or agent on its or their behalf to cause such Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the permitted voluntary sale or transfer of the property or assets securing such Indebtedness;

(h)  an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any Subsidiary or its debts, or of a substantial part of its assets, under any  Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered;

(i)  the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

(j)  the Borrower or any Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as they become due or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of the Borrower and its Subsidiaries, taken as a whole, and is not released, vacated or fully bonded within sixty (60) days after its issue or levy;

(k)  one or more judgments for the payment of money in an aggregate amount in excess of $250,000 shall be rendered against the Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of sixty (60) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any Subsidiary to enforce any such judgment;
(l)  this Agreement, for any reason, ceases to create a valid and perfected first priority lien on or in the Collateral or other collateral relating thereto as described in the Loan Documents, or Borrower so states in writing;

(m)  a Change in Control shall occur;

(n)  the occurrence of any “default”, as defined in any Loan Document (other than this Agreement) or the breach of any of the terms or provisions of any Loan Document (other than this Agreement), which default or breach continues beyond any period of grace therein provided; or

42

(o)  any material provision of any Loan Document for any reason ceases to be valid, binding and enforceable in accordance with its terms (or the Borrower or any Subsidiary shall challenge the enforceability of any Loan Document or shall assert in writing, or engage in any action or inaction based on any such assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms);

(p)  at any time, any financial statements to be delivered pursuant to Section 5.01 shall be qualified by the auditors and such qualification could reasonably be expected to result in a Material Adverse Effect;

(q)  an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect; or

(r)  the termination, transfer, revocation or modification of any Material Contract or leases to which the Borrower or any Subsidiary is a party, the result of which could reasonably be expected to result in a Material Adverse Effect and such termination, transfer, revocation or modification remains in effect for a period of more than forty-five (45) days after the occurrence thereof.

then, and in every such event (other than an event with respect to the Borrower described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times:  (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other Obligations of the Borrower accrued hereunder and under the other Loan Documents, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other Obligations accrued hereunder and under the other Loan Documents, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.  Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may, and at the request of the Required Lenders shall, protect and enforce its rights and remedies under the Loan Documents and foreclose or otherwise realize upon its security for the performance of the obligations arising under the Loan Documents, or exercise any other rights and remedies available to it at law, in equity or by statute.
The Administrative Agent, on behalf of itself and the Lenders, shall have all of the rights and remedies of a secured party under the Uniform Commercial Code of the State of New York and all other rights and remedies accorded to a secured party at equity or law.  The Borrower, for itself and for all who may claim through or under them, hereby expressly waives and releases all right to have the Collateral, or any part of the Collateral, marshaled on any foreclosure, sale or other enforcement of the Administrative Agent's rights and remedies.
In addition to the acceleration provisions set forth above, upon the occurrence and continuation of an Event of Default, the Administrative Agent shall have the right to exercise any and all rights, options and remedies provided for in the Loan Documents, under the UCC, the Bankruptcy Code or at law or in equity, including, without limitation, the right to (i) apply any property of Borrower held by the Administrative Agent or the Lenders to reduce the Obligations, (ii) foreclose the Liens created hereunder, (iii) realize upon, take possession of and/or sell any Collateral or securities pledged with or without judicial process, (iv) exercise all rights and powers with respect to the Collateral as Borrower might exercise, (v) collect and send notices regarding the Collateral, with or without judicial process, (vi) by its own means or with judicial assistance, enter any premises at which Collateral and/or pledged securities 

43

are located, or render any of the foregoing unusable or dispose of the Collateral and/or pledged securities on such premises without any liability for rent, storage, utilities, or other sums, and Borrower shall not resist or interfere with such action, (vii) at Borrower's expense, require that all or any part of the Collateral be assembled and made available to the Administrative Agent at any place designated by the Administrative Agent, (viii) relinquish or abandon any Collateral or securities pledged or any Lien thereon.  Notwithstanding any provision of any Loan Document, the Administrative Agent, in its sole discretion, shall have the right, at any time that Borrower fails to do so, and from time to time, without prior notice, to: (i) obtain insurance covering any of the Collateral to the extent required hereunder; (ii) pay for the performance of any of Obligations; (iii) discharge taxes or Liens on any of the Collateral that are in violation of any Loan Document unless Borrower is in good faith with due diligence by appropriate proceedings contesting those items; and (iv) pay for the maintenance and preservation of the Collateral.  Such expenses and advances shall be added to the Obligations until reimbursed to the Administrative Agent or the Lenders, as applicable, and shall be secured by the Collateral, and such payments by the Administrative Agent shall not be construed as a waiver by the Lenders of any Event of Default or any other rights or remedies of Lenders.
Borrower hereby grants to Lenders, after the occurrence and during the continuance of an Event of Default, an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to Borrower) to use, assign, license or sublicense any Intellectual Property now owned or hereafter acquired by Borrower, and wherever the same may be located, including in such license reasonable access as to all media in which any of the licensed items may be recorded or stored and to all computer programs and used for the compilation or printout thereof, in each case in connection with the exercise of the Administrative Agent's or the Lenders' remedies hereunder and under the other Loan Documents.
The Administrative Agent is hereby irrevocably made, constituted and appointed the true and lawful attorney for Borrower with full power of substitution to do the following from and after the occurrence and during the continuance of an Event of Default: (i) endorse the name of any such Person upon any and all checks, drafts, money orders, and other instruments for the payment of money that are payable to such Person and constitute collections on its accounts; (ii) execute in the name of such Person any financing statements, schedules, assignments, instruments, documents, and statements that it is obligated to give the Administrative Agent or the Lenders under any of the Loan Documents; and (iii) do such other and further acts and deeds in the name of such Person that the Administrative Agent or the Lenders may deem necessary or desirable to enforce any account or other Collateral or to perfect the Administrative Agent's security interest or lien in any Collateral or after the occurrence of an Event of Default which is continuing, enforce an account or other Collateral.  In addition, if any such Person breaches its obligation hereunder to direct payments of accounts or the proceeds of any other Collateral to the appropriate Borrower's account, the Administrative Agent on behalf of the Lenders, as the irrevocably appointed true and lawful attorney for such Person pursuant to this paragraph, may, by the signature or other act of any of the Administrative Agent's officers or authorized signatories direct any private payor to pay proceeds of accounts or any other Collateral to the appropriate Borrower's account.
In addition to the acceleration provisions set forth above, upon the occurrence and continuation of an Event of Default, Borrower shall take any action that the Administrative Agent may request in order to enable the Administrative Agent to obtain and enjoy the full rights and benefits granted to the Administrative Agent or the Lenders hereunder.  Without limiting the generality of the foregoing, upon the occurrence and continuation of any Event of Default, at the request of the Administrative Agent and at Borrower's sole cost and expense, Borrower shall execute all documents and take all other actions requested by the Administrative Agent to enable it, its designee, any receiver, trustee or similar official or any purchaser of all or any part of the Collateral to obtain from any Person any required authority necessary to operate the business of Borrower.

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ARTICLE VII

   The Administrative Agent

Each of the Lenders hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf, including execution of the other Loan Documents, and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents.  Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02), and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the bank or other entity serving as Administrative Agent or any of its Affiliates in any capacity.  The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02) or in the absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or in connection with any Loan Document, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon.  The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties.  The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

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Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders and the Borrower.  Upon any such resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor.  If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent which shall be an entity with an office in New York, New York, or an Affiliate of any such entity.  Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder.  The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor.  After the Administrative Agent's resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.
The Lenders are not partners or co-venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of the Administrative Agent) authorized to act for, any other Lender.  The Administrative Agent shall have the exclusive right on behalf of the Lenders to enforce the payment of the principal of and interest on any Loan after the date such principal or interest has become due and payable pursuant to the terms of this Agreement.
ARTICLE IX

Miscellaneous Notices.  (a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:

46

	
		
	(i)If to the Borrower:
	DPM Acquisition, LLC
10615 Park Run Drive
Las Vegas, NV  89144
Attn:  General Counsel
Telephone:  (702) 823-7550
Telecopy:  (702) 765-8615

	 
	 

	with a copy to:
	Katten Muchin Rosenman LLP
525 West Monroe Street
Suite 1900
Chicago, IL  60661
Attn:  Ann Marie Sink (337444/13)
Telephone:  (312) 902-5233
Telecopy:  (312) 577-8907

	 
	 

	(ii)if to the Administrative Agent:
	Guggenheim Corporate Funding, LLC
135 East 57th Street
New York, New York  10022
Attention:  Kaitlin Trinh
Telephone:  212-651-0840
E-mail: Kaitlin.Trinh@guggenheimpartners.com

	 

	(iii)If to any Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire provided to the Administrative Agent.

(b) Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender.  The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

(c) Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto.  All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

SECTION 9.02. Waivers; Amendments.  (a) No failure or delay by the Administrative Agent or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Administrative Agent and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent 

47

or any Lender may have had notice or knowledge of such Default at the time.

(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender directly affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan (other than any reduction of the amount of, or any extension of the payment date for, the mandatory prepayments required under Section 2.07(b), 2.07(c), 2.07(d) and 2.07(e), in each case which shall only require the approval of the Required Lenders), or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, the Revolving Maturity Date or the Term Loan Maturity Date, without the written consent of each Lender directly affected thereby, (iv) change Section 2.12(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender, (vi) cause or permit the release or subordination of the Agent's lien in any material portion of the Collateral without the written consent of each Lender or (vii) cause or permit the release of Borrower or any Guarantor from their liabilities and obligations under the Loan Document without the written consent of each Lender; provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent without the prior written consent of the Administrative Agent.

(c) Notwithstanding the foregoing, this Agreement and any other Loan Document may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Borrower (x) to add one or more credit facilities to this Agreement and to permit extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Revolving Loans, the Term Loans and the accrued interest and fees in respect thereof and (y) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders and Lenders.

(d) Notwithstanding anything to the contrary herein the Administrative Agent may, with the consent of the Borrower only, amend, modify or supplement this Agreement or any of the other Loan Documents to cure any ambiguity, omission, mistake, defect or inconsistency.

SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a)     The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication and distribution (including, without limitation, via the internet or through a service such as Intralinks) of the credit facilities provided for herein, the preparation and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated); including, without limitation, the fees and expenses charged by the rating agencies, (ii) if the Administrative Agent elects to have the credit facilities provided for herein rated, all out-of-pocket expenses incurred by the Administrative Agent and its Affiliates in connection with obtaining and maintaining such rating, including the fees and charges of the rating agencies, and (iii)  all out-of-pocket expenses incurred by the Administrative Agent or any Lender, including the fees, charges and disbursements of any counsel for the 

48

Administrative Agent or any Lender, in connection with the enforcement or protection of its rights in connection with this Agreement and any other Loan Document, including its rights under this Section, or in connection with the Loans made hereunder, including all such out-of-pocket expenses incurred during  any workout, restructuring or negotiations in respect of such Loans.

(b)The Borrower shall indemnify the Administrative Agent and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document or any agreement or instrument contemplated thereby, the performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or the use of the proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any of its Subsidiaries, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.  This Section 9.03(b) shall not apply with respect to Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.

(c) To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent such Lender's Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount (it being understood that the Borrower's failure to pay any such amount shall not relieve the Borrower of any default in the payment thereof); provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent in its capacity as such.

(d) To the extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee (i) for any damages arising from the use by others of information or other materials obtained through telecommunications, electronic or other information transmission systems (including the Internet), or (ii) on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or the use of the proceeds thereof.

(e) All amounts due under this Section shall be payable not later than fifteen (15) days after written demand therefor.

SECTION 9.04. Successors and Assigns. (a)   The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person 

49

(other than the parties hereto, their respective successors and assigns permitted hereby, Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(a) Any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of the Administrative Agent and the Borrower (provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after having received notice thereof); provided, further, that no consent of the Borrower shall be required for an assignment to a Lender, an Approved Fund, any other Affiliate of a Lender or, if an Event of Default has occurred and is continuing, any other assignee. 

(c) Subject to acceptance and recording thereof pursuant to this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.10, 2.11 and 9.03).  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (f) of this Section.

(d) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive absent demonstrable error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(e) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to this Agreement, the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon.  No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(f) Any Lender may, without the consent of the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender's rights and obligations under this Agreement (including all or a portion of its 

50

Commitment and the Loans owing to it); provided that (A) such Lender's obligations under this Agreement shall remain unchanged; (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations; and (C) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement.  Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant's interest in the Loans or other obligations under this Agreement (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant's interest in any Commitments, Loans or its other obligations under any Loan Document) other than the Borrower except to the extent that such disclosure is necessary to establish that such Commitment, Loan or other obligation is in registered form under Section 5f.103‐1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent demonstrable error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

(g) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 9.05. Survival.  All covenants, agreements, representations and warranties made by the Borrower in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement or any other Loan Document is outstanding and unpaid and so long as the Commitments have not expired or terminated.  The provisions of Sections 2.10, 2.11 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Commitments or the termination of this Agreement or any other Loan Document or any provision hereof or thereof.

SECTION 9.06. Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the 

51

signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.  Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic imaging shall be effective as delivery of a manually executed counterpart of this Agreement.

SECTION 9.07. Severability.  Any provision of any Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 9.08 Right of Setoff.  If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final and in whatever currency denominated) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against any of and all of the Obligations held by such Lender, irrespective of whether or not such Lender shall have made any demand under the Loan Documents and although such obligations may be unmatured.  The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.
 
(a) This Agreement shall be construed in accordance with and governed by the law of the State of New York.

(b)The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction.

(c) The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01.  Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

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SECTION 9.11. WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 9.11. Headings.  Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 9.12. Confidentiality.  Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates' directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies under this Agreement or any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii)any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent or any Lender on a nonconfidential basis from a source other than the Borrower.  For the purposes of this Section, “Information” means all information received from the Borrower relating to the Borrower or its business, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower; provided that, in the case of information received from the Borrower after the date hereof, such information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

SECTION 9.13. Intentionally Omitted.

SECTION 9.14. USA PATRIOT Act.  Each Lender that is subject to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) hereby notifies the Borrower that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrower in accordance with the Act.

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SECTION 9.15. Interest Rate Limitation.  Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

SECTION 9.16. No Advisory or Fiduciary Responsibility.  In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees that: (i) (A) the arranging and other services regarding this Agreement provided by the Lenders are arm's-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Lenders, on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) each of the Lenders is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (B) no Lender has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) each of the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and no Lender has any obligation to disclose any of such interests to the Borrower or its Affiliates.  To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against each of the Lenders with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

 Signature Pages Follow

54

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

	
		
	DPM ACQUISITION, LLC, as the Borrower

	 

	 

	By: /s/ David F. Palmer

	 
	Name:  David F. Palmer

	 
	Title:  President

	 

	 

	GUGGENHEIM CORPORATE FUNDING, LLC, as Administrative Agent

	 

	 

	By: /s/ William Hagner

	 
	Name:  William Hagner

	 
	Title:  Senior Managing Director

	 

	 

Signature Page to 
Loan Agreement
(DPM Acquisition, LLC)

55

	
		
	MIDLAND NATIONAL LIFE INSURANCE
COMPANY, as a Lender

By:  Guggenheim Partners Asset Management, LLC, as investment adviser

	 

	 

	By: /s/ Michael Damaso

	 
	Name:  Michael Damaso

	 
	Title:  Senior Managing Director

	 

	 

Signature Page to 
Loan Agreement
(DPM Acquisition, LLC)

56

	
		
	NORTH AMERICAN COMPANY FOR
LIFE AND HEALTH INSURANCE, as a Lender

By:  Guggenheim Partners Asset Management, LLC, as investment adviser

	 

	 

	By: /s/ Michael Damaso

	Name:  Michael Damaso
	 

	Title:  Senior Managing Director
	 

	 

	 

Signature Page to 
Loan Agreement
(DPM Acquisition, LLC)

57

	
		
	SBC FUNDING, LLC, as a Lender

By:  Guggenheim Partners Asset Management, LLC, as investment adviser

	 

	 

	By: /s/ Michael Damaso

	Name:  Michael Damaso
	 

	Title:  Senior Managing Director
	 

	 

	 

Signature Page to 
Loan Agreement
(DPM Acquisition, LLC)

58

	
		
	GUGGENHEIM LIFE & ANNUITY COMPANY, as a Lender

By:  Guggenheim Partners Asset Management, LLC, as investment adviser

	 

	 

	By: /s/ Michael Damaso

	Name:  Michael Damaso
	 

	Title:  Senior Managing Director
	 

	 

	 

Signature Page to 
Loan Agreement
(DPM Acquisition, LLC)

59

	
		
	EQUITRUST LIFE INSURANCE COMPANY, as a Lender

By:  Guggenheim Partners Asset Management, LLC, as investment adviser

	 

	 

	By: /s/ Michael Damaso

	Name:  Michael Damaso
	 

	Title:  Senior Managing Director
	 

	 

	 

Signature Page to 
Loan Agreement
(DPM Acquisition, LLC)

60

	
		
	WILSHIRE INSTITUTIONAL MASTER
FUND SPC - GUGGENHEIM ALPHA
SEGREGATED PORT, as a Lender

By:  Guggenheim Partners Asset Management, LLC, as investment adviser

	 

	 

	By: /s/ Michael Damaso

	Name:  Michael Damaso
	 

	Title:  Senior Managing Director
	 

	 

	 

Signature Page to 
Loan Agreement
(DPM Acquisition, LLC)

61

	
		
	WAKE FOREST UNIVERSITY, as a Lender

By:  Guggenheim Partners Asset Management, LLC, as investment adviser

	 

	 

	By: /s/ Michael Damaso

	Name:  Michael Damaso
	 

	Title:  Senior Managing Director
	 

	 

	 

Signature Page to 
Loan Agreement
(DPM Acquisition, LLC)

62

	
		
	SILVER ROCK FINANCIAL LLC, as a Lender

	 

	 

	By: /s/ Ralph Finerman

	 
	Name:  Ralph Finerman

	 
	Title:  Manager

	 

	 

Signature Page to 
Loan Agreement
(DPM Acquisition, LLC)

63

	
		
	DNSMORE LLC, as a Lender

	 

	 

	By: /s/ Ralph Finerman

	Name:  Ralph Finerman
	 

	Title:  Manager
	 

	 

	 

Signature Page to 
Loan Agreement
(DPM Acquisition, LLC)

64

	
		
	NP1 LLC, as a Lender

	 

	 

	By: /s/ Ralph Finerman

	Name:  Ralph Finerman
	 

	Title:  Manager
	 

	 

	 

Signature Page to 
Loan Agreement
(DPM Acquisition, LLC)

65

	
		
	GENTRACE LLC, as a Lender

	 

	 

	By: /s/ Ralph Finerman

	Name:  Ralph Finerman
	 

	Title:  Manager
	 

	 

	 

Signature Page to 
Loan Agreement
(DPM Acquisition, LLC)

66

	
		
	MOUNTE LLC, as a Lender

	 

	 

	By: /s/ Ralph Finerman

	Name:  Ralph Finerman
	 

	Title:  Manager
	 

	 

	 

Signature Page to 
Loan Agreement
(DPM Acquisition, LLC)

67

	
		
	WELLWATER LLC, as a Lender

	 

	 

	By: /s/ Ralph Finerman

	Name:  Ralph Finerman
	 

	Title:  Manager
	 

	 

	 

Signature Page to 
Loan Agreement
(DPM Acquisition, LLC)

68

	
		
	GENUNO LLC, as a Lender

	 

	 

	By: /s/ Ralph Finerman

	Name:  Ralph Finerman
	 

	Title:  Manager
	 

	 

	 

Signature Page to 
Loan Agreement
(DPM Acquisition, LLC)

69

	
	
	QUISSETT PARTNERS, L.P., as a Lender

By: Wellington Management Company, LLP
as investment adviser

By: /s/ Steven M. Hoffman
  Name: Steven M. Hoffman
  Title: Vice President & Counsel

	 

Signature Page to 
Loan Agreement
(DPM Acquisition, LLC)

70

	
	
	QUISSETT INVESTORS (BERMUDA) L.P., as a Lender

By: Wellington Management Company, LLP
as investment adviser

By: /s/ Steven M. Hoffman
  Name: Steven M. Hoffman
  Title: Vice President & Counsel

	 

Signature Page to 
Loan Agreement
(DPM Acquisition, LLC)

71

	
	
	BAY POND PARTNERS, L.P., as a Lender

By: Wellington Management Company, LLP
as investment adviser

By: /s/ Steven M. Hoffman
  Name: Steven M. Hoffman
  Title: Vice President & Counsel

Signature Page to 
Loan Agreement
(DPM Acquisition, LLC)

72

	
	
	BAY POND INVESTORS (BERMUDA) L.P., as a Lender

By: Wellington Management Company, LLP
as investment adviser

By: /s/ Steven M. Hoffman
  Name: Steven M. Hoffman
  Title: Vice President & Counsel

Signature Page to 
Loan Agreement
(DPM Acquisition, LLC)

73

	
		
	ITHAN CREEK MASTER INVESTORS (CAYMAN) L.P., as a Lender

By: Wellington Management Company, LLP
as investment adviser

By: /s/ Steven M. Hoffman
  Name: Steven M. Hoffman
  Title: Vice President & Counsel

	 

	ITHAN CREEK MASTER INVESTMENT PARTNERSHIP (CAYMAN) II, L.P., as a Lender 

By: Wellington Management Company, LLP
as investment adviser

By: /s/ Steven M. Hoffman
  Name: Steven M. Hoffman
  Title: Vice President & Counsel

	 
	 

	 
	 

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SCHEDULE 1.01

LIST OF POST COMPANIES
Monarch Owner Services, Inc., a California corporation

Monarch Owners Services, LLC, a Nevada limited liability company

Resort Services Group, Inc., a California corporation

Resort Services Group, LLC, a Nevada limited liability company

Monarch Grand Vacations Management, Inc., a California corporation

Monarch Grand Vacations Management, LLC, a Nevada limited liability company

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SCHEDULE 2.01

LENDERS; COMMITMENTS
	
			
	LENDER
	REVOLVING COMMITMENT
	TERM LOAN COMMITMENT

	1.  MIDLAND NATIONAL LIFE INSURANCE COMPANY
	$2,200,000
	$11,762,500

	2.  NORTH AMERICAN COMPANY FOR LIFE AND HEALTH INSURANCE
	$1,000,000
	$6,000,000

	3.  SBC FUNDING, LLC
	$1,600,000
	$8,198,077

	4.GUGGENHEIM LIFE & ANNUITY COMPANY
	$1,600,000
	$6,148,558

	5.  EQUITRUST LIFE INSURANCE COMPANY
	$1,600,000
	$10,930,769

	6.  WILSHIRE INSTITUTIONAL MASTER FUND SPC - GUGGENHEIM ALPHA SEGREGATED PORT
	$—
	$1,024,760

	7.  WAKE FOREST
	$—
	$341,587

	8.  SILVER ROCK FINANCIAL LLC
	$—
	$1,000,000

	9.  DNSMORE LLC
	$—
	$1,000,000

	10.  NP1 LLC
	$—
	$500,000

	11.  GENTRACE LLC
	$—
	$500,000

	12.  MOUNTE LLC
	$—
	$500,000

	13.  WELLWATER LLC
	$—
	$500,000

	14.  GENUNO LLC
	$—
	$593,750

	15.  QUISSETT PARTNERS, L.P.
	$335,000
	$2,050,000

	16.  QUISSETT INVESTORS (BERMUDA) L.P.
	$435,000
	$2,662,000

	17.  BAY POND PARTNERS, L.P.
	$634,000
	$3,890,000

	18.  BAY POND INVESTORS (BERMUDA) L.P.
	$367,000
	$2,246,000

	19.  ITHAN CREEK MASTER INVESTORS (CAYMAN) L.P.
	$192,000
	$1,176,000

	20.  ITHAN CREEK MASTER INVESTMENT PARTNERSHIP (CAYMAN) II, L.P.
	$37,000
	$226,000

	 
	 
	 

	 
	 
	 

	AGGREGATE COMMITMENTS
	$10,000,000
	$61,250,000

76

SCHEDULE 3.13

SUBSIDIARIES; EQUITY INTERESTS

	
				
	Subsidiary
	Equity Interests
	 

	 
	 
	 

	DPM Acquisition Mexico, S. de R.L. de C.V.
	DPM Acquisition, LLC
	90
	%

	 
	DPM Holdings, LLC
	10
	%

	 
	 
	 

	Operating DPM, S. de R.L. de C.V.
	DPM Acquisition, LLC
	90
	%

	 
	DPM Holdings, LLC
	10
	%

	 
	 
	 

	Sales DPM, S. de R.L. de C.V.
	DPM Acquisition, LLC
	90
	%

	 
	DPM Holdings, LLC
	10
	%

	 
	 
	 

	DPM RP Subsidiary, LLC (DE)
	DPM Acquisition, LLC
	100
	%

	 
	 
	 

	 
	 
	 

	DPM Loanco, LLC
	DPM Acquisition, LLC
	100
	%

	 
	 
	 

77

SCHEDULE 3.14
DIVIDEND RESTRICTIONS
None.
SCHEDULE 6.01
LIENS
None.
SCHEDULE 6.02
DISPOSITIONS
None.
SCHEDULE 6.04
INVESTMENTS
None.
SCHEDULE 6.09
RESTRICTIVE AGREEMENTS
None.

78

EXHIBIT A
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”).  Capitalized terms used but not defined herein shall have the meanings given to them in the Loan Agreement identified below (as amended, the “Loan Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Loan Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor's rights and obligations in its capacity as a Lender under the Loan Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Loan Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”).  Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.
	
						
	1.
	Assignor:
	 
	 
	 

	 
	 
	 
	 
	 

	2.
	Assignee:
	 
	 
	 

	 
	 
	 

	 
	 
	 

	3.
	Borrower(s):
	 
	 

	 
	 
	 

	4.
	Administrative Agent:
	Guggenheim Corporate Funding, LLC, as the administrative agent under the Loan Agreement

	 
	 
	 

	5.
	Loan Agreement:
	The Loan and Security Agreement dated as of May 21, 2012 among DPM Acquisition, LLC, the Lenders parties thereto, Guggenheim Corporate Funding, LLC, as Administrative Agent, and the other agents parties thereto

	6.
	Assigned Interest:
	 
	 
	 
	 

 

79

	
					
	Facility Assigned Fill in the appropriate terminology for the types of facilities under the Loan Agreement that are being assigned under this Assignment (e.g., “Revolving Commitment”, “Term Loan Commitment”, etc.).
	Aggregate Amount of Commitment/Loans for all Lenders
	Amount of Commitment/
Loans Assigned
	Percentage Assigned of Commitment/Loans Set forth, so at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

	 
	$
	$
	%
	 

	 
	$
	$
	%
	 

	 
	$
	$
	%
	 

Effective Date:  _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
	
				
	 
	ASSIGNOR

	 
	 

	 
	[NAME OF ASSIGNOR]

	 
	 

	 
	By:
	 

	 
	 
	Title:

	 
	 

	 
	ASSIGNEE

	 
	 

	 
	[NAME OF ASSIGNEE]

	 
	 

	 
	By:
	 

	 
	 
	Title:

80

	
				
	[Consented to and Accepted:
	 

	 
	 

	GUGGENHEIM CORPORATE FUNDING, as Administrative Agent
	 

	 
	 

	By:
	________________________________
	 
	 

	Name:
Title:
	 
	 

	 
	 

	 
	 

	

[Consented to:
	 

	 
	 

	DPM ACQUISITION, LLC
	 

	 
	 

	By:
	________________________________
	 
	 

	Name:
Title: ] To be added only if the consent of the Borrower is required by the terms of the Loan Agreement.
	 
	 

81

ANNEX I
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1.  Representations and Warranties.
1.1  Assignor.  The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and (iv) it [is][is not] an Affiliate of the Borrower; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Loan Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
1.2.  Assignee.  The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Loan Agreement, (ii) it satisfies the requirements, if any, specified in the Loan Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Loan Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Loan Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, (v) if it is a Non-U.S. Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Loan Agreement, duly completed and executed by the Assignee and (vi) it does not bear a relationship to the Borrower described in Section 108(e)(4) of the Code; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.
2.  Payments.  From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.
3.  General Provisions.  This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

82

EXHIBIT B-1
FORM OF REVOLVING LOAN NOTE
REVOLVING LOAN NOTE                                                                                              [DATE]
FOR VALUE RECEIVED, the undersigned, DPM ACQUISITION, LLC, a Delaware limited liability company (the “Borrower”), HEREBY UNCONDITIONALLY PROMISES TO PAY to the order of [LENDER NAME] (the “Lender”) the aggregate unpaid principal amount of all Revolving Loans made by the Lender to the Borrower pursuant to the “Loan Agreement” (as defined below) on the Maturity Date or on such earlier date as may be required by the terms of the Loan Agreement.  Capitalized terms used herein and not otherwise defined herein are as defined in the Loan Agreement.
The undersigned Borrower promises to pay interest on the unpaid principal amount of each Revolving Loan made to it from the date of such Revolving Loan until such principal amount is paid in full at a rate or rates per annum determined in accordance with the terms of the Loan Agreement.  Interest hereunder is due and payable at such times and on such dates as set forth in the Loan Agreement.
At the time of each Revolving Loan, and upon each payment or prepayment of principal of each Revolving Loan, the Lender shall make a notation either on the schedule attached hereto and made a part hereof, or in such Lender's own books and records, in each case specifying the amount of such Revolving Loan or the amount of principal paid or prepaid with respect to such Revolving Loan, as applicable; provided that the failure of the Lender to make any such recordation or notation shall not affect the Obligations of the undersigned Borrower hereunder or under the Loan Agreement.
This Note is one of the notes referred to in, and is entitled to the benefits of, that certain Loan and Security Agreement dated as of May 21, 2012 by and among the Borrower, the financial institutions from time to time parties thereto as Lenders and Guggenheim Corporate Funding, LLC, as Administrative Agent (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”).  The Loan Agreement, among other things, (i) provides for the making of Revolving Loans by the Lender to the undersigned Borrower from time to time in an aggregate amount not to exceed at any time outstanding such Lender's Revolving Commitment, the indebtedness of the undersigned Borrower resulting from each such Revolving Loan to it being evidenced by this Note, and (ii) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments of the principal hereof prior to the maturity hereof upon the terms and conditions therein specified.
Demand, presentment, protest and notice of nonpayment and protest are hereby waived by the Borrower.  Whenever in this Note reference is made to the Administrative Agent, the Lender or the Borrower, such reference shall be deemed to include, as applicable, a reference to their respective successors and assigns.  The provisions of this Note shall be binding upon and shall inure to the benefit of said successors and assigns.  The Borrower's successors and assigns shall include, without limitation, a receiver, trustee or debtor in possession of or for the Borrower.
This Note shall be construed in accordance with and governed by the law of the State of New York.
DPM ACQUISITION, LLC

By:                        
Name:
Title:

Signature Page to
Term Loan Note

83

SCHEDULE OF LOANS AND PAYMENTS OR PREPAYMENTS

	
						
	Date
	Amount of Loan
	Interest Rate
	Amount of Principal Paid or Prepaid
	Unpaid Principal Balance
	Notation Made By

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

84

EXHIBIT B-2

FORM OF TERM LOAN NOTE
    TERM LOAN NOTE                                                                                        [DATE]    
FOR VALUE RECEIVED, the undersigned, DPM ACQUISITION, LLC, a Delaware limited liability company (the “Borrower”), HEREBY UNCONDITIONALLY PROMISES TO PAY to the order of [LENDER NAME] (the “Lender”) the aggregate unpaid principal amount of all Term Loans made by the Lender to the Borrower pursuant to the “Loan Agreement” (as defined below) on May 21, 2016 or on such earlier date as may be required by the terms of the Loan Agreement.  Capitalized terms used herein and not otherwise defined herein are as defined in the Loan Agreement.
The undersigned Borrower promises to pay interest on the unpaid principal amount of each Term Loan made to it from the date of such Term Loan until such principal amount is paid in full at a rate or rates per annum determined in accordance with the terms of the Loan Agreement.  Interest hereunder is due and payable at such times and on such dates as set forth in the Loan Agreement.
At the time of each Term Loan, and upon each payment or prepayment of principal of each Term Loan, the Lender shall make a notation either on the schedule attached hereto and made a part hereof, or in such Lender's own books and records, in each case specifying the amount of such Term Loan or the amount of principal paid or prepaid with respect to such Term Loan, as applicable; provided that the failure of the Lender to make any such recordation or notation shall not affect the Obligations of the undersigned Borrower hereunder or under the Loan Agreement.
This Note is one of the notes referred to in, and is entitled to the benefits of, that certain Loan and Security Agreement dated as of May 21, 2012 by and among the Borrower, the financial institutions from time to time parties thereto as Lenders and Guggenheim Corporate Funding, LLC, as Administrative Agent (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”).  The Loan Agreement, among other things, (i) provides for the making of Term Loans by the Lender to the undersigned Borrower from time to time in an aggregate amount not to exceed at any time outstanding such Lender's Term Loan Commitment, the indebtedness of the undersigned Borrower resulting from each such Term Loan to it being evidenced by this Note, and (ii) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments of the principal hereof prior to the maturity hereof upon the terms and conditions therein specified.
Demand, presentment, protest and notice of nonpayment and protest are hereby waived by the Borrower.  Whenever in this Note reference is made to the Administrative Agent, the Lender or the Borrower, such reference shall be deemed to include, as applicable, a reference to their respective successors and assigns.  The provisions of this Note shall be binding upon and shall inure to the benefit of said successors and assigns.  The Borrower's successors and assigns shall include, without limitation, a receiver, trustee or debtor in possession of or for the Borrower.
This Note shall be construed in accordance with and governed by the law of the State of New York.

DPM ACQUISITION, LLC

By:                        
Name:
Title:

85

SCHEDULE OF LOANS AND PAYMENTS OR PREPAYMENTS
	
						
	Date
	Amount of Loan
	Interest Rate
	Amount of Principal Paid or Prepaid
	Unpaid Principal Balance
	Notation Made By

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

86

EXHIBIT C-1

FORM OF U.S. TAX CERTIFICATE

(For Non-U.S. Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Loan and Security Agreement dated as of May 21, 2012 (as amended, supplemented or otherwise modified from time to time, the “Loan Agreement”), among DPM Acquisition, LLC (the “Borrower”), the Lenders party thereto and Guggenheim Corporate Funding, LLC, as administrative agent (in such capacity, the “Administrative Agent”).

Pursuant to the provisions of Section 2.11 of the Loan Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code and (v) the interest payments in question are not effectively connected with the undersigned's conduct of a U.S. trade or business.

The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. person status on IRS Form W-8BEN.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan Agreement and used herein shall have the meanings given to them in the Loan Agreement.

[NAME OF LENDER]

By:______________________________________
Name:
Title:

Date:  __________, 20[__]

87

EXHIBIT C-2

FORM OF U.S. TAX CERTIFICATE

(For Non-U.S. Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Loan and Security Agreement dated as of May 21, 2012 (as amended, supplemented or otherwise modified from time to time, the “Loan Agreement”), among DPM Acquisition, LLC (the “Borrower”), the Lenders party thereto and Guggenheim Corporate Funding, LLC, as administrative agent (in such capacity, the “Administrative Agent”).

Pursuant to the provisions of Section 2.11 of the Loan Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Loan Agreement, neither the undersigned nor any of its partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments in question are not effectively connected with the undersigned's or its partners/members' conduct of a U.S. trade or business.

The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of its partners/members claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan Agreement and used herein shall have the meanings given to them in the Loan Agreement.

[NAME OF LENDER]

By:______________________________________
Name:
Title:

Date:  ________ __, 20[__]

88

EXHIBIT C-3

FORM OF U.S. TAX CERTIFICATE

(For Non-U.S. Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Loan and Security Agreement dated as of May 21, 2012 (as amended, supplemented or otherwise modified from time to time, the “Loan Agreement”), among DPM Acquisition, LLC (the “Borrower”), the Lenders party thereto and Guggenheim Corporate Funding, LLC, as administrative agent (in such capacity, the “Administrative Agent”).

Pursuant to the provisions of Section 2.11 of the Loan Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (v) the interest payments in question are not effectively connected with the undersigned's conduct of a U.S. trade or business.

The undersigned has furnished its participating Lender with a certificate of its non- U.S. person status on IRS Form W-8BEN.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan Agreement and used herein shall have the meanings given to them in the Loan Agreement.

[NAME OF LENDER]

By:______________________________________
Name:
Title:

Date:  ________ __, 20[__]

89

EXHIBIT C-4

FORM OF U.S. TAX CERTIFICATE

(For Non-U.S. Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Loan and Security Agreement dated as of May 21, 2012 (as amended, supplemented or otherwise modified from time to time, the “Loan Agreement”), among DPM Acquisition, LLC (the “Borrower”), the Lenders party thereto and Guggenheim Corporate Funding, LLC, as administrative agent (in such capacity, the “Administrative Agent”).

Pursuant to the provisions of Section 2.11 of the Loan Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments in question are not effectively connected with the undersigned's or its partners/members' conduct of a U.S. trade or business.

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of its partners/members claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Loan Agreement and used herein shall have the meanings given to them in the Loan Agreement.

[NAME OF PARTICIPANT]

By:______________________________________
Name:
Title:

Date:  ________ __, 20[__]

90

EXHIBIT D

LIST OF CLOSING DOCUMENTS

None.

91

EXHIBIT E

MATERIAL CONTRACTS
	
			
	Contract Name
	Other Party(ies)
	Description

	Common Area Use and License Agreement for Building A
	Riviera Mi Vida, Cabo VPOA
	Necessary for occupants of Building A at Cabo Azul Resort to access resort common areas and amenities

	Common Area Use and License Agreement for Building G
	Mark Post, Cabo VPOA
	Necessary for occupants of Building G units at Cabo Azul Resort to access resort common areas and amenities

	Declaration of Deannexation
	MGVOA
	Required for deannexation; Cabo Azul VPOA, Cancun, Cedar Breaks, Desert Isle, Palm Canyon, Riviera Beach and Spa, Riviera Oaks, Riviera Shores, Tahoe Seasons

	Development Agreement
	MGVOA
	PMR is exclusive sales organization for MGV

	Guaranty
	Guggenheim
	Guaranty

	Guaranty
	RFA
	Guaranty

	Loan and Security Agreement
	Guggenheim
	Loan and Security Agreement

	Management Agreement
	Cabo Azul VPOA
	Management fees (Operations)

	Management Agreement
	Cabo Azul VPOA
	Management fees (Admin)

	Management Agreement
	Cancun Resort VPOA
	Management fees

	Management Agreement
	Cedar Breaks Lodge VPOA
	Management fees

	Management Agreement
	MGVOA
	Management fees

	Oversight Agreement
	Post Company
	Post Companies to continue providing management and oversight services to and for the benefit of the PMR VPOAs under the Post Companies agreements

	Portfolio 1 Backstop Agreement
	RFA
	Portfolio 1 Backstop Agreement

	Security Pledge Agreement
	Guggenheim
	Security Pledge Agreement

	Shared Front Desk Agreement
	Riviera Gerencia de Proyectos, Riviera Mi Vida, Cabo VPOA
	Necessary for occupants of building A at Cabo Azul Resort to check-in at the resort's front desk.

	Trust Agreement
	MGVOA
	Per DRE requirements, PMR is Trustor and MGVOA is Trustee

	Warrant
	Guggenheim
	Warrant

	Warrant Agreement
	Guggenheim
	Warrant Agreement

92

EXHIBIT F
STATEMENT OF CASH FLOWS

	
				
	EXHIBIT F
	 
	 
	 

	DPM Acquisition, LLC
	 
	 
	 

	2012 Statement of Operations
	 
	 
	 

	Consolidated Bridge
	 
	 
	 

	 
	 YTD
	 Paid to/by
	 Net to

	 
	 
	 RFA
	 DPM (Gugg)

	 
	 
	 
	 

	Revenue
	 
	 
	 

	 
	 
	 
	 

	Management and Member Services
	 
	 
	 

	 
	 
	 
	 

	     Management Fee Revenue
	—
	—
	—

	 
	 
	 
	 

	Consolidated Resort Operations:
	 
	 
	 

	      Other Income
	—
	—
	—

	 
	 
	 
	 

	Interest Income:
	 
	 
	 

	House Portfolio
	—
	—
	—

	 
	 
	 
	 

	Other Revenue:
	 
	 
	 

	     Portfolio Fee Income
	 
	 
	—

	     Timeshare Sales (to DRC)
	 
	 
	—

	     Other
	 
	 
	—

	Total other
	—
	—
	—

	 
	 
	 
	 

	Total Revenue
	—
	—
	—

	 
	 
	 
	 

	 
	 
	 
	 

	Costs and Operating Expenses:
	 
	 
	 

	 
	 
	 
	 

	Other Expense (Cost of Vacation Interest)
	—
	—
	—

	 
	 
	 
	 

	Advertising Sales and Marketing
	—
	—
	—

	 
	 
	 
	 

	Vacation Interest Carry Cost
	 
	 
	 

	Maintenance Fee
	 
	 
	—

	Gross Rental Revenue
	 
	 
	—

	Leasing Expense (Diamond)  - Cash
	 
	 
	—

	Leasing Expense (Diamond)  - Deferred
	 
	 
	—

	Property Taxes
	 
	 
	—

	Net Vacation Interest Carry Cost
	—
	—
	—

	 
	 
	 
	 

	 
	 
	 
	 

	Management and Member Services
	 
	 
	 

	Sub-management Fee Expense - Deferred
	 
	 
	—

	Other Expense
	 
	 
	—

	Total Management and Member Services Exp
	—
	—
	—

	 
	 
	 
	 

	Resort Operations Expense:
	 
	 
	 

	Other Operations
	 
	 
	—

93

	
				
	      Total Resort Operations Expense
	—
	—
	—

	 
	 
	 
	 

	Loan Portfolio
	—
	—
	—

	 
	 
	 
	 

	General and Administrative:
	 
	 
	 

	      Payroll
	 
	 
	—

	     Office Facilities
	 
	 
	—

	     Legal and Professional
	 
	 
	—

	     Technology
	 
	 
	—

	     Other Expenses
	 
	 
	—

	     G&A Allocations - intercompany - Cash
	 
	 
	—

	     G&G Allocations - intercompany - Deferred
	 
	 
	—

	     Total G&A Expenses
	—
	—
	—

	 
	 
	 
	 

	Interest Expense
	 
	 
	 

	Guggenheim
	 
	 
	 

	     Cash
	 
	 
	—

	     Paid In Kind - Deferred
	 
	 
	—

	     Exit Fee - Deferred
	 
	 
	—

	Intercompany - Deferred
	 
	 
	—

	Amortization of Debt Issuance Costs
	 
	 
	—

	Other
	 
	 
	—

	Total Interest Expense
	—
	—
	—

	 
	 
	 
	 

	Depreciation and Amortization:
	 
	 
	 

	Depreciation
	 
	 
	—

	Amortization
	 
	 
	—

	Total Depreciation and Amortization
	—
	—
	—

	 
	 
	 
	 

	Gain(Loss) on Disposal of Assets
	 
	 
	—

	 
	 
	 
	 

	Total Costs and Operating Expenses
	—
	—
	—

	 
	 
	 
	 

	Income Before Tax
	 
	 
	—

	 
	 
	 
	 

	Income Tax Expense
	 
	 
	—

	 
	 
	 
	 

	Net Income
	—
	—
	—

	 
	 
	 
	 

	 
	 
	 
	 

	EBITDA
	 
	 
	 

	Income Before Tax
	 
	—
	—

	Depreciation and Amortization
	 
	—
	—

	Interest Expense (excluding RFA and Textron interest expense)
	—
	—

	Cost of Vacation Interest
	 
	—
	—

	EBITDA
	—
	—
	—

	 
	 
	 
	 

	CASH INCOME
	 
	 
	 

	Net Income
	 
	—
	—

	Leasing Expense (Diamond)  - Deferred
	 
	—
	—

	Sub-management Fee Expense - Deferred
	 
	—
	—

	     G&A Allocations - Intercompany - Deferred
	 
	—
	—

	     Interest Expense - Deferred and Non Cash
	 
	—
	—

	CASH INCOME
	—
	—
	—

94

	
				
	 
	 
	 
	 

	CASH EBITDA
	 
	 
	 

	Income Before Tax
	 
	—
	—

	Depreciation and Amortization
	 
	—
	—

	Interest Expense
	 
	—
	—

	Cost of Vacation Interest
	 
	—
	—

	Other Expenses
	 
	 
	 

	Leasing Expense (Diamond)  - Deferred
	 
	—
	—

	Sub-management Fee Expense - Deferred
	 
	—
	—

	     G&A Allocations - Intercompany - Deferred
	 
	—
	—

	CASH EBITDA
	—
	—
	—

	 
	 
	 
	 

	PROJECTED CASH FLOW
	 
	 
	 

	Cash EBITDA
	 
	 
	 

	   Less :  Cash Interest
	 
	 
	 

	   Less:  RFA Backstop Payments
	 
	 
	 

	   Less:  Payment of Beginning Liabilities and Other Liabilities
	 
	 
	 

	Cash Available to Pay Guggenheim
	 
	 
	—

	 
	 
	 
	 

	Total Funded Debt:
	 
	 
	 

	Revolver:
	 
	 
	 

	Term Loan:
	 
	 
	 

	Total Funded Debt:
	 
	 
	 

	Less Debt Repayment
	 
	 
	 

	Total Remaining Debt
	 
	 
	—

	Net Paydown
	 
	 
	 

	 
	 
	 
	 

	Total Cash to DRC
	 
	 
	 

	Leasing Expense (Diamond)  - Cash
	 
	 
	 

	Loan Portfolio
	 
	 
	 

	G&A Allocations - intercompany - Cash
	 
	 
	 

	Total
	 
	 
	—

	 
	 
	 
	 

95

EXHIBIT G

FORM OF STATEMENT OF ACCUMULATED CASH

Date:    ________________

	
		
	Accumulated Restricted Cash as of __________________ (prior month)
	$_________________

	 
	 

	Accumulated Restricted Cash as of __________________ (current month)
	$_________________

96

EXHIBIT H

WELLINGTON LENDERS; ALLOCATION OF FEES

	
		
	WELLINGTON LENDER
	CLOSING FEE

	1.  Quissett Partners, L.P.
	$34,729

	2.  Quissett Investors (Bermuda) L.P.
	$45,096

	3.  Bay Pond Partners, L.P.
	$65,900

	4.  Bay Pond Investors (Bermuda) L.P.
	$38,049

	5.  Ithan Creek Master Investors (Cayman) L.P.
	$19,922

	6.  Ithan Creek Master Investment Partnership (Cayman) II, L.P.
	$3,829

	 
	Total $207,524

    

97DR - 6.30.2012 - Ex 10.3

EXHIBIT 10.3
NEVADA OFFICE LEASE

CROSSING BUSINESS CENTER 6

THIS LEASE is made and entered into as of  ____June 1, 2012________________   by and between 1450 CENTER CROSSING DRIVE, LLC, a Delaware limited liability company  ("Landlord") and DIAMOND RESORTS CORPORATION, a Maryland corporation ("Tenant").

          In consideration of the rents hereinafter reserved and the agreements hereinafter set forth, Landlord and Tenant mutually agree as follows:

1.   SUMMARY OF TERMS.

The following is a summary of the principal terms of the Lease.  Any capitalized term set forth below shall, for the purposes of this Lease, have the meaning ascribed to it in this Section 1.

A.    Description of Premises

(1)  Building:  The office building known as Crossing Business Center 6 located at 1450 Center Crossing Center Road, Las Vegas, Nevada, 89144. 

(2)  Premises:  Approximately 52,975 square feet of Rental Area and 49,406 square feet of Useable Area comprised of two (2) floors of the Building, Suite 100 and identified as follows:

Area A Premises: 25,852 square feet of Rental Area on the first floor, as shown on Schedule A.
Area B Premises: 14,375 square feet of Rental Area on the second floor, as shown on Schedule A-1
Area C Premises: 12,748 square feet of Rental Area on the second floor, as shown on Schedule A-2

Except as otherwise specifically referred to herein as Area A Premises, Area B Premises or Area C Premises, all references to the term Premises in this Lease shall refer to all areas collectedly which shall be delivered to Tenant in accordance herewith

(3)  Property: The Building, the land upon which the Building is situated, the Common Area, and such additional facilities in subsequent years as may be determined by Landlord to be reasonably necessary or desirable for the management, maintenance or operation of the Building.

(4)  Declaration: Those certain Covenants, Conditions and Restrictions for The Crossing Business Center dated November 4, 1993 and filed for record with the County Recorder of Clark County, Nevada ("County Recorder") in Book 931105 as Instrument No. 00582, as amended from time to time.

(5)  Business Community:  All of the property owned by Landlord or a subsidiary or affiliate of Landlord within the Summerlin area.

B.    Rent

(1)(a) Annual Basic Rent for Area A Premises: Effective as of the Rental Commencement Date of Area A Premises, the Annual Basic Rent payable by Tenant shall be as follows:

1

PSF    Annual    Monthly
Period    Basic Rent    Basic Rent    Installment
Months 1-2:    $0.00    $0.00    $0.00
Months 3-12:    $20.40    $527,380.80    $43,948.40
Months 13-14:    $0.00    $0.00    $0.00
Months 15-24    $21.01    $543,202.22    $45,266.85
Month 25:    $0.00    $0.00    $0.00
Months 26-36:    $21.64    $559,498.29    $46,624.86
Month 37:    $0.00    $0.00    $0.00
Months 38-48:    $22.29    $576,283.24    $48,023.60
Month 49:    $0.00    $0.00    $0.00
Months 50-60:    $22.96    $593,571.74    $49,464.31
Month 61:    $0.00    $0.00    $0.00
Months 62-72:    $23.65    $611.378.89    $50,948.24
Months 73-76:    $24.36    $629,720.26    $52,476.69

Tenant shall not be liable for the payment of Annual Basic Rent for the 1st,  2nd,  13th,  14th 25th, 37th, 49th and 61st leasehold months of the Term. 

(1)(b)  Annual Basic Rent for Area B Premises: In addition to the Annual Basic Rent payable on Area A Premises, effective as of Effective Date for Area B Premises, defined in Section 4.3., the Annual Basic Rent payable by Tenant shall be as follows

PSF    Annual    Monthly
Period    Basic Rent    Basic Rent    Installment
Months 1-5:    $20.40    $293,250.00    $24,437.50
Months 6-7    $0.00    $0.00    $0.00
Months 8 –17:    $21.01    $302,047.50    $25,170.63
Month 18:    $0.00    $0.00    $0.00
Months 19-29:    $21.64    $311,108.93    $25,925.74
Month 30:    $0.00    $0.00    $0.00
Months 31-41:    $22.29    $320.442.20    $26,703.52
Month 42:    $0.00    $0.00    $0.00
Months 43-53:    $22.96    $330,055.47    $27,504.62
Month 54:    $0.00    $0.00    $0.00
Months 55-65:    $23.65    $339,957.13    $28,329.76
Months 66-69:    $24.36    $350,155.84    $29,179.65

Tenant shall not be liable for the payment of Annual Basic Rent for the 6th,  7th,  18th ,  30th,, 42nd, and the 54th leasehold months of the Term. 

(1)(c)  Annual Basic Rent for Area C Premises: In addition to the Annual Basic Rent payable on Area A Premises and Area B Premises, effective as of Effective Date for Area C Premises, defined in Section 4.4., the Annual Basic Rent payable by Tenant shall be as follows

PSF    Annual    Monthly
Period    Basic Rent    Basic Rent    Installment
Months 1-6:    $21.01    $267,835.48    $22,319.62
Month 7:    $0.00    $0.00    $0.00
Months 8 –18:    $21.64    $275,870.54    $22,989.21
Months 19:    $0.00    $0.00    $0.00
Months 20-30:    $22.29    $284,146.66    $23,678.89
Months 31:    $0.00    $0.00    $0.00

2

Months 32-42:    $22.96    $292,671.06    $24,389.29
Month 43:    $0.00    $0.00    $0.00
Months 44-54:    $23.65    $301,451.19    $25,120.93
Months 55-58:    $24.36    $310,494.73    $25,874.56

Tenant shall not be liable for the payment of Annual Basic Rent for the 7th,  19th,  31st, 43rd leasehold months of the Term. 

(2)  Advance Rent:  Forty-Three Thousand Nine Hundred Forty-Eight Dollars and 40/100 ($43,948.40) representing the installment of Annual Basic Rent for the third leasehold month of the Term.

(3)  Security:  

(a) Cash Security Deposit: Forty-Three Thousand Nine Hundred Forty-Eight Dollars and 40/100 ($43,948.40) to be held in accordance with Section 6.4. of this Lease.

(b) Other: None.

C.    Adjustments. 

(1)  Base Operating Costs:  The Base Operating Costs for the Premises shall be the Operating Costs for the Operating Year which commences January 1, 2013 and ends December 31, 2013, multiplied by Tenant's Fractional Share.

    
D.    Term

(1)  Term:  Six (6) years, four (4) months, subject to Section 4.

(2)  Lease Commencement Date:  The date of full execution of this Lease by Landlord and Tenant.

(3)(a)  Rental Commencement Date for Area A Premises:  the date the Premises are Ready for Occupancy, as set forth in Section 4.2, but in no event later than September 1, 2012.

(3)(b) Rental Commencement Date for Area B Premises:  is set forth in Section 4.3, but in no event later than March 1, 2013.

(3)(c) Rental Commencement Date for Area C Premises:  is set forth in Section 4.4, but in no event later than October 1, 2014.

(4)  Termination Date:  Seventy-Six (76) months after the Rental Commencement Date, subject to Section 4.

E.    Notice and Payment

(1)  Tenant Notice Address:
Diamond Resorts
10600 West Charleston Blvd
Las Vegas, NV 89135

(2)  Landlord Notice Address:
Kevin Budny, Portfolio Manager

3

Grubb & Ellis Management Services, Inc.
10000 W Charleston Boulevard, Suite 260
Las Vegas, Nevada 89135
Direct: 702.233.8725  Fax: 702.233.8588
            

with copies to:

1450 Center Crossing Drive, LLC      
c/o General Growth Properties, Inc.
                            10440 Little Patuxent Parkway
                            Columbia, Maryland 21044
                            
General Growth Properties, Inc.
                           110 North Wacker Drive
                           Chicago, Illinois 60606
                           Attention:  General Counsel

(3)  Landlord Payment Address:
1450 Center Crossing Drive, LLC              
SDS-12-2866
PO Box 86
Minneapolis, MN  55486-2866

F.    Broker
Grubb & Ellis | Las Vegas
3930 Howard Hughes Parkway
Suite 180
Las Vegas, NV 89169

2.   DEFINITIONS.

For purposes of this Lease, the Schedules attached and made a part hereof and all agreements supplemental to this Lease, the following terms shall have the respective meanings as set forth in the following Section, subsection, paragraph and Schedule references:

Reference

Additional Rent    6.3
Advance Rent    1.B.
Alterations    15.1
Annual Basic Rent    1.B
Bankruptcy Code    19.1
Building    1.A
Casualty    17.1
Common Area    10.1
Default Rate    6.5
Event of Default    20.1
Event of Tenant's Bankruptcy    19.1
Insolvency Laws    19.1
Landlord Notice Address    1.E

4

Landlord Payment Address    1.E
Lease Commencement Date    1.D
Mortgage    27
Mortgagee    27
Premises    1.A
Public Areas    Schedule C
Renewal Term    4.3
Rental Area    3
Rental Year    6.1
Rules and Regulations    9
Tenant Allowance    5.1
Tenant Improvements    5.1
Tenant Notice Address    1.E
Tenant's Personal Property    15.3
Term    4.1
Termination Date    1.D
Transfer    25

3.  LEASED PREMISES; MEASUREMENT.

 Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises as shown on the plan attached hereto as Schedule A, together with the right to use the Common Area.  

4.  TERM AND COMMENCEMENT OF TERM.

4.1.  Term.  This Lease shall be effective and binding on the parties as of the Lease Commencement Date. The term of this Lease (the "Term") and Tenant’s obligation to pay rental hereunder shall commence on the Rental Commencement Date, which shall be the earlier of:

a.  the date on which Tenant commences the operation of its business, or

b.  the date the Premises are Ready for Occupancy;

and, if necessary, the Termination Date shall be adjusted to effect the total number of years in the Term, as set forth in Section 1.D(1). plus the part of the month, if any, from the adjusted Rental Commencement Date to the first full month of the Term.

In the event the Premises are not Ready for Occupancy by the Rental Commencement Date, as initially set forth in Section 1.D(3) above, because of a delay caused by Tenant, then said Rental Commencement Date shall not be delayed and Tenant's obligations shall commence as of said date, notwithstanding the status of construction.

The Term shall be for the period of time specified in subsection 1.D.(1) plus the part of the month, if any, from the Rental Commencement Date to the first day of the first full calendar month in the Term, unless earlier terminated pursuant to any other provision of this Lease or pursuant to law.  At Landlord's request, Tenant shall promptly enter into one or more supplementary written agreements, in such form as Landlord shall reasonably prescribe, specifying the Rental Commencement Date and the Termination Date.

4.2.  Ready For Occupancy.  For purposes hereof, the Premises shall be deemed conclusively ready for occupancy ("Ready for Occupancy") upon the completion of the following conditions:

a.  Tenant has substantially completed its work on the Tenant's Improvements except for punch 

5

list items; and

b.  Tenant shall have received any governmental approvals which are necessary in order for Tenant to occupy the Premises, unless Tenant's acts or omissions have caused such approvals to be denied, in which case Tenant shall be deemed to have waived this condition 4.2.b.

4.3. First Expansion Area of Area B Premises. Effective as of earlier of: Tenant commences the operation of its business or Tenant has substantially completed its work on the Tenant's Improvements except for punch list items and has received any governmental approvals which are necessary in order for Tenant to occupy the Premises, unless Tenant's acts or omissions have caused such approvals to be denied, in which case Tenant shall be deemed to have waived this condition, but in no event later than March 1, 2013 (the "Effective Date for Area B Premises"), the Premises shall be expanded by the addition of an area containing 14,375 square feet of Rental Area on the second floor of the Building and identified on Schedule A-1 attached hereto and made a part hereof ("Area B Additional Premises"), effecting, therefore, a total Rental Area of 40,227 square feet as also identified on Schedule A-1.  As of the Effective Date for Area B Premises, Schedule A-1 shall supersede and replace the Schedule A attached to the Lease and thereafter all references to the Premises contained in the Lease shall refer to the Premises as hereby increased in size and identified above.

4.4. Second Expansion Area of Area C Premises. Effective as of earlier of: Tenant commences the operation of its business or Tenant has substantially completed its work on the Tenant's Improvements except for punch list items and has received any governmental approvals which are necessary in order for Tenant to occupy the Premises, unless Tenant's acts or omissions have caused such approvals to be denied, in which case Tenant shall be deemed to have waived this condition, but in no event later than October 1, 2014 (the "Effective Date for Area C Premises"), the Premises shall be expanded by the addition of an area containing 12,748 square feet of Rental Area on the second floor of the Building and identified on Schedule A-2 attached hereto and made a part hereof ("Area C Additional Premises"), effecting, therefore, a total Rental Area of 52,975 square feet as also identified on Schedule A-2.  As of the Effective Date for Area C Premises, Schedule A-2 shall supersede and replace the Schedule A-1 attached to the Lease and thereafter all references to the Premises contained in the Lease shall refer to the Premises as hereby increased in size and identified above.

4.5.  Option to Renew.  Provided Tenant is in possession of the Premises and is not in default of any term, covenant or condition of this Lease, Tenant shall have the option to renew the Term of this Lease for one (1) additional period of five (5) years ("Renewal Term") to commence immediately upon the expiration of the initial Term.

Said Renewal Term shall be upon the same terms, covenants and conditions as contained in this Lease, except that (i) the Annual Basic Rent during said Renewal Term shall be at the "Prevailing Market Rate", (ii) there shall be no further option to renew except as specifically provided herein, (iii) there shall be no abatement of rent, and (iv) Landlord shall not be obligated to construct, pay for or grant an allowance with respect to tenant improvements unless otherwise specifically provided for in this Lease.  "Prevailing Market Rate" shall mean the current market rental rate for similar office buildings located in the Summlerlin area at the time Tenant exercises its option to renew. 

In order to exercise the option granted herein, Tenant shall notify Landlord, in writing, no earlier than twelve (12) months nor later than nine (9) months prior to the expiration of the initial Term that it is considering exercising its option to renew the Term.  On receipt of such notice, Landlord will, in writing, not later than thirty (30) days after receipt of the notice from Tenant, quote to Tenant what the new Annual Basic Rent will be for the ensuing Renewal Term (“Prevailing Market Rate Notice”).  Tenant shall then notify Landlord, in writing, not later than fifteen (15) days after notice received of such Prevailing Market Rate Notice, as to whether or not it will exercise the option herein granted and if no such notice of exercise of the option is received, the option shall be deemed waived.  In the event Tenant exercises the option, Landlord and Tenant shall execute a modification to this Lease acknowledging such renewal and setting forth the new Annual Basic Rent.  

6

In the event Tenant notifies Landlord in writing, on or before the fifteenth (15th) day following Tenant’s receipt of the Prevailing Market Rate Notice that Tenant reasonably disagrees with any such determination, Landlord and Tenant shall negotiate in good faith to determine a mutually acceptable Prevailing Market Rate within twenty (20) days thereafter.  In the event the parties are unable to agree upon the applicable Prevailing Market Rate within said twenty (20) day period, Landlord’s determination shall be deemed conclusive and the renewal option shall be null and void. Tenant shall have no further remedies, at law or in equity, to challenge Landlord’s determination.

The option shall be void if, at the time of exercise of such option, Tenant is not in possession of the Premises or if there is an Event of Default under this Lease or if Tenant fails to deliver the requisite notice thereof within the time period specified above.  The option granted herein shall not be severed from this Lease, separately sold, assigned or transferred.

5.  TENANT IMPROVEMENTS AND ACCEPTANCE OF PREMISES.

5.1.  Tenant Improvements.  Landlord hereby grants to Tenant the right to make improvements to the Premises (“Tenant Improvements”)which shall be mutually agreed upon by Landlord and Tenant. Prior to the commencement of the work for the Tenant Improvements, Tenant shall (a) obtain Landlord’s written approval, which approval shall not be unreasonably withheld or delayed, of comprehensive plans and specifications for such work (the “Plans and Specifications”), (b) obtain Landlord’s approval of Tenant’s general contractor; (c) deposit with Landlord all policies or certificates of insurance required by the provisions of Section 16 of the Lease; and (d) have in its possession the permits and licenses necessary for the Tenant Improvements.  Tenant shall conduct its work for the Tenant Improvements in the Premises in accordance with the Construction Regulations attached as Schedule D and shall proceed diligently to complete the Tenant Improvements. 
  
Notwithstanding approval of the Plans and Specifications by Landlord, Tenant shall not be entitled to rely upon such approval as assurance that the Plans and Specifications comply with all applicable codes, rules, regulations and guidelines of all appropriate governmental agencies.

Any other initial improvements to the Premises not shown on the Plans and Specifications are subject to Landlord's prior written approval and such improvements shall be performed by Landlord, and the cost thereof shall be paid by Tenant to Landlord within thirty (30) days following receipt of an invoice for same from Landlord.  

  Landlord agrees to bear the cost of the Tenant Improvements in an amount not to exceed One Million Four Hundred Eighty-Two Thousand One Hundred Eighty Dollars and 00/100 ($1,482,180.00) (“Tenant Allowance”) based on 49,406 useable square feet, which shall include design, permitting, construction, and project supervision costs of the Tenant Improvement, IT wiring, moving costs, and a parking lot security gate. After the completion of the Tenant Improvements, any unused Tenant Allowance can be used toward the construction costs for the Additional Parking, as set forth in Section 34.21, located directly adjacent to the Building. Tenant shall be responsible for the data and telephone wiring and termination within the Premise. Payment shall be as follows: 

		
	1.
	During the initial construction phase and upon Tenant’s request, Landlord agrees to reimburse Tenant an amount not to exceed Nine Hundred Eighty-Eight Thousand One Hundred Twenty Dollars and 00/100 ($988,120.00), pursuant to a separate mutually agreed upon document which shall outline the draw schedule and the requirements of each draw. 

		
	2.
	At the end of the first Rental Year,  Landlord agrees to reimburse Tenant within thirty (30) days of a request for payment an amount not to exceed Two Hundred Forty-Seven Thousand Thirty Dollars and 00/100 ($247,030.00) upon receiving delivery of certification in writing by Tenant that construction of 50% of the Tenant Improvements have been completed, lien free and in manner required under this Lease, and upon presentation to Landlord, in form and detail reasonably satisfactory to Landlord, the following: (a) copies of invoices and receipts for work done and all sums paid for the Tenant Improvements and (b) interim mechanics’ lien waivers executed by all of Tenant’s 

7

contractors, subcontractors and materialmen performing work in or supplying materials to the Premises on Tenant’s behalf for the Tenant Improvements.

		
	3.
	At the end of the second Rental Year,  Landlord agrees to reimburse Tenant within thirty (30) days of a request for payment an amount not to exceed Two Hundred Forty-Seven Thousand Thirty Dollars and 00/100 ($247,030.00), a sum equal to the remaining 50% of the Tenant Allowance, upon receiving delivery of certification in writing by Tenant that the Tenant Improvements have been completed, lien free and in manner required under this Lease, and upon presentation to Landlord, in form and detail reasonably satisfactory to Landlord, the following:  (a) copies of invoices and receipts for work done and all sums paid for the Tenant Improvements and (b) final mechanics’ lien waivers executed by all of Tenant’s contractors, subcontractors and materialmen performing work in or supplying materials to the Premises on Tenant’s behalf for the Tenant Improvements.

  
5.2.  Acceptance of Premises.  Landlord shall deliver, and Tenant agrees to accept, the Premises in its “as-is” condition as of the Rental Commencement Date and shall be solely responsible for all non-building standard improvements and alternations previously installed in the Premises. By occupying the Premises as of the Rental Commencement Date, Tenant shall be deemed to have (a) accepted the Premises in its present condition, (b) acknowledged that the Premises is suitable for Tenant’s intended use, and (c) agreed that Landlord shall not be required to make any improvements to the Premises. 

6.   RENT.

6.1.  Annual Basic Rent.   Tenant shall pay to Landlord during each Rental Year of the Term fixed rent equal to the Annual Basic Rent as set forth in subsection 1.B.(1)(a), (b) and (c), as applicable.   Annual Basic Rent shall be payable in advance on the first day of each month of the Term in equal monthly installments, without notice, demand, abatement (except as otherwise specifically provided in this Lease), deduction or set‐off.  If the Term of this Lease shall commence on a day other than the first day of a month, the first payment shall include any prorated Annual Basic Rent for the period from the Rental Commencement Date for Area A Premises, Area B Premises and Area C Premises, as applicable, to the first day of the first full calendar month of the Term.

"Rental Year" shall mean each successive twelve (12) calendar month period occurring during the Term of this Lease, or portion of such a period, with the first Rental Year commencing as of the Rental Commencement Date and ending on the last day of the twelfth full calendar month thereafter and the last Rental Year ending on the Termination Date.  For any Rental Year of less or more than twelve full months, Annual Basic Rent shall be adjusted accordingly.  All Annual Basic Rent and Additional Rent shall be paid to Landlord at the Landlord Payment Address.

6.2.  Intentionally Omitted.  

6.3.  Additional Rent.  Tenant shall pay to Landlord as additional rent ("Additional Rent") all other sums of money which shall become due and payable hereunder.  Unless a date for payment is otherwise specified herein, all Additional Rent shall be due and payable within thirty (30) days of invoicing by Landlord.

6.4  Advance Rent; Security.

          A.  Advance Rent.  Tenant shall, upon execution of this Lease, pay to Landlord an amount equal to the Advance Rent which shall be held by Landlord as security for the performance by Tenant of all of its obligations occurring prior to the Rental Commencement Date.  If Tenant shall default in the performance of such obligations, Landlord may retain the Advance Rent as an offset against any damages thereby incurred by Landlord provided that the retention of such Advance Rent shall not preclude Landlord from pursuing any other remedy which it might have against Tenant.  If no default shall occur by Tenant then the Advance Rent shall be applied against the installment of Annual Basic Rent payable for the month identified in subsection 1.B.(2).

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B.  Security.  Tenant shall, upon execution of this Lease, deposit with Landlord the cash Security Deposit to assure Tenant's performance of all terms, provisions and conditions of this Lease.  Landlord shall have the right, but not the obligation, at any time, to apply the Security Deposit to cure any breach by Tenant under this Lease and, in that event, Tenant shall immediately pay Landlord any amount necessary to restore the Security Deposit to its original amount.  To the extent permitted by law, Landlord shall be entitled to the full use of the Security Deposit and shall not be required either to keep the cash Security Deposit in a separate account or to pay interest on account thereof.  Any portion of the Security Deposit which is not utilized by Landlord for any purpose permitted under this Lease shall be returned to Tenant within sixty (60) days after the end of the Term provided Tenant has performed all of the obligations imposed upon Tenant pursuant to this Lease.

6.5.  Late Charge.  If Tenant fails to make any payment of Annual Basic Rent, Additional Rent, or other sums required to be paid hereunder on or before the date when payment is due, Tenant shall pay to Landlord, as Additional Rent, a late charge to cover extra administrative costs and loss of use of funds equal to (a) six percent (6%) of the amount due for the first month or portion thereof that such amount is past due plus (b) interest on the amount remaining unpaid thereafter at the rate of twenty‐four percent (24%) per annum; provided, however, that should such late charge at any time violate any applicable law, the late charge shall be reduced to the highest rate permitted by law (the foregoing rate being herein referred to as the "Default Rate").  Landlord's acceptance of any rent after it has become due and payable shall not excuse any delays with respect to future rental payments or constitute a waiver of any of Landlord's rights under this Lease.

7.   OPERATING COST ESCALATIONS.

7.1.  Definitions.  For purposes of this Lease, the following definitions shall apply:

a.  "Operating Year" means each respective calendar year or part thereof during the Term of this Lease or any renewal thereof, or at the option of Landlord, any other twelve-month period or part thereof designated by Landlord during the Term of this Lease or any renewal thereof.

b.  "Property" means the Building, the land upon which the Building is situated, the Common Area, and such additional facilities in subsequent years as may be determined by Landlord to be reasonably necessary or desirable for the management, maintenance or operation of the Building.

c.  "Operating Costs" means all expenses and costs (but not specific costs which are allocated or separately billed to and paid by specific tenants) of every kind and nature which Landlord shall pay or become obligated to pay because of or in connection with owning, operating, managing, painting, repairing, insuring and cleaning the Property, including, but not limited to, the following:
    
(i)    cost of all equipment purchased or rented which is utilized in the performance of Landlord's obligations hereunder, and the cost of maintenance and operation of any such equipment;

(ii)    cost of all maintenance and service agreements for the Property and the equipment therein, including, without limitation, security service, window cleaning, and elevator maintenance;

(iii)    accounting costs, including the cost of audits by certified public accountants, outside legal and engineering fees and expenses incurred in connection with the operation and management of the Property;

(iv)    wages, salaries and related expenses including the costs of all on‐site and off‐site agents or employees engaged in the operation, maintenance, security and management of the Property; provided, however, the wages, salaries and related expenses of any agents or employees not exclusively engaged in the operation, maintenance, security and management of the Property shall be apportioned as deemed appropriate by Landlord;

(v)    cost of repairs, replacements and general maintenance to the Property, including 

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without limitation the mechanical, electrical and heating, ventilating and air‐conditioning equipment and/or systems (excluding alterations attributable solely to tenants, capital improvements unless they are included under c(x), and repairs and general maintenance paid by proceeds of insurance or by tenants or other third parties);

(vi)    any and all Common Area maintenance, repair or redecoration (including repainting) and exterior and interior landscaping;

(vii)    cost of removal of trash, rubbish, garbage and other refuse from the Property as well as removal of ice and snow from the sidewalks on or adjacent to the Property;

(viii)    all charges for common area electricity, gas, water, sewerage service, heating, ventilation and air‐conditioning and other utilities furnished to the Property (including legal, architectural and engineering fees incurred in connection therewith);

(ix)    amortization of capital improvements made to the Building after the year of substantial completion of the Building, which improvements were undertaken by Landlord with the reasonable expectation that the same would result in more efficient operation of the Building or are made by Landlord pursuant to any governmental law, regulation or action not applicable to the Building at commencement of construction of the Building; provided that the cost of each such capital improvement, together with any financing charges incurred in connection therewith, shall be amortized over the useful life thereof and only that portion attributable to each Operating Year shall be included herein for such Operating Year;

(x)    a management fee for the operation and management of the Property;

(xi)    costs and expenses incurred in order to comply with covenants and conditions contained in liens, encumbrances and other matters of public record affecting the Property; 

(xii)    cost of all insurance coverage for the Property from time to time maintained by Landlord, including but not limited to the costs of premiums for insurance with respect to personal injury, bodily injury, including death, property damage, business interruption, workmen's compensation insurance covering personnel and such other insurance as Landlord shall deem necessary, which insurance Landlord may maintain under policies covering other properties owned by Landlord in which event the premium shall be reasonably allocated; and

(xiii) costs of all supplies and materials used, and labor charges incurred, in the operation, maintenance, decoration, repair and exterior cleaning of the Building and Property but excluding interior janitorial services of the Building within the entire 52,975 square feet of Rental Area leased to the Tenant, as Tenant is responsible for their own janitorial services.
 
Any of the foregoing costs which under generally accepted accounting principles would be considered capital expenditures shall be amortized in accordance with generally accepted accounting principles. 

Notwithstanding the above, Operating Costs shall not include (a) payments of principal and interest on any mortgages, deeds of trust or other financing instruments relating to the financing of the Property, (b) leasing commissions or brokerage fees, and (c) costs associated with preparing, improving or altering for space for any leasing or releasing of any space within the Building.

For any Operating Year during which less than ninety‐five percent (95%) of the Rental Area of the Building  is occupied, the calculation of that portion of Operating Costs which vary with occupancy shall be adjusted to equal the Operating Costs which Landlord projects would have been incurred had the Building been ninety‐five percent occupied during such Operating Year.

d. "Fractional Share" shall mean a fraction, the numerator of which is the Rental Area of the 

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Premises and the denominator of which is the total Rental Area of the Building.  For the purposes of this subparagraph, the Rental Area of the Building shall mean the sum of the Rental Area of all floors of the Building as determined by Landlord.

e.  "Taxes" shall mean all real estate taxes, assessments (special or otherwise), levies, ad valorem charges, benefit charges, water and sewer rents, rates and charges, privilege permits and any other governmental liens, impositions or charges of a similar or dissimilar nature, and any payments in lieu of such charges, regardless of whether any such items shall be extraordinary or ordinary, general or special, foreseen or unforeseen, levied, assessed, or imposed on or with respect to all or any part of the Property or upon the rent due and payable hereunder by any governmental authority (all of the aforesaid being hereinafter referred to as "Taxes"); provided, however, that if at any time during the Term or any extension thereof the method of taxation prevailing at the commencement of the Term shall be altered or eliminated so as to cause the whole or any part of the above items which would otherwise be included in Taxes to be replaced by a levy, assessment or imposition, which is (A) a tax assessment, levy, imposition or charge based on the rents received from the Property whether or not wholly or partially a capital levy or otherwise, or (B) a tax, assessment, levy, imposition or charge measured by or based in whole or in part upon all or any portion of the Property and imposed on Landlord, or (C) a license fee measured by the rent payable by Tenant to Landlord, or (D) any other tax, levy, imposition, charge or license fee, however described or imposed, then such levy, assessment or imposition shall be included in Taxes; provided, however, in no event shall Tenant be required to pay any inheritance, estate, succession, income, profits or franchise taxes unless they are in lieu of or in substitution for any of the above items which would otherwise be included in Taxes.

7.2.  Payment of Operating Cost Escalation.  For each Operating Year, commencing January 1, 2014, Tenant shall pay to Landlord, in the manner provided herein, Tenant's share of increased Operating Costs which shall be computed by multiplying the Operating Costs for the Operating Year by Tenant's Fractional Share and subtracting the Base Operating Costs from the result obtained ("Tenant's Share of Increased Operating Costs") but in no event less than the Base Operating Costs; provided, however, that for the Operating Years during which the Term begins and ends, Tenant's Share of Increased Operating Costs shall be prorated based upon the actual number of days Tenant occupied, or could have occupied, the Premises during each such Operating Year. Base Operating Costs for the purposes of this Lease shall be the Operating Year 2013.

Tenant's Share of Increased Operating Costs shall be paid, in advance, without notice, demand, abatement (except as otherwise specifically provided in this Lease), deduction or set‐off, on the first day of each calendar month during the Term, said monthly amounts to be determined on the basis of estimates prepared by Landlord on an annual basis and delivered to Tenant prior to the commencement of each Operating Year.  If, however, Landlord fails to furnish any such estimate prior to the commencement of an Operating Year, then (a) until the first day of the month following the month in which such estimate is furnished to Tenant, Tenant shall pay to Landlord on the first day of each month an amount equal to the monthly sum payable by Tenant to Landlord under this subsection 7.2 in respect of the last month of the preceding Operating Year; (b) promptly after such estimate is furnished to Tenant, Landlord shall give notice to Tenant whether the installments of Tenant's Share of Increased Operating Costs paid by Tenant for the current Operating Year have resulted in a deficiency or overpayment compared to payments which would have been paid under such estimate, and Tenant, within ten (10) days after receipt of such estimate, shall pay any deficiency to Landlord and any overpayment shall be credited against future payments required by Tenant under such estimate; and (c) on the first day of the month following the month in which such estimate is furnished to Tenant and monthly thereafter throughout the remainder of the Operating Year, Tenant shall pay to Landlord the monthly payment shown on such estimate.  Landlord may at any time or from time to time furnish to Tenant a revised estimate of Tenant's Share of Increased Operating Costs for such Operating Year, and in such case, Tenant's monthly payments shall be adjusted and paid or credited, as the case may be, substantially in the same manner as provided in the preceding sentence.

After the end of each Operating Year, Landlord shall determine actual Operating Costs for such Operating Year and shall provide to Tenant an "Operating Costs Statement" setting forth the actual Tenant's Share of Increased Operating Costs for such Operating Year.  Within thirty (30) days after delivery of the Operating Costs Statement, Tenant shall pay Landlord any deficiency between the amount shown as Tenant's Share of Increased Operating 

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Costs in the Operating Costs Statement and the total of the estimated payments made by Tenant during the Operating Year.  In the event of overpayment, such amount shall be credited against future payments required on account of Tenant's Share of Increased Operating Costs, or if the Term has expired, Landlord shall refund to Tenant the amount of any overpayment.

Each Operating Costs Statement provided by Landlord shall be conclusive and binding upon Tenant unless within thirty (30) days after receipt thereof, Tenant notifies Landlord that it disputes the correctness thereof, specifying those respects in which it claims the Operating Costs Statement to be incorrect.  Unless resolved by the parties, such dispute shall be determined by arbitration in accordance with the then prevailing rules of the American Arbitration Association.  If the arbitration proceedings result in a determination that the Operating Costs Statement contained an aggregate discrepancy of less than five percent (5%), Tenant shall bear all costs in connection with such arbitration.  Pending determination of the dispute, Tenant shall pay any amounts due from Tenant in accordance with the Operating Costs Statement, but such payment shall be without prejudice to Tenant's claims.  Tenant, for a period of thirty (30) days after delivery of the Operating Costs Statement in each Operating Year and upon at least ten (10) days written notice to Landlord, shall have reasonable access during normal business hours to the books and records of Landlord relating to Operating Costs for the purpose of verifying the Operating Costs Statement, Tenant to bear all costs relating to such inspection.  Tenant shall reimburse Landlord for any cost for photocopying that it desires.

8.   USE, CARE AND REPAIR OF PREMISES BY TENANT. 

8.1.  Permitted Uses.  Tenant shall use and occupy the Premises solely for a customer call center and general office purposes in accordance with applicable zoning regulations, the Declaration or any other recorded covenants, conditions or restrictions affecting the Building and for no other purpose.  Tenant shall not do anything or permit anything to be done in or on the Premises, or bring or keep anything therein which will, in any way, obstruct, injure, annoy or interfere with the rights of Landlord or other tenants, or subject Landlord to any liability for injury to persons or damage to property, or interfere with the good order of the Building, or conflict with the laws, rules or regulations of any Federal, state, city or local authority.

8.2.  Care of Premises.  Tenant shall, at its sole expense, keep the Premises and the improvements and appurtenances therein in good order and condition consistent with the operation of a first‐class office building, and at the expiration of the Term, or at the sooner termination of this Lease as herein provided, deliver up the same broom clean and in as good order and condition as at the beginning of the Term, ordinary wear and tear and damage by fire or other casualty excepted.  Tenant, at its sole expense, shall promptly replace damaged or broken doors and glass in and about the interior of the Premises and shall be responsible for the repair and maintenance of all special or custom Tenant Improvements and Alterations, including, without limitation, the repair and replacement of appliances and equipment installed specifically for Tenant such as refrigerators, disposals, computer room air conditioning, sinks and special plumbing, special light fixtures and bulbs for those fixtures, non‐standard outlets and plug‐in strips, and special cabinetry.  Consistent with the provisions of Section 22, Tenant shall pay for all property damage sustained by other tenants or occupants of the Building, due to any waste, misuse or neglect by Tenant of the Premises and any fixtures and appurtenances related thereto or due to any breach of this Lease by Tenant, its employees, agents, representatives or invitees.

8.3.    Hazardous Materials.

		
	(a)
	"Hazardous Material(s)" means any substance that, by itself or in combination with other materials, is either (i) potentially injurious to public health, safety, or the environment; or (ii) now or in the future regulated by any federal, state, or local governmental authority as potentially injurious to public health, safety, or the environment.

		
	(b)
	With the exception of minor amounts of Hazardous Materials  customarily and lawfully used in conjunction with the Permitted Use, Tenant, its employees, contractors, agents, and any party 

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acting on behalf of  Tenant, shall not store, use, treat, generate, or dispose of Hazardous Materials at the Property.

		
	(c)
	Tenant, its employees, contractors, agents, and any party acting on behalf of Tenant shall comply, and shall keep the Premises in compliance, with all laws and regulations relating to Hazardous Materials ("Environmental Laws"); and in addition Tenant shall:

		
	(i)
	Promptly provide Landlord with copies of  any document, correspondence, report or communication, written or oral, relating to Hazardous Materials at or affecting the Property (x) to or from any regulatory body, or (y) stating a basis for any potential liability or responsibility of Tenant, Landlord, or the Property; including all such documents, correspondence, reports or communications prepared by or on behalf of Tenant.  In addition to the above, at Landlord's request, Tenant shall provide copies of any and all records and communications whatsoever relating to Hazardous Materials at or affecting the Property.

		
	(ii)
	Immediately notify Landlord in the event of a suspected or confirmed release of a Hazardous Material or violation of Environmental Laws at or affecting the Property and caused by or related to the operations of Tenant, its employees, contractors, agents, or any party acting on behalf of Tenant and, at Landlord's sole option, either promptly remediate or correct such release or violation  to Landlord's satisfaction or reimburse Landlord's cost of remediation (including reasonable attorneys' and consultants' fees); and compensate Landlord and/or third parties for all resultant damage.

		
	(iii)
	Permit Landlord reasonable access to the Premises for the purpose of conducting an environmental audit or testing, the cost of which shall be borne by Landlord unless the results indicate activity prohibited by Environmental Laws or hereunder.

		
	(iv)
	Upon expiration or other termination of this Lease, remove all Hazardous Materials from the Premises, and at Landlord's option cause to be performed and provided to Landlord an environmental audit of the Premises, using a consultant reasonably acceptable to Landlord, and correct, at its expense, any deficiencies noted by the audit.

		
	(d)
	Landlord shall comply with all Environmental Laws regarding its storage, use, treatment, generation, and disposal of Hazardous Materials, and, if required by law, shall promptly remediate any release of Hazardous Materials or correct any violation of Environmental Laws at or affecting the Property and resulting from such storage, use, treatment, generation or release. 

		
	(e)
	This Section 8.3 shall survive the expiration or other termination of this Lease.

8.4. Compliance with Laws.  Tenant, at its sole cost and expense, shall conform to and comply with and shall cause the Premises to conform to and comply with all federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, and ordinances applicable to Tenant or resulting from Tenant's use or occupancy of the Premises or the Property or any part thereof.

9.   RULES AND REGULATIONS.

Tenant and its agents and invitees shall abide by and observe the rules and regulations attached hereto as Schedule C for the operation and maintenance of the Building or any new rules and regulations which may from time to time be issued by Landlord ("Rules and Regulations"), provided that any new rules or regulations are not inconsistent with the provisions of this Lease.  Nothing in this Lease shall be interpreted to impose upon Landlord 

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any duty or obligation to enforce any such rules and regulations against any other tenant in the Building, and Landlord shall not be liable to Tenant for any violation of these rules and regulations by any other tenant or its agents or invitees.

10.  COMMON AREA.

10.1.  Definition of Common Area.  As used herein, "Common Area" means those areas and facilities which may be furnished by Landlord on or near the Property, as designated by Landlord from time to time, intended for the general common use and benefit of all tenants of the Building and their agents, representatives, Tenants, employees and invitees, including, without limitation, any and all stairs, landings, roofs, utility and mechanical rooms and equipment, service closets, corridors, elevators, lobbies, lavatories and other public areas of the Building and all parking areas, access roads, pedestrian walkways, plazas and landscaped areas.

10.2.  Use of Common Area.  Tenant shall have the non‐exclusive right to use the Common Area in common with Landlord, other tenants in the Building, and others entitled to the use thereof, subject to such reasonable rules and regulations governing the use of the Common Area as Landlord may from time to time prescribe and subject to such easements therein as Landlord may from time to time grant to others.  Tenant shall not obstruct in any way any portion of the Common Area or in any way interfere with the rights of other persons entitled to use the Common Area and shall not, without the prior written consent of Landlord, use the Common Area in any manner, directly or indirectly, for the location or display of any merchandise or property belonging to Tenant or for the location of signs relating to Tenant's operations in the Premises.  The Common Area shall at all times be subject to the exclusive control and management of Landlord.

10.3.  Alterations to the Common Area.  Landlord reserves the right at any time and from time to time (i) to change or alter the location, layout, nature or arrangement of the Common Area or any portion thereof, including but not limited to the arrangement and/or location of entrances, passageways, doors, corridors, stairs, lavatories, elevators, parking areas, and other public areas of the building, and (ii) to construct additional improvements on the Property and make alterations thereof or additions thereto and build additional stories on or in any such buildings or build adjoining same; provided, however, that no such change or alteration shall deprive Tenant of access to the Premises or reduce the Rental Area of the Premises, unless such reduction is required by Federal, State or local laws or regulations, in which event, a reduction in the Premises shall be permitted with a commensurate reduction in rent.  Landlord shall have the right to close temporarily all or any portion of the Common Area to such extent as may, in the reasonable opinion of Landlord, be necessary to prevent a dedication thereof to the public, provided that Tenant is not thereby denied access to the Premises, or for repairs, replacements or maintenance to the Common Area, provided such repairs, replacements or maintenance are performed expeditiously and in such a manner as not to deprive Tenant of access to the Premises.

10.4.  Maintenance.  Landlord covenants to keep, maintain, manage and operate the Common Area in a manner consistent with the operation of a first class office building and to keep the sidewalks and driveways, if any, constituting a portion of the Common Area clean and reasonably clear of snow and ice.  Landlord reserves the right of access to the Common Area through the Premises for the purposes of operation, decoration, cleaning, maintenance, safety, security, alterations and repairs.

11.  HVAC AND JANITORIAL SERVICES.

Landlord, at its sole cost and expense, shall be responsible for the maintenance and repair of the Premises HVAC system which said costs shall be included as part of the Operating Costs.  

Tenant shall also provide daily janitorial services for the Premises throughout the Term of this Lease.  In the event the janitorial services provided by Tenant are deemed by Landlord to be inadequate for or inconsistent with the operation of an office building, Tenant agrees to comply immediately with any request(s) made by Landlord with respect to the provision of janitorial services.  If Tenant fails to comply with Landlord's request, Landlord shall have the right to provide janitorial services to the Premises and Tenant shall pay to Landlord, as 

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Additional Rent, all costs and expenses incurred by Landlord for providing any janitorial services to the Premises within ten (10) days after receipt of an invoice for same from Landlord.

12.  UTILITIES.

The Premises is equipped with separate meters to measure Tenant's usage of electricity consumption in the Premises.  Tenant shall be solely responsible for the payment of all metered electric as of the Rental Commencement Date.  Tenant shall pay, when due, all interior electric charges for such services used on or supplied to the Premises directly to the supplier of such service.  Tenant's obligation to pay all charges for electricity arising during the Term shall survive the termination of this Lease.  Tenant shall, if necessary, pay the cost of the repair and/or replacement of all electric meters which directly service the Premises. 

13.  LOSS, DAMAGE AND INJURY.

To the maximum extent permitted by law, Tenant shall occupy and use the Premises, the Building and the Common Area at Tenant's own risk.  Consistent with the provisions of subsection 16.4, Tenant's Personal Property and personal items of those claiming by, through or under Tenant, located in or on the Premises or the Building shall be and remain at the sole risk of Tenant or such other person.  

No representation, guaranty, assurance, or warranty is made or given by Landlord that the communications or security systems, devices or procedures used, if any, will be effective to prevent injury to Tenant or any other person or damage to, or loss (by theft or otherwise) of any of Tenant's Personal Property or of the property of any other person, and Landlord reserves the right to discontinue or modify at any time such communications or security systems, devices, or procedures without liability to Tenant.

14.  REPAIRS BY LANDLORD.

Landlord shall keep the Premises and the Building and all machinery, equipment, fixtures and systems of every kind attached to, or used in connection with the operation of, the Building, including all electrical, heating, mechanical, sanitary, sprinkler, utility, power, plumbing, cleaning, refrigeration, ventilating, air conditioning and elevator systems and equipment (excluding, however, lines, improvements, systems and machinery for water, gas, steam and electricity owned and maintained by any public utility company or governmental agency or body) in good order and repair consistent with the operation of the Building as a first‐class office building.  Landlord, at its expense, shall make all repairs and replacements necessary to comply with its obligations set forth in the immediately preceding sentence, except for (a) repairs required to be made by Tenant pursuant to Section 8 and (b) repairs caused by the willful misconduct of Tenant, its agents, employees, invitees and guests, which repairs shall be made by Landlord at the cost of Tenant, and for which Tenant shall pay promptly, as Additional Rent, upon receipt of an invoice setting forth the cost of such repairs.  There shall be no abatement in rents due and payable hereunder and no liability on the part of Landlord by reason of any inconvenience or annoyance arising from Landlord's making repairs, additions or improvements to the Building in accordance with its obligations hereunder.

15.  ALTERATIONS, TITLE AND PERSONAL PROPERTY.

15.1.  Alterations.  Tenant shall in no event make or permit to be made any alteration, modification, substitution or other change of any nature to the mechanical, electrical, plumbing, HVAC , and sprinkler systems within or serving the Premises.  After completion of Tenant's Improvements within the Premises, Tenant shall not make or permit any other improvements, alterations, fixed decorations, substitutions or modifications, structural or otherwise, to the Premises or the Building ("Alterations") without the prior written approval of Landlord. Landlord's approval shall include the conditions under which acceptable Alterations may be made.  Alterations shall include, but not be limited to, the installation or modification of carpeting, walls, partitions, counters, doors, shelves, lighting fixtures, hardware, locks, ceiling, window and wall coverings; but shall not include the initial Tenant's Improvements placed within the Premises pursuant to subsection 5.1.  All Alterations shall be based on 

15

complete plans and specifications prepared and submitted by Tenant to Landlord for approval, except in the instance of cosmetic changes, such as painting and carpeting, in which case Tenant shall provide Landlord with samples showing colors, styles, etc.   All Alterations shall be made by Landlord at Tenant's sole cost, payable by Tenant, as Additional Rent, within thirty (30) days after receipt of an invoice for same from Landlord, which cost shall include Landlord's standard construction management fee.

Tenant shall be responsible for the cost of any additional improvements within the Premises or the Common Area required by The Americans with Disabilities Act of 1990 as a result of Tenant's Alterations.

If Tenant makes any Alterations without the prior consent of Landlord, then, in addition to Landlord's other remedies, Landlord may correct or remove such Alterations and Tenant shall pay the cost thereof, as Additional Rent, on demand.

15.2.  Title.  The Tenant Improvements, all Alterations and all equipment, machinery, furniture, furnishings, and other property or improvements installed or located in the Premises by or on behalf of Landlord or Tenant, other than Tenant's Personal Property, (a) shall immediately become the property of Landlord and (b) shall remain upon and be surrendered to Landlord with the Premises as a part thereof at the end of the Term.  Notwithstanding the foregoing, Landlord may, upon notice to Tenant at the time Alterations are made, elect that any Alterations be removed at the end of the Term, and thereupon, Landlord shall at Tenant's sole expense, cause such Alterations to be removed and restore the Premises to its condition prior to the making of such Alterations, reasonable wear and tear excepted.  Tenant shall promptly reimburse Landlord, as Additional Rent, for the cost of such work, which reimbursement obligation shall survive termination of the Lease. 

15.3.  Tenant's Personal Property.  "Tenant's Personal Property" means all equipment, machinery, furniture, furnishings and/or other property now or hereafter installed or placed in or on the Premises by and at the sole expense of Tenant with respect to which Tenant has not been granted any credit or allowance by Landlord and which (a) is not used, or was not procured for use, in connection with the operation, maintenance or protection of the Premises or the Building; (b) is removable without damage to the Premises or the Building; and (c) is not a replacement of any property of Landlord, whether such replacement is made at Tenant's expense or otherwise.  Notwithstanding any other provision of this Lease, Tenant's Personal Property shall not include any Alterations or any improvements or other property installed or placed in or on the Premises as part of Tenant's Improvements, whether or not installed at Tenant's expense.  Tenant shall promptly pay all personal property taxes on Tenant's Personal Property, as applicable.  Provided that Tenant is not then in default of any of its obligations under this Lease, Tenant may remove all Tenant's Personal Property from the Premises at the termination of this Lease.  Any property belonging to Tenant or any other person which is left in the Premises after the date the Lease is terminated for any reason shall be deemed to have been abandoned.  In such event, Landlord shall have the right to declare itself the owner of such property and to dispose of it in whatever manner Landlord considers appropriate without waiving its right to claim from Tenant all expenses and damages caused by Tenant's failure to remove such property, and Tenant shall not have any right to compensation or claim against Landlord as a result.

16.  INSURANCE.

16.1.  Tenant's Insurance.  Tenant, at its expense, shall obtain and maintain in effect as long as this Lease remains in effect and during such other time as Tenant occupies the Premises or any part thereof insurance policies in accordance with the following provisions.

A. Coverage.

(i)  commercial general liability insurance policy, including insurance against assumed or contractual liability under this Lease, with respect to the Property, to afford protection with limits, per occurrence, of not less than Two Million Dollars ($2,000,000), combined single limit, with respect to personal injury, bodily injury, including death, and property damage and Four Million Dollars ($4,000,000) aggregate (occurrence form) ;

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(ii)  all‐risk property insurance policy, including theft, written at replacement cost value and with replacement cost endorsement, covering all of Tenant's Personal Property, Alterations and Tenant Improvements in the Premises, and covering loss of income resulting from casualty.

(iii)  worker's compensation or similar insurance policy offering statutory coverage and containing statutory limits, which policy shall also provide Employer's Liability Coverage of not less than Five Hundred Thousand Dollars ($500,000) per occurrence.

(iv)  Tenant shall require any  General Contractor retained for improvements to the Premises by it to perform work on the Premises to carry and maintain, at no expense to Landlord, during such times as contractor is working in the Premises, a non‐deductible (a) commercial general liability insurance policy, including, but not limited to, contractor's liability coverage, contractual liability coverage, completed operations coverage, broad form property damage endorsement and contractor's protective liability coverage, to afford protection with limits per person and for each occurrence, of not less than Two Million Dollars ($2,000,000), combined single limit, and with respect to personal injury and death and property damage, Four Million Dollars ($4,000,000) aggregate (occurrence form) and Two Million Dollars ($2,000,000) aggregate completed operations; (b) automobile liability insurance in the amount of One Million Dollars ($1,000,000) combined single limit for bodily injury and property damage; (c) worker's compensation insurance or similar insurance in form and amounts as required by law; and (d) any other insurance reasonably required of Tenant by Landlord or any Mortgagee.  The requirements of this Section do not apply to contractors for any routine maintenance or repairs to the Premises.

(v)  Notwithstanding anything set forth above in this subsection 16.1 to the contrary, all dollar limits specified herein shall be increased from time to time as reasonably necessary to effect economically equivalent insurance coverage, or coverage deemed adequate in light of then existing circumstances.

B. Policies.

Such policies shall be maintained with companies licensed to do business in the State where the Premises are located and in form reasonably acceptable to Landlord and will be written as primary policy coverage and not contributing with, or in excess of, any coverage which Landlord shall carry.  Such policies shall be provided on an occurrence form basis unless otherwise approved by Landlord and shall include Landlord and its managing agent as additional insured as to coverage under paragraphs 16.1.A.(i) and 16.1.A.(iv).  Such policies shall also contain a waiver of subrogation provision and a provision stating that such policy or policies shall not be canceled, non‐renewed, reduced in coverage or materially altered except after thirty (30) day's written notice, said notice to be given in the manner required by this Lease to Landlord.  All such policies of insurance shall be effective as of the date Tenant occupies the Premises and shall be maintained in force at all times during the Term of this Lease and all other times during which Tenant shall occupy the Premises.  Tenant shall deposit the policy or policies of such required insurance or certificates thereof with Landlord prior to the Rental Commencement Date.  

16.2.  Tenant's Failure to Insure.  If Tenant shall fail to obtain insurance as required under this Section 16, Landlord may, but shall not be obligated to, obtain such insurance, and in such event, Tenant shall pay, as Additional Rent, the premium for such insurance upon demand by Landlord.

16.3.  Compliance with Policies.  Tenant shall not do or allow to be done, or keep, or allow to be kept, anything in, upon or about the Premises which will contravene Landlord's policies insuring against loss or damage by fire, other casualty, or any other cause, including without limitation, public liability, or which will prevent Landlord from procuring such policies in companies acceptable to Landlord.  If any act or failure to act by Tenant in and about the Building and the Premises shall cause the rates with respect to Landlord's insurance policies to be increased beyond those rates that would normally be applicable for such limits of coverage, Tenant shall pay, as Additional Rent, the amount of any such increases upon demand by Landlord.

16.4.  Waiver of Right of Recovery.  Except as provided in Section 8.3, neither party, including Landlord's managing agent, shall be liable to the other party, including Landlord's managing agent, or to any insurance 

17

company (by way of subrogation or otherwise) insuring the other party, for any loss or damage to any building, structure or other tangible property, or loss of income resulting therefrom, or losses under worker's compensation laws and benefits even though such loss or damage might have been occasioned by the negligence of such party, its agents or employees.  The provisions of this Section 16.4 shall not limit the indemnification for liability to third parties pursuant to Section 22. 

16.5.  Landlord's Insurance.  Landlord shall carry commercial general liability insurance with regard to the Property and all‐risk property insurance on the Property, excluding Tenant Improvements, Alterations and Tenant's Personal Property.  

Landlord shall not be obligated to repair any damage to Tenant's Personal Property or replace the same.

17.  DAMAGE AND DESTRUCTION.

17.1.  Landlord's Obligation to Repair and Reconstruct.  If, as the result of fire, the elements, accident or other casualty (any of such causes being referred to herein as a "Casualty"), the Premises shall be rendered wholly or partially untenantable (damaged to such an extent as to preclude Tenant's use of the Premises for the purposes originally intended), then, subject to the provisions of subsection 17.2, Landlord shall cause such damage to be repaired, including Tenant Improvements and Alterations, and the Annual Basic Rent and Additional Rent (but not any Additional Rent due Landlord either by reason of Tenant's failure to perform any of its obligations hereunder or by reason of Landlord's having provided Tenant with additional services hereunder) shall be abated proportionately as to the portion of the Premises rendered untenantable during the period of such untenantability.  All such repairs shall be made at the expense of Landlord, subject to the availability of insurance proceeds and Tenant's responsibilities set forth herein.  Landlord shall not be liable for interruption to Tenant's business or for damage to or replacement or repair of Tenant's Personal Property, all of which replacement or repair shall be undertaken and completed by Tenant, at Tenant's expense.

If the Premises shall be damaged by Casualty, but the Premises shall not be thereby rendered wholly or partially untenantable, Landlord shall promptly cause such damage to be repaired and there shall be no abatement of rent reserved hereunder.   

17.2.  Termination of Lease.  (A) If the Premises are (1) rendered wholly untenantable, or (2) damaged as a result of any cause which is not covered by Landlord's insurance, or (B) if the Building is damaged to the extent of fifty percent (50%) or more of the gross leasable area thereof, or (C) if, for reasons beyond Landlord's control or by virtue of the terms of any financing of the Building, sufficient insurance proceeds are not available for the reconstruction or restoration of the Building or Premises, then, in any of such events, Landlord may elect to terminate this Lease by giving to Tenant notice of such election within ninety (90) days after the occurrence of such event, or after the insufficiency of such proceeds becomes known to Landlord, whichever is applicable.  If such notice is given, the rights and obligations of the parties shall cease as of the date set forth in such notice, and the Annual Basic Rent and Additional Rent (but not any Additional Rent due Landlord either by reason of Tenant's failure to perform any of its obligations hereunder or by reason of Landlord's having provided Tenant with additional services hereunder) shall be adjusted as of the date set forth in such notice, or, if the Premises were rendered untenantable, as of the date of the Casualty.

17.3.  Demolition of the Building.  If the Building shall be so substantially damaged that it is reasonably necessary, in Landlord's judgment, to demolish the Building for the purpose of reconstruction, Landlord may demolish the same, in which event the Annual Basic Rent and Additional Rent (but not any Additional Rent due Landlord either by reason of Tenant's failure to perform any of its obligations hereunder or by reason of Landlord's having provided Tenant with additional services hereunder) shall be abated to the same extent as if the Premises were rendered wholly untenantable by a Casualty.

17.4.  Insurance Proceeds.  If the Lease is not terminated pursuant to subsection 17.2, Landlord shall, subject to the terms of any Mortgage, disburse and apply any insurance proceeds received by Landlord to the 

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restoration and rebuilding of the Building in accordance with subsection 17.1 hereof.  All insurance proceeds payable with respect to the Premises and the Building shall belong to and shall be payable to Landlord.  Notwithstanding anything to the contrary, Tenant shall be entitled to receive all proceeds payable with respect to Tenant's Personal Property.

18.  CONDEMNATION.

18.1.  Termination.  If either the entire Premises or the Building shall be acquired or condemned by any governmental authority under its power of eminent domain for any public or quasi‐public use or purpose, this Lease shall terminate as of the date of vesting or acquisition of title in the condemning authority and the rents hereunder shall be abated on that date.  If less than the whole but more than fifty percent (50%) of the Rental Area of the Premises or more than fifty percent (50%) of the total area of the Building (even if the Premises are unaffected) or such portion of the Common Area as shall render the Premises or the Building untenantable should be so acquired or condemned, Landlord and Tenant shall each have the option to terminate this Lease by notice given to the other within ninety (90) days of such taking.  In the event that such a notice of termination is given, this Lease shall terminate as of the date of vesting or acquisition of title in the condemning authority and the Annual Basic Rent and Additional Rent (but not any Additional Rent due Landlord either by reason of Tenant's failure to perform any of its obligations hereunder, or by reason of Landlord's having provided Tenant with additional services hereunder) shall be adjusted as of such date.

If (a) neither Landlord nor Tenant shall exercise their respective options to terminate this Lease, as hereinabove set forth, or (b) some lesser portion of the Premises or the Building or Common Area, which does not give rise to a right to terminate pursuant to this subsection 18.1, is taken by the condemning authority, this Lease shall continue in force and effect, but from and after the date of the vesting of title in the condemning authority, the Annual Basic Rent payable hereunder during the unexpired portion of the Term shall be reduced in proportion to the reduction in the total Rental Area of the Premises, and any Additional Rent (but not any Additional Rent due Landlord either by reason of Tenant's failure to perform any of its obligations hereunder, or by reason of Landlord's having provided Tenant with additional services hereunder) payable pursuant to the terms hereof shall be adjusted to reflect the diminution of the Premises and/or the Building, as the case may be.

18.2.  Rights to Award.  Tenant shall have no claim against Landlord arising out of the taking or condemnation, or arising out of the cancellation of this Lease as a result of any such taking or condemnation, or for any portion of the amount that may be awarded as damages as a result of any taking or condemnation, or for the value of any unexpired portion of the Term, or for any property lost through condemnation, and Tenant hereby assigns to Landlord all its right, title and interest in and to any such award with regard to the Premises; provided, however, that, in the event of a total taking, Tenant may assert any claim it may have against the condemning authority for compensation for Tenant's Personal Property lost thereby, loss of income, and for any relocation expenses compensable by statute and receive such awards therefor as may be allowed in the condemnation proceedings provided that such awards shall be made in addition to, and stated separately from, the award made for the Building, the underlying land and the Premises.  Landlord shall have no obligation to contest any taking or condemnation.

19.  BANKRUPTCY.

19.1.  Event of Bankruptcy.  For purposes of this Lease, each of the following shall be deemed an "Event of Tenant's Bankruptcy":

		
	(a)
	if Tenant becomes insolvent, as defined in the Bankruptcy Code, or under the Insolvency Laws;

		
	(b)
	the commencement of any action or proceeding for the dissolution or liquidation of Tenant or for the appointment of a receiver or trustee of the property of Tenant, whether instituted by or against Tenant, if not bonded or discharged within thirty (30) days of the date of 

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the commencement of such proceeding or action;

		
	(c)
	if Tenant files a voluntary petition under the Bankruptcy Code or Insolvency Laws;

		
	(d)
	if there is filed an involuntary petition against Tenant as the subject debtor under the Bankruptcy Code or Insolvency laws, which is not dismissed within sixty (60) days of filing, or results in issuance of an order for relief against the debtor; and

		
	(e)
	if Tenant makes or consents to an assignment of its assets, in whole or in part, for the benefit of creditors, or to a common law composition of creditors.

As used herein, (i) "Bankruptcy Code" means title 11 of the United States Code, 11 U.S.C. Section 101 et. seq. as amended or any successor statute and (ii) Insolvency Laws means the insolvency laws of any state or territory of the United States.

19.2.  Assumption by Trustee.  If Tenant becomes the subject debtor in a case pending under the Bankruptcy Code, Landlord's right to terminate this Lease under Section 20 hereof shall be subject to the applicable rights (if any) of the Trustee in Bankruptcy to assume or assign this Lease as then provided for in the Bankruptcy Code.  However, the Trustee in Bankruptcy must give to Landlord and Landlord must receive proper written notice of the Trustee's assumption or rejection of this Lease, within sixty (60) days (or such other applicable period as is provided for in the Bankruptcy Code) after the date of the Trustee's appointment.  The failure of the Trustee to give notice of the assumption within the period shall conclusively and irrevocably constitute the Trustee's rejection of this Lease and waiver of any rights of the Trustee to assume or assign this Lease.  The Trustee shall not have the right to assume or assign this Lease unless the Trustee (i) promptly and fully cures all defaults under this Lease, (ii) promptly and fully compensates Landlord for all monetary damages incurred as a result of such default, and (iii) provides to Landlord adequate assurance of future performance.  In the event Tenant is unable to:  (i) cure its defaults, (ii) reimburse Landlord for its monetary damages, or (iii) pay the Rent due under this Lease on time, then Tenant hereby agrees in advance that it has not met its burden to provide adequate assurance of future performance, and this Lease may be terminated by Landlord in accordance with Section 20.

19.3.  Tenant's Guarantor's Bankruptcy.  Notwithstanding any of the other provisions of this Lease, in the event Tenant's obligations under this Lease are guaranteed by a guarantor, and said guarantor shall voluntarily or involuntarily come under the jurisdiction of the Bankruptcy Code, and thereafter said guarantor or its trustee in bankruptcy, under the authority of and pursuant to applicable provisions thereof, shall determine to assign the guarantee obligations of said guarantor hereunder, Tenant and its said guarantor agree that (a) said guarantor or its trustee will provide Landlord sufficient information enabling it to independently determine whether Landlord will incur actual and substantial detriment by reason of such assignment, and (b) "adequate assurance of future performance" in regard to such guarantee obligations of said guarantor, as that term is generally defined under the Bankruptcy Code, will be provided to Landlord by said guarantor or its trustee and its assignee as a condition of said assignment.

20.  DEFAULT PROVISIONS AND REMEDIES.

20.1.  Events of Default.  Each of the following shall be deemed an Event of Default by Tenant under this Lease:

a.  failure of Tenant to pay Annual Basic Rent, Additional Rent, or any other sum required to be paid under the terms of this Lease, including late charges, within five (5) days of the date due hereunder;

b.  failure by Tenant to perform or observe any other term, covenant, agreement or condition of this Lease, on the part of Tenant to be performed (other than those obligations of Tenant set forth in subsection 16.2 for which Tenant shall be entitled to receive no prior notice, and other than the conditions set forth in paragraphs 20.1.a, c, d, e, f and g, which shall be governed solely by the provisions set forth herein), within ten 

20

(10) days after notice thereof from the Landlord, unless such performance shall reasonably require a longer period, in which case Tenant shall not be deemed in default if Tenant commences the required performance promptly and thereafter pursues and completes such action diligently and expeditiously and in any event within not more than thirty (30) days;

c.  the filing of a tax or mechanic's lien suit or claim against any property of Tenant which is not bonded or discharged and/or dismissed within thirty (30) days of the date such lien is filed;

d.  abandonment of the Premises by Tenant;

e.  an Event of Tenant's Bankruptcy or the rejection of this Lease in a Bankruptcy or similar proceeding by Tenant or by operation of law;

f.  the sale of Tenant's interest in the Premises under attachment, execution or similar legal process

g.  the failure of Tenant to vacate the Premises upon the expiration of the Term, or the earlier termination thereof pursuant to the other provisions hereof.

20.2.  Remedies.  Upon the occurrence of an Event of Default, Landlord, without notice to Tenant in any instance (except where expressly provided for below or by applicable law) may do any one or more of the following:

		
	(a)
	Sell at public or private sale all or any part of the goods, chattels, fixtures and other Tenant's Personal Property which are or may be put into the Premises during the Term, whether exempt or not from sale under execution or attachment (it being agreed that said property shall at all times be bound within a lien in favor of Landlord and shall be chargeable for all Rent and for the fulfillment of the other covenants and agreements herein contained) and apply the proceeds of such sale, first, to the payment of all costs and expenses of conducting the sale or caring for or storing said property (including all attorneys' fees), second, toward the payment of any indebtedness, including (without limitation) indebtedness for Annual Basic Rent, which may be or may become due from Tenant to Landlord, and third, to pay Tenant, on demand in writing, any surplus remaining after all indebtedness of Tenant to Landlord has been fully paid;

		
	(b)
	perform, on behalf and at the expense of Tenant, any obligation of Tenant under this Lease which Tenant has failed to perform and of which Landlord shall have given Tenant notice, the cost of which performance by Landlord, together with interest thereon at the Default Rate from the date of such expenditure, shall be payable by Tenant to Landlord, as Additional Rent, upon demand.  Notwithstanding the provisions of this clause (b) and regardless of whether an Event of Default shall have occurred, Landlord may exercise the remedy described in clause (b) without any notice to Tenant if Landlord, in its good faith judgment, believes it would be materially injured by failure to take rapid action or if the unperformed obligation of Tenant constitutes an emergency;

		
	(c)
	elect to terminate this Lease and the tenancy created hereby by giving notice of such election to Tenant, and reenter the Premises, by summary proceedings or otherwise, and remove Tenant and all other persons and property from the Premises, and store such property in a public warehouse or elsewhere at the cost of and for the account of Tenant without resort to legal process and without Landlord being deemed guilty of trespass or becoming liable for any loss or damage occasioned thereby;

		
	(d)
	declare any option which Tenant may have to renew the Term or expand the Premises to be null and void and of no further force and effect; or

		
	(e)
	exercise any other legal or equitable right or remedy which it may have under Laws or judicial decisions of the State of Nevada.

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Any costs and expenses incurred by Landlord (including, without limitation, reasonable attorneys' fees) in enforcing any of its rights or remedies under this Lease shall be paid to Landlord by Tenant, as Additional Rent, upon demand.

20.3.  Damages.  If this Lease is terminated by Landlord pursuant to subsection 20.2.(c), Tenant nevertheless shall remain liable for (a) any Annual Basic Rent, Additional Rent, and damages which may be due or sustained prior to such termination, and (b) all reasonable costs, fees and expenses including, but not limited to, attorneys' fees, costs and expenses incurred by Landlord in pursuit of its remedies hereunder or in renting the Premises to others from time to time.  In addition, Landlord may recover from Tenant additional damages to compensate Landlord for loss of rent resulting from termination of the Lease, which, at the election of Landlord, shall be either:

		
	(i)
	An amount equal to the rent which, but for termination of this Lease, would have become due during the remainder of the Term, less the amount of rent, if any, which Landlord shall receive during such period from others to whom the Premises may be rented (other than any Additional Rent received by Landlord as a result of any failure of such other person to perform any of its obligations to Landlord), in which case such damages shall be computed and payable in monthly installments, in advance, on the first day of each calendar month following termination of the Lease and continuing until the date on which the Term would have expired but for such termination; any suit or action brought to collect any such damages for any month shall not in any manner prejudice the right of Landlord to collect any damages for any subsequent month by a similar proceeding; or

		
	(ii)
	an amount equal to the present worth (as of the date of such termination) of rent which, but for termination of this Lease, would have become due during the remainder of the Term, in which case such damages shall be payable to Landlord in one lump sum on demand and shall bear interest at the Default Rate until paid.  For purposes of this clause (ii), "present worth" shall be computed by discounting such amount to present worth at a discount rate equal to one percentage point above the discount rate then in effect at the Federal Reserve Bank nearest to the location of the Property.  

Damages shall be due and payable immediately upon demand by Landlord following any termination of this Lease pursuant to subsection 20.2.

If this Lease is terminated pursuant to subsection 20.2., Landlord may re‐lease the Premises or any part thereof, alone or together with other premises, for such term(s) (which may be greater or less than the period which otherwise would have constituted the balance of the Term) and on such terms and conditions (which may include concessions or free rent and alterations of the Premises) as Landlord, in its sole discretion, may determine.  The failure or refusal of Landlord to re‐lease the Premises or any part or parts thereof shall not release or affect Tenant's liability for damages.

Notwithstanding the above, in the event of the termination of this Lease by reason of Tenant's bankruptcy or insolvency, Landlord shall have the right to prove and/or obtain as damages an amount equal to the greater of the maximum allowed under the Lease or any statute or rule of law in effect at the time.  The failure or refusal of Landlord to relet the Premises or any part or parts thereof shall not release or affect Tenant's liability for damages under such circumstances.

20.4.  No Waiver.  No act or omission by Landlord shall be deemed to be an acceptance of a surrender of the Premises or a termination of Tenant's liabilities hereunder, unless Landlord shall execute a written release of Tenant.  Tenant's liability hereunder shall not be terminated by the execution by Landlord of any new lease for all or any portion of the Premises or the acceptance of rent from any assignee or subtenant.

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20.5.  Remedies Not Exclusive.  All rights and remedies of Landlord set forth in this Lease shall be cumulative, and none shall exclude any other right or remedy, now or hereafter allowed by or available under any statute, ordinance, rule of court, or the common law, either at law or in equity, or both.  For the purposes of any suit brought or based hereon, this Lease shall be construed to be a divisible contract, to the end that successive actions may be maintained on this Lease as successive periodic sums shall mature hereunder.  The failure of Landlord to insist, in any one or more instances, upon a strict performance of any of the covenants, terms and conditions of this Lease or to exercise any right or option herein contained shall not be construed as a waiver or a relinquishment for the future, of such covenant, term, condition, right or option, but the same shall continue and remain in full force and effect unless the contrary is expressed by Landlord in writing.  The receipt by Landlord of rents hereunder, with knowledge of the breach of any covenant hereof or the receipt by Landlord of less than the full rent due hereunder, shall not be deemed a waiver of such breach or of Landlord's right to receive the full rents hereunder, and no waiver by Landlord of any provision hereof shall be deemed to have been made unless expressed in writing and signed by Landlord.

20.6.  Persistent Failure to Pay Rent.  In addition to any other remedies available to Landlord pursuant to this Lease or by law, Landlord may, at any time throughout the Term of this Lease, terminate this Lease upon Tenant's default on three (3) separate occasions during any twelve (12) month period under subsection 20.1.a, regardless of whether or not such prior defaults have been cured.  Termination, pursuant to this subsection 20.6, shall be effective upon Landlord's delivery to Tenant of a notice of termination.

21.  LANDLORD'S LIEN.

21.1.  Tenant hereby grants to Landlord a lien and security interest on all property of Tenant now or hereafter placed in or upon the Premises, and such property shall be and remain subject to such lien and security interest of Landlord for payment of all Rent and other sums agreed to be paid by Tenant herein.  It is provided, however, the Landlord shall not have a lien which would be superior to a lien from a lending institution, supplier or leasing company, if such lending institution, supplier or leasing company has a security interest in the equipment, furniture or other tangible personal property and which security interest has its origin in a transaction whereby Tenant originally acquired such equipment, furniture or other tangible personal property.  

21.2.  The provisions of this paragraph relating to such lien and security interest shall constitute a security agreement under and subject to the Nevada Uniform Commercial Code of the state where the Premises are located so that Landlord shall have and may enforce a security interest on all property of Tenant now or hereafter placed in or on the Premises, in addition to and cumulative of the Landlord's liens and rights provided by law or by the other terms and provisions of this Lease.

22.  INDEMNITY.

To the maximum extent permitted by law, Tenant shall indemnify, hold harmless and (at Landlord's option) defend Landlord, its agents, servants and employees from and against all claims, actions, losses, costs and expenses (including attorneys' and other professional fees), judgments, settlement payments, and, whether or not reduced to final judgment, all liabilities, damages, or fines paid, incurred or suffered by any third parties to the extent arising directly or indirectly from (a) any default by Tenant under the terms of this Lease, (b) the use or occupancy of the Property by Tenant or any person claiming through or under Tenant, and/or (c) any acts or omissions of Tenant or any contractor, agent, employee, invitee or Tenant of Tenant in or about the Property.  The foregoing indemnity is in addition to, and not in substitution for, any indemnity given by Tenant to Landlord under subsection 8.3. Tenant’s indemnification obligation shall survive the expiration of the Term or the earlier termination of this Lease.

23.  LIMITATION ON LANDLORD LIABILITY.

The term "Landlord" as used in this Lease shall mean only the owner or the Mortgagee or its trustees, as the case may be, then in possession of the Property so that in the event of any transfer by Landlord of its interest 

23

in the Property, the Landlord in possession immediately prior to such transfer shall be, and hereby is, entirely released and discharged from all covenants, obligations and liabilities of Landlord under this Lease accruing after such transfer.  In consideration of the benefits accruing hereunder, Tenant, for itself, its successors and assigns, covenants and agrees that, in the event of any actual or alleged failure, breach or default hereunder by the Landlord, and notwithstanding anything to the contrary contained elsewhere in this Lease, the remedies of Tenant under this Lease shall be solely and exclusively limited to Landlord's interest in the Property.

24.  LANDLORD OBLIGATIONS.

Landlord agrees to perform all of its obligations under this Lease in a first class manner consistent with the standards applicable to similar buildings in the vicinity of the Building.  Landlord shall be excused for the period of any delay in the performance of any of its obligations when the delay is due to any cause or causes beyond Landlord's control which include, without limitation, acts of God, all labor disputes, governmental regulations or controls, civil unrest, war, adverse weather condition, fire or other casualty, inability to obtain any material, services, or financing unless otherwise provided for in this Lease.  Except where specifically set forth in this Lease, there shall be no abatement, set‐off or deduction of Annual Basic Rent or Additional Rent due under this Lease.

25.  ASSIGNMENT AND SUBLETTING.

25.1.  Prohibited Without Landlord's Consent.  Tenant agrees for itself and its permitted successors and assigns in interest hereunder that it will not (a) assign or otherwise transfer, mortgage or otherwise encumber this Lease or any of its rights hereunder; (b) sublet the Premises or any part thereof or permit the occupancy or use of the Premises or any part thereof by any person other than Tenant; and/or (c) permit the assignment or other transfer of this Lease or any of Tenant's rights hereunder by operation of law (each of the events referred to in the foregoing clauses (a), (b) and (c) being hereinafter referred to as a "Transfer"), without the prior written consent of Landlord in each instance first obtained, which consent may be given or withheld in Landlord's sole and absolute subjective discretion, and any consent given shall not constitute a consent to any subsequent Transfer.  Any attempted Transfer without Landlord's consent shall be null and void and shall not confer any rights upon any purported transferee, assignee, mortgagee, sublessee, or occupant.  No Transfer, regardless of whether Landlord's consent has been granted or withheld, shall be deemed to release Tenant from any of its obligations hereunder or to alter, impair or release the obligations of any person guaranteeing the obligations of Tenant hereunder.  Tenant hereby indemnifies Landlord against liability resulting from any claim made against Landlord by any assignee or subtenant or by any broker claiming a commission in connection with the proposed Transfer.  In the event Landlord shall consent to a Transfer of this Lease, any option which Tenant may have to renew the Term shall be null and void.

Notwithstanding the foregoing, Landlord shall not unreasonably withhold its consent to any subletting of a portion of the Premises for any use permitted by the provisions of this Lease provided that (a) the Premises continue to be Tenant's primary place of business, (b) Landlord elects not to recapture the sublet portion as provided below, and (c) Tenant complies with the provisions of this Section requiring the submission of the proposed sublease and financial information as to any proposed subtenant.  Landlord shall have the right to recapture from this Lease any portion of the Premises which Tenant proposes to sublet by notifying Tenant in writing of its election within thirty (30) days following submission to Landlord of the proposed sublease and financial information required by this Section 25.  If Landlord elects to recapture, Landlord and Tenant shall execute an amendment to this Lease effecting a reduction in the Rental Area of the Premises and a corresponding reduction of the Annual Basic Rent and other charges computed on the Rental Area of the Premises.  Thereafter, Tenant shall have no rights whatsoever to the area of the Premises recaptured by Landlord and Landlord shall be entitled to relet such area free from any claim by Tenant.

25.2.  Stock Transfer.

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If Tenant or Guarantor is a privately‐held corporation or a partnership, then any event which results in a change in control of Tenant or Guarantor, or any change in the ownership or structure of Tenant or Guarantor which results in a change in management of Tenant or Guarantor, shall be deemed a prohibited Transfer under this Section 25.

25.3.  Rents from Transfer.  

In the event Landlord shall consent to a Transfer of this Lease and the amount of the rents (or other compensation) to be paid to Tenant by any such transferee is greater than the rents required to be paid by Tenant to Landlord pursuant to this Lease or a premium is to be paid to Tenant for an assignment of this Lease, Tenant shall pay to Landlord  any such excess or any such premium, as the case may be, upon receipt thereof by Tenant from such transferee. 

25.4.  Procedure for Obtaining Landlord's Consent.  

A.  In the event that, at any time or from time to time prior to or during the Term, Tenant desires to Transfer this Lease in whole or in part, whether by operation of law or otherwise, Tenant shall submit to Landlord for its consideration (a) in writing, the name and address of the proposed subtenant or assignee, a reasonably detailed statement of the proposed subtenant's or assignee's business and reasonably detailed financial references and information concerning the financial condition of the proposed subtenant or assignee, (b) a disclosure of the rents to be paid by any subtenant in excess of the rents reserved hereunder or the premium to be paid for the assignment, and (c) if a subletting, a description of the area of the Premises to be sublet.  Tenant agrees to pay Landlord, as Additional Rent,  all costs incurred by Landlord in connection with any actual or proposed Transfer, including, without limitation, the costs of making investigations as to the acceptability of a proposed subtenant or assignee and legal costs incurred in connection with any requested consent.  

B.  Landlord's consent to an assignment of this Lease shall be effective upon the execution by Tenant, the assignee, and Landlord of an assignment document prepared by Landlord in which the assignee shall agree to assume, observe, perform, and be bound by, all of Tenant's obligations under this Lease and Tenant shall agree to remain primarily liable for such obligations.  

Any consent by Landlord to a subletting of all or a portion of the Premises shall be deemed to have been given only upon the delivery by Landlord to Tenant of a consent document prepared and executed by Landlord expressly consenting to such subletting.

25.5.  Additional Provisions Respecting Transfers.  

A.  Without limiting Landlord's right to withhold its consent to any Transfer by Tenant, and regardless of whether Landlord shall have consented to any such Transfer, neither Tenant nor any other person having an interest in the possession, use or occupancy of the Premises or any part thereof shall enter into any lease, sublease, license, concession, assignment or other Transfer or agreement for possession, use or occupancy of all or any portion of the Premises which provides for rental or other payment for such use, occupancy or utilization based, in whole or in part, on the net income or profits derived by any person or entity from the space so leased, used or occupied, and any such purported lease, sublease, license, concession, assignment or other Transfer or agreement shall be absolutely void and ineffective as a conveyance of any right or interest in the possession, use or occupancy of all or any part of the Premises.  There shall be no deduction from the rental payable under any sublease or other Transfer nor from the amount thereof passed on to any person or entity, for any expenses or costs related in any way to the subleasing or Transfer of such space.

If Tenant shall make or suffer any such Transfer without first obtaining any consent of Landlord required by subsection 25.1, any and all amounts received as a result of such Transfer shall be the property of Landlord to the extent the same (determined on a square foot basis) is greater than the Annual Basic Rental (on a square foot basis) payable under this Lease, it being the parties' intent that any profit resulting from such Transfer shall belong 

25

to Landlord, but the same shall not be deemed to be a consent by Landlord to any such Transfer or a waiver of any right or remedy of Landlord hereunder.

B.    Tenant agrees to pay Landlord Two Thousand Five Hundred Dollars and No Cents ($2,500.00) to reimburse Landlord for attorneys’ fees and administrative expense for the review, processing or preparation of any document in connection with a Transfer, whether or not Landlord’s consent to the Transfer is required or obtained.

26.  HOLDING OVER.

Tenant agrees to vacate the Premises at the end of the Term, or earlier termination thereof, and Landlord shall be entitled to the benefit of all summary proceedings to recover possession of the Premises at the end of the Term.  If Tenant remains in possession of the Premises after the expiration of the Term, such action shall not renew this Lease by operation of law and nothing herein shall be deemed as a consent by Landlord to Tenant's remaining in the Premises.  If Tenant fails to vacate the Premises as required, Landlord may consider Tenant as either (a) a "Tenant‐at‐Will" (i.e. month‐to‐month tenant) liable for the payment of rent at the then market rate as determined by Landlord or (b) as a "Tenant‐Holding Over" liable for an amount equal to the actual damages incurred by Landlord as a result of Tenant's holding over, including, without limitation, all incidental, prospective and consequential damages and attorney's fees, but in no event shall such amount be less than an amount equal to twice the Annual Basic Rent, and Additional Rent, reserved hereunder applicable to the period of the holdover.  In either event, all other covenants of this Lease shall remain in full force and effect.

27.  SUBORDINATION AND ATTORNMENT.

This Lease is subject and subordinate to the liens of all mortgages, deeds of trust and other security instruments now or hereafter placed upon the Building or the Property or any portion thereof and all ground and other underlying leases from which Landlord's interest is derived (said mortgages, deeds of trust, other security instruments, and ground leases being hereinafter referred to as "Mortgages" and the mortgagees, beneficiaries, secured parties, and ground lessors thereunder from time to time being hereinafter called "Mortgagees"), and to any and all renewals, extensions, modifications, or refinancings thereof, without any further act of the Tenant.  If requested by Landlord, however, Tenant shall promptly execute any certificate or other document confirming such subordination.  Tenant agrees that, if any proceedings are brought for the foreclosure of any of the Mortgages, Tenant, if requested to do so by the purchaser at the foreclosure sale, shall attorn to the purchaser, recognize the purchaser as the landlord under this Lease, and make all payments required hereunder to such new landlord without any deduction or set‐off of any kind whatsoever.  Tenant waives the provisions of any law or regulation, now or hereafter in effect, which may give, or purport to give, Tenant any right to terminate this Lease or to alter the obligations of Tenant hereunder in the event that any such foreclosure or termination or other proceeding is prosecuted or completed.

Notwithstanding anything contained herein to the contrary, any Mortgagee may at any time subordinate the lien of its Mortgages to the operation and effect of this Lease without obtaining the Tenant's consent thereto, by giving the Tenant written notice thereof, in which event this Lease shall be deemed to be senior to such Mortgages without regard to the respective dates of execution and/or recordation of such Mortgages and this Lease and thereafter such Mortgagee shall have the same rights as to this Lease as it would have had were this Lease executed and delivered before the execution of such Mortgages.

If, in connection with obtaining financing for the Building, a Mortgagee shall request reasonable modifications in this Lease as a condition to such financing, Tenant will not unreasonably withhold, delay or defer its consent thereto, provided that such modifications do not materially adversely increase the obligations of Tenant hereunder, or materially adversely affect the leasehold interest hereby created or Tenant's use and enjoyment of the Premises, or increase the amount of Annual Basic Rent and Additional Rent payable hereunder.

28.  ESTOPPEL CERTIFICATES.

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Tenant shall, without charge, at any time and from time‐to‐time, within fifteen (15) days after receipt of request therefor by Landlord, execute, acknowledge and deliver to Landlord a written estoppel certificate, in such form as may be determined by Landlord, certifying to Landlord, Landlord's Mortgagee, any purchaser of Landlord's interest in the Building, or any other person designated by Landlord, as of the date of such estoppel certificate, the following, without limitation:  (a) whether Tenant is in possession of the Premises; (b) whether this Lease is in full force and effect; (c) whether there have been any amendments to this Lease, and if so, specifying such amendments; (d) whether there are then existing any set‐offs or defenses against the enforcement of any rights hereunder, and if so, specifying such matters in detail; (e) the dates, if any, to which any rent or other charges have been paid in advance and the amount of any Security Deposit held by Landlord; (f) that Tenant has no knowledge of any then existing defaults of Landlord under this Lease, or if there are such defaults, specifying them in detail; (g) that Tenant has no knowledge of any event having occurred that authorizes the termination of this Lease by Tenant, or if such event has occurred, specifying it in detail; and (h) the address to which notices to Tenant under this Lease should be sent.  Any such certificate may be relied upon by the person or entity to whom it is directed or by any other person or entity who could reasonably be expected to rely on it in the normal course of business.  The failure of Tenant to execute, acknowledge and deliver such a certificate in accordance with this Section 28 within fifteen (15) days after a request therefor by Landlord shall constitute an acknowledgment by Tenant, which may be relied on by any person who would be entitled to rely upon any such certificate, that such certificate as submitted by Landlord to Tenant is true and correct.

29.  PEACEFUL AND QUIET POSSESSION.

Tenant, if and so long as it pays all rents due hereunder and performs and observes the other terms and covenants to be performed and kept by it as provided in this Lease, shall have the peaceable and quiet possession of the Premises during the Term free of any claims of Landlord or anyone lawfully claiming by, through or under Landlord, subject, however, to the terms of this Lease and to matters of public record existing as of the date of this Lease.

30.  LANDLORD'S ACCESS TO PREMISES.

Landlord and its agents may at any reasonable time and without incurring any liability to Tenant, other than liability arising under Section 22, enter the Premises to inspect them or to make alterations or repairs or for any purpose which Landlord considers necessary for the repair, operation, or maintenance of the Building; provided, however, that in the case of an emergency, Landlord may enter the Premises at any time.  Tenant shall allow the Premises to be exhibited by Landlord (a) at any time to any representative of a lender or to any prospective purchaser of the Building or Landlord's interest therein or (b) within twelve (12) months of the end of the Term to any persons who may be interested in leasing the Premises.  

31.  RELOCATION.

32.  BROKERS, COMMISSIONS, ETC.

Landlord and Tenant acknowledge, represent and warrant each to the other that, except as listed in Section 1.F., no broker or real estate agent brought about or was involved in the making of this Lease and that no brokerage fee or commission is due to any other party as a result of the execution of this Lease.  Each of the parties hereto agrees to indemnify and hold harmless the other against any claim by any broker, agent or finder based upon the execution of this Lease and predicated upon a breach of the above representation and warranty.

33.  RECORDATION.

Neither Landlord nor Tenant shall record this Lease, any amendment to this Lease or any other memorandum of this Lease without the prior written consent of the other party, which consent may be withheld in the sole discretion of either party and, in the event such consent is given, the party requesting such consent and 

27

recording shall pay all transfer taxes, recording fees and other charges in connection with such recording.  Notwithstanding the above, Tenant covenants that if at any time any mortgagee or ground lessor relating to the financing of the Property shall require the recordation of this Lease, or if the recordation of this Lease shall be required by any valid governmental order, or if any governmental authority having jurisdiction in the matter shall assess and be entitled to collect transfer taxes, documentary stamp taxes, or both, on this Lease, Tenant, upon the request of Landlord, shall execute such instruments, including a Memorandum of this Lease, as may be necessary to record this Lease, and shall pay all recording fees, transfer taxes and documentary stamp taxes, payable on, or in connection with, this Lease or such recordation.

34.  MISCELLANEOUS.

34.1.  Severability.  If any term or provision of this Lease or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and enforceable to the fullest extent permitted by law.

34.2.  Applicable Law.  This Lease shall be given effect and construed by application of the laws of the state where the Property is located, and any action or proceeding arising hereunder shall be brought in the courts of the State where the Premises are located.

34.3.  Authority.  If Tenant is a corporation or partnership, the person executing this Lease on behalf of Tenant represents and warrants that Tenant is duly organized and validly existing; that this Lease has been authorized by all necessary parties, is validly executed by an authorized officer or agent of Tenant and is binding upon and enforceable against Tenant in accordance with its terms.

The undersigned agent of Landlord represents and warrants that it is authorized and empowered to enter into this Lease Agreement on behalf of the Landlord.

34.4.  No Discrimination.  It is Landlord's policy to comply with all applicable state and federal laws prohibiting discrimination in employment based on race, age, color, sex, national origin, disability, religion, or other protected classification.  It is further intended that the Building shall be operated so that all prospective tenants thereof, and all customers, employees, Tenants and invitees of all tenants shall have equal opportunity to obtain all the goods, services, accommodations, advantages, facilities and privileges of the Building without discrimination because of race, age, color, sex, national origin, disability, or religion.  To that end, Tenant shall not discriminate in the conduct and operation of its business in the Premises against any person or group of persons because of the race, age, color, sex, religion, national origin or other protected classification of such person or group of persons.

34.5.  Integration of Agreements.  This writing is intended by the parties as a final expression of their agreement and is a complete and exclusive statement of its terms, and all negotiations, considerations and representations between the parties hereto are incorporated herein.  No course of prior dealings between the parties or their agents shall be relevant or admissible to supplement, explain, or vary any of the terms of this Lease.  Acceptance of, or acquiescence to, a course of performance rendered under this Lease or any prior agreement between the parties or their agents shall not be relevant or admissible to determine the meaning of any of the terms or covenants of this Lease.  Other than as specifically set forth in this Lease, no representations, understandings or agreements have been made or relied upon in the making of this Lease.  This Lease can only be modified by a writing signed by each of the parties hereto.

34.6.  Third Party Beneficiary.  Except as expressly provided elsewhere in this Lease, nothing contained in this Lease shall be construed so as to confer upon any other party the rights of a third party beneficiary.

34.7.  Captions; Gender.  The captions used in this Lease are for convenience only and do not in any way 

28

limit or amplify the terms and provisions hereof.  As used in this Lease and where the context so requires, the singular shall be deemed to include the plural and the masculine shall be deemed to include the feminine and neuter, and vice versa.

34.8.  Successors and Assigns.  Subject to the express provisions of this Lease to the contrary (e.g., Section 25), the terms, provisions and covenants contained in this Lease shall apply to, inure to the benefit of, and be binding upon the parties hereto and their respective heirs, personal representatives, successors and assigns.

34.9.  Waiver of Jury Trial.  Landlord and Tenant hereby expressly waive trial by jury in any action or proceeding or counterclaim brought by either party hereto against the other party on any and every matter, directly or indirectly arising out of or with respect to this Lease, including, without limitation, the relationship of Landlord and Tenant, the use and occupancy by Tenant of the Premises, any statutory remedy and/or claim of injury or damage regarding this Lease.

34.10.  Joint and Several Liability.  In the event that two (2) or more persons (i.e., natural persons, corporations, partnerships, associations and other legal entities) shall sign this Lease as Tenant, the liability of each such party to pay all rents due hereunder and perform all the other covenants of this Lease shall be joint and several.  In the event Tenant is a general partnership or a limited partnership with two or more general partners, the liability of each partner, or general partner, under this Lease shall be joint and several.

34.11.  Notices.  All notices, demands and requests required under this Lease shall be in writing.  All such notices, demands and requests shall be deemed to have been properly given if sent by United States certified mail, return receipt requested, postage prepaid, or hand delivered, or overnight delivery, addressed to Landlord or Tenant, at the Landlord Notice Address and Tenant Notice Address, respectively.  Either party may designate a change of address by written notice to the other party, in the manner set forth above.  Notice, demand and requests which shall be served by certified mail in the manner aforesaid, shall be deemed to have been given three (3) days after mailing.  Notices sent by overnight delivery shall be deemed to have been given the day after sending.  Without intending to limit the generality of the foregoing requirement that all notices, demands and requests be in writing, there are certain provisions in this Lease where, for emphasis alone, such requirement is reiterated.

34.12.  Effective Date of this Lease.  Unless otherwise expressly provided, all terms, conditions and covenants by Tenant contained in this Lease shall be effective as of the date first above written.

34.13.  Mechanics' Liens.  In the event that any mechanics' or materialmen's lien, suit or claim shall at any time be filed against the Premises purporting to be for work, labor, services or materials performed or furnished to Tenant or anyone holding the Premises through or under Tenant, Tenant shall cause the same to be dismissed and/or discharged of record or bonded within thirty (30) days after the filing thereof.  If Tenant shall fail to cause such lien to be discharged and/or dismissed or bonded within thirty (30) days after the filing thereof, then, in addition to any other right or remedy of Landlord, Landlord may, but shall not be obligated to, discharge the same by paying the amount claimed to be due; and the amount so paid by Landlord, and all costs and expenses, including reasonable attorneys' fees incurred by Landlord in procuring the discharge of such lien, shall be due and payable by Tenant to Landlord, as Additional Rent, on the first day of the next succeeding month.  Notice is hereby given that Landlord shall not be liable for any labor or materials furnished to Tenant upon credit and that no mechanics', materialmen's or other liens for any such labor or materials shall attach to or affect the estate or interest of Landlord in and to the land and improvements of which the Premises are a part.

34.14.   Waiver of Right of Redemption.  Tenant hereby expressly waives (to the extent legally permissible) for itself and all persons claiming by, through or under it, any right of redemption or right to restore the operation of this Lease under any present or future law in the event Tenant is dispossessed for any proper cause, or in the event Landlord shall obtain possession of the Premises pursuant to the terms of this Lease.  Tenant understands that the Premises are leased exclusively for business, commercial and mercantile purposes and therefore shall not be redeemable under any provision of law.

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34.15.   Mortgagee's Performance.  If requested by any Mortgagee, Tenant shall give such Mortgagee written notice of any default by Landlord under this Lease and a reasonable opportunity to cure such default.  Tenant shall accept performance of any of Landlord's obligations hereunder by any ground lessor or mortgagee relating to the financing of the Property.

34.16.   Mortgagee's Liability.  No mortgagee or ground lessor relating to the financing of the Property, not in possession of the Premises or the Building, shall have any liability whatsoever hereunder.

34.17.  Schedules.  Each writing or plat referred to herein as being attached hereto as a schedule or exhibit is hereby made a part hereof, with the same full force and effect as if such writing or plat were set forth in the body of this Lease.

34.18.  Time of Essence.  Time shall be of the essence of this Lease with respect to the performance by Tenant of its obligations hereunder.

34.19.  Amendment.  This Lease may be amended by and only by an instrument executed and delivered by each party hereto.  No amendments of this Lease entered into by Landlord and Tenant, as aforesaid, shall impair or otherwise affect the obligations of any guarantor of Tenant's obligations hereunder, all of which obligations shall remain in full force and effect and pertain equally to any such amendments, with the same full force and effect as if the substance of such amendments was set forth in the body of this Lease.

34.20.   Antennae/Equipment License Agreement.  Tenant, at its sole cost and expense, shall have the right, subject to availability of space, to install and operate one or more satellite antennae or dishes and related equipment (the “Equipment”) necessary to transmit and receive signals from and to the Premises. The Equipment shall be placed on the roof of the Building, in a location approved by Landlord, and shall be subject to the further provisions of a certain Satellite Antennae/Dish Equipment License Agreement, the form of which is attached hereto as Schedule E.  In the event Tenant exercises the right granted herein, Landlord and Tenant agree to execute said License Agreement. 

34.21.    Parking Spaces.  The parking facilities appurtenant to the Building include asphalt surface parking with some covered spaces (“Parking Area”).  Tenant shall be entitled to the exclusive use of Five Hundred Forty Seven (547) vehicle parking spaces within the uncovered portions of the Parking Area for the monthly parking of Tenant’s employees at no cost to Tenant. Two hundred fifty (250) (“Additional Parking”)of the five hundred forty seven  (547) vehicle parking spaces will be on a code compliant parking lot on the land directly adjacent to the Building, which Landlord shall provide. Tenant shall provide the maintenance and repair of the Additional Parking, at Tenant sole cost and expense. Tenant's use of the uncovered unreserved spaces within the Parking Area shall be based upon an exclusive use in common with Tenant’s guests and invitees.

Notwithstanding the above, Tenant shall be responsible for paying, as Additional Rent, the operating costs, taxes, maintenance and repair of the Additional Parking. The monthly fee for the Additional Parking shall be based on eight percent (8%) of the annual return on the actual land used for the Additional Parking at a value of Eight Dollars and 00/100 ($8.00) per square foot and shall be added to the total design and construction costs. 

34.22.    Intellectual Property.  Tenant expressly acknowledges that Landlord is the owner of certain trademarks, service marks, trade names and logos, including without limitation “Summerlin”, “The Hills”, “The Pueblo”, “The Trails”, “The Crossings”, “The Canyons”, “The Arbors”, and “The Willows” (collectively, “Intellectual Property) and, therefore, Tenant shall not, without the express written permission of Landlord, utilize any of the Intellectual Property as part or all of its business names, trade names, product names, trademarks, service marks, or any other identifying devices associated with its business, products or services.  Furthermore, Tenant shall not challenge or attack the validity or enforceability of any of the Intellectual Property at any time during the Term of the Lease and for a period of two (2) years thereafter.  Tenant shall indemnify and hold Landlord harmless for any and all loss, cost or damage suffered by Landlord as a result of Tenant’s breach of this Section 34.22 of the Lease.  This Section 34.22 shall survive the expiration or termination of this Lease.

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34.23. Signage.   Tenant's, at Tenant’s sole cost and expense shall be responsible for the installation, materials and removal of Tenant's  signage,  Tenant shall be allowed monument and Building signage on both the Summerlin Parkway side and the front entrance side of the Building in a mutually agreed upon location and according to all government and Summerlin sign criteria standards. Upon the natural expiration or earlier termination of the Lease, Tenant shall repair any damage done to or in the Building during the removal of the any signage.

SIGNATURES ON FOLLOWING PAGE

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

      

	
				
	 
	 
	 
	 LANDLORD:

	 
	 
	 
	1450 CENTER CROSSING DRIVE, LLC, a                              Delaware limited liability company

	 
	 
	 
	 

	 
	 
	By:  
	/s/ LUC ANDRE PICOTTE

	 
	 
	 
	Authorized Signatory

	 
	 
	 
	 

	 
	 
	 
	TENANT:

	 
	 
	 
	DIAMOND RESORTS CORPORATION, a Maryland corporation

	 
	 
	 
	 

	 
	 
	By:
	/s/ DAVID F. PALMER

	 
	 
	 
	Authorized Signatory

	 
	 
	 
	 

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SCHEDULE A

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SCHEDULE A-1

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SCHEDULE A-1

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SCHEDULE A-2

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SCHEDULE A-2

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SCHEDULE C

RULES AND REGULATIONS

1.  Tenant shall not obstruct the Common Area, and the sidewalks, driveways, and other public portions of the Property (herein "Public Areas") and such Public Areas shall not be used for any purpose other than ingress and egress to and from its Premises.  Fire exits and stairways are for emergency use only, and they shall not be used for any other purpose.

2.  No awnings or other projections shall be attached to the outside walls of the Building.  No curtains, blinds, shades or screens shall be attached to, hung in, or used in connection with any window or door of the Premises.

3.  Except as otherwise provided in the Lease, no sign, insignia, advertisement, lettering, notice or other object shall be exhibited, inscribed, painted or affixed by Tenant on any part of the exterior or interior of the Premises or the Building. 

4.  No bicycles, vehicles, animals (except seeing eye dogs), fish or birds of any kind shall be brought into or kept in or about the Premises.

5.  Nothing shall be done which would impair or interfere with any of the HVAC, plumbing, electrical, structural components of the Building.  No flammable, combustible or explosive fluid, chemical or substance may be kept on the Premises.

6.  No additional locks or bolts of any kind shall be placed upon any of the doors or windows by Tenant, nor shall any changes be made in locks or the mechanism thereof.  Tenant shall, upon the termination of the Lease, turn over to Landlord all keys to stores, offices and restrooms.  In the event of the loss of any keys furnished by Landlord, Tenant shall pay to Landlord the cost of replacement locks and Tenant hereby agrees to pay said cost to Landlord, as Additional Rent, promptly upon demand.

7.  Deliveries of supplies and materials shall be permitted through the building side entrance door and to use the designated padded passenger elevator for material handling.  No deliveries permitted through the first floor lobby except in special circumstances and only with Landlord's prior approval.    No deliveries or material handling will be made between 8:00 am and 5:30 pm.

No hand trucks shall be used for such moving activities except for those equipped with rubber tires and side guards.

8.  Tenant shall not use or occupy its Premises, or permit any portion thereof to be used or occupied for any use which constitutes a nuisance, or is hazardous, or, in Landlord's opinion, likely to injure the reputation of a first‐class building.

9.  Tenant shall turn off all lights, copying machines and other electrical equipment when the Premises are vacant.  All entrance doors in Tenant's Premises shall be kept locked when not in use.  Entrance doors shall not be left open at any time.

10.  If Tenant shall request Landlord to perform any work on the Premises or Property, Tenant shall make such request at the management office for the Building.  Tenant shall not request employees of Landlord to perform any work or do anything outside of their regular duties, unless under special instructions from Landlord.

11.  Canvassing, soliciting and peddling in the Building are prohibited and Tenant shall cooperate to prevent the same.

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12.  Tenant shall not cause or permit any odors of cooking or other processes, or any unusual or objectionable odors, to emanate from its Premises which would annoy other tenants or create a public or private nuisance.  No cooking shall be done in Tenant's Premises, except for a household microwave oven or as  is expressly permitted in the Lease.

13.  No contract of any kind involving the care and maintenance of the Premises shall be entered into by Tenant without the prior written consent of Landlord.  Further, no vending machine of any kind shall be installed in the Building or on or about the Property without the prior written consent of Landlord.

Landlord shall not be responsible to Tenant for any loss of property from its Premises however occurring, or for any damage done to the effects of Tenant by Landlord's janitors or any of its employees, or by any other person or any other cause. 

14.  All electrical work must be in accordance with code and is subject to Landlord's review and approval.

15.  Landlord hereby reserves to itself any and all rights not granted to Tenant hereunder, including, but not limited to, the following rights which are reserved to Landlord for its purposes in operating the Building:

(a)  the exclusive right to use of the name of the Building for all purposes, except that Tenant may use the name as its business address and for no other purpose;

(b)  the right to change the name or address of the Building, without incurring any liability to Tenant for so doing;

(c)  the right to install and maintain a sign or signs on the exterior of the Building;

(d)  the exclusive right to use the roof of the Building;

(e)  the right to limit the space on the directory of the Building to be allotted to Tenant; and

(f)  the right to grant anyone the right to conduct any particular business or undertaking in the Building.

16.  Tenant and its employees shall park their cars only in those portions of the parking area designated by Landlord.

17.  Tenant shall not permit undue accumulations of garbage, trash, rubbish or any other refuse, and will keep such refuse in proper containers in the interior of the Tenant's Premises or other places designated by the Landlord.

18.  Tenant shall not conduct or permit any bankruptcy sales, unless directed by order of a court of competent jurisdiction, or any fictitious fire or going out of business sale.

19.  Landlord shall have the right to close and securely lock the Building during generally accepted holidays and during such other times as Landlord may, in its sole discretion, deem advisable for the security of the Building and its tenants.  Landlord shall give Tenant twenty‐four (24) hours notice before so closing and securely locking the Building except in an emergency.

20.  Landlord reserves the right to rescind, alter, waive or add any rule or regulation at any time prescribed for the Building when Landlord deems it necessary or desirable for the reputation, safety, character, security, care, appearance or interests of the Building, the preservation of good order therein, the operation or maintenance of the Building or the equipment thereof, or the comfort of tenants or others in the Building.  No rescission, alteration, waiver or addition of any rule or regulation with respect to one tenant shall operate as a rescission, alteration or 

39

waiver in respect of any other tenant.  

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SCHEDULE D
RULES AND REGULATIONS
APPLICABLE TO TENANT CONSTRUCTION WORK

		
	1.
	These rules and regulations shall apply to all improvement work approved by Landlord and performed by Tenant in the Premises, including, without limitation, the following:

		
	A.
	Removal, relocation, installation or refinishing of walls, doors, modular systems, etc.

		
	B.
	Removal, relocation or installation of electrical, coaxial or telephone outlets and cable.

		
	C.
	Removal, relocation or installation of HVAC or plumbing ductwork and piping.

D.    Carpet installation, replacement or repair.

		
	2.
	Contractor Approval ‐ Tenant shall submit to Landlord for its prior approval the names of all contractors who Tenant employs to perform work in the Premises.

		
	3.
	Contractor Parking ‐ Tenant shall insure that its contractors and their employees shall park only in those areas designated by Landlord.

		
	4.
	Building Access ‐ Contractors shall have access to the Building only through those entrances and at such times as Landlord shall designate.

		
	5.
	Contractors shall sign in and out at front desk.

		
	6.
	Tenant Area Access ‐ Tenant shall be responsible for providing contractor access to tenant areas.

		
	7.
	Deliveries ‐ All deliveries of supplies and materials shall be made via the outside loading dock or garage loading dock.  No deliveries will be permitted through front and side entrances and first floor lobby except in special circumstances and only with Landlord's prior approval.  Supplies and materials shall be transported to the appropriate floor via the construction elevator which shall be locked off for contractor use, when needed.  The same procedure shall be followed for removal of materials and supplies from Tenant areas and the Building.  Deliveries will be made between 8:30 and 11:30 a.m. and 1:30 and 4:30 pm.

		
	8.
	Storage ‐ Materials and supplies shall be stored within Tenant work areas.  There shall be no exceptions without Landlord's approval.

		
	9.
	Utility Interruptions ‐ Any interruptions of water, fire alarms, sprinklers, gas, plumbing and automation system, electric service related to Tenant alterations must be scheduled in advance and approved by Landlord.

		
	10.
	Debris Removal ‐ Tenant shall cause its contractors to remove and dispose of all construction debris from Tenant areas and the building.  Landlord's compactor shall not be used for construction debris disposal.  If needed, contractors shall be responsible for supplying construction dumpsters with location of the dumpsters approved by the Landlord.

		
	11.
	Air Balance ‐ Any air balance modifications required as a result of Tenant alterations shall be the Tenant's responsibility, with the understanding that any such modifications must take into account all areas served by the air handlers being balanced.

		
	12.
	Protection of Carpets ‐ If carpet is to remain in suite, it is to be protected by heavy plastic cover prior to demolition or removed, stored and relaid.  Public area carpet is to be protected by plastic 

41

runners or a series of walk‐off mats from elevator to suite under reconstruction.  

		
	13.
	After hours work ‐ Landlord must be notified of all work scheduled after normal business hours.  If the Landlord determines that an employee of Landlord be present during after hours, the tenant will be billed for the employee's time at the standard rate paid employees for overtime plus benefits.  

		
	14.
	Construction personnel ‐ Construction personnel are not to eat in lobby or in front of building, nor are they to congregate in lobby or front of building.  Construction personnel will use restrooms designated by the Landlord.  

		
	15.
	These rules and regulations shall be in addition to the provisions of the Lease Agreement.  

 

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