Document:

exv10w4

Exhibit 10.4

FOURTH AMENDED AND RESTATED

SECURITYHOLDERS AGREEMENT

          This FOURTH AMENDED AND RESTATED SECURITYHOLDERS AGREEMENT is dated as of July 21, 2011 by and
among Diamond Resorts Parent, LLC, a Nevada limited liability company (the “Company”),
Cloobeck Diamond Parent, LLC, a Nevada limited liability company, (“CDP”), 1818 Partners,
LLC, a Nevada limited liability company (“1818 Partners”), DRP Holdco, LLC, a Delaware
limited liability company (“Guggenheim”), the Silver Rock Entities (as defined below) and
The Hartford Growth Opportunities Fund, Hartford Growth Opportunities HLS Fund, Quissett Investors
(Bermuda) L.P., Quissett Partners, L.P., The Hartford Capital Appreciation Fund, Bay Pond Partners,
L.P. and Bay Pond Investors (Bermuda) L.P. (each, a “Wellington Purchaser” and
collectively, the “Wellington Purchasers”).

          WHEREAS, the Company, CDP, Guggenheim, the Silver Rock Entities and Soros Strategic Partners
LP entered into that certain Third Amended and Restated Securityholders Agreement, dated as of
February 18, 2011 (the “Original Agreement”);

          WHEREAS, Section 11 of the Original Agreement provides that the Original Agreement may be
amended upon the prior written consent of (i) the Company, (ii) the Majority Common Holders, (iii)
the Majority Guggenheim Holders, and (iv) the Majority Preferred Holders (as such term is defined
in the Original Agreement); and

          WHEREAS, the undersigned, being (i) the Company, (ii) the Majority Common Holders under the
Original Agreement, (iii) the Majority Guggenheim Holders, (iv) the Majority Preferred Holders and
(v) the Wellington Purchasers, desire to amend and restate the Original Agreement on the terms and
conditions set forth herein.

          NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:

          1. Definitions. As used herein, the following terms shall have the following
meanings:

          “Acceptance Period” shall have the meaning set forth in Section 7(a).

          “Affiliate” means, when used with reference to a specified Person, any Person that
directly or indirectly controls or is controlled by or is under common control with the specified
Person. As used in this definition, “control” (including, with its correlative meanings,
“controlled by” and “under common control with”) shall mean possession, directly or indirectly, of
power to direct or cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or otherwise). With respect to
any Person who is an individual, “Affiliates” shall also include, without limitation, any
member of such individual’s Family Group. For purposes hereof, no (i) homeowner’s association at a
property at which the Company or its Subsidiaries either have sold any timeshare interests or
intervals or acts as a management company or (ii) collection holding real estate interests
underlying vacation points shall be deemed to be an Affiliate of the Company or any Subsidiary.

 

 

          “Agreement” means this Fourth Amended and Restated Securityholders Agreement,
including the joinder attached hereto as Exhibit A, as may be amended, modified or waived
from time to time in accordance with its terms.

          “Adjusted EBITDA” shall have the meaning ascribed to such term in the Senior Note
Indenture.

          “Approved Company Sale” shall have the meaning set forth in Section 3(a).

          “Board” means the Company’s board of managers.

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

          “CDP Common Unit Threshold” means the ownership by the CDP Investors of at least 10%
of the Common Units issued to the CDP Investors as of the date hereof.

          “CDP Investors” means CDP, 1818 Partners and any of their respective Permitted
Transferees.

          “CDP Redemption Agreement” means that certain Redemption Agreement, dated as of the
date hereof, by and among the Company and CDP.

          “Code” means the Internal Revenue Code of 1986, as amended from time to time.

          “Common Percentage Interests” shall have the meaning ascribed to such term in the LLC
Agreement.

          “Common Units” shall have the meaning ascribed to such term in the LLC Agreement.

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

          “Company’s Notice of Intention to Sell” shall have the meaning set forth in
Section 7(a).

          “Dispute” shall have the meaning set forth in Section 22.

          “DRC” means Diamond Resorts Corporation, a Maryland corporation.

          “Election Period” shall have the meaning set forth in Section 2(a)(i).

          “Equity Equivalents” shall have the meaning set forth in Section 7(a) hereof.

          “Equityholders” means collectively the CDP Investors, the Guggenheim Investors, the
Silver Rock Investors, the Wellington Investors and the Other Investors.

          “Equityholder Units” means (i) all Units held, directly or indirectly, by the
Equityholders, and (ii) all equity securities issued directly or indirectly with respect to any
Units referred to in clause (i) above by way of a unit or stock dividend or other distribution, or
unit or

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stock split, or in connection with a combination of units or shares, recapitalization, merger,
consolidation or other reorganization, including pursuant to a transaction of the type described in
Article 13 of the LLC Agreement.

          “Event of Default” has the meaning given such term in the Senior Note Indenture.

          “Excluded Units” means any Units or other equity interests of the Company, whether now
authorized or not, and rights, options or warrants to purchase equity interests, and securities of
any type whatsoever that are, or may become, convertible into or exchangeable for equity interest
(such rights, options, warrants and convertible or exchangeable securities are referred to herein
as “Convertible Securities”), issued: (i) to employees of the Company or the Management
Company (excluding Stephen J. Cloobeck) pursuant to any unit option plan or other equity incentive
plan adopted by the Board, in an aggregate amount (together with all previous issuances to
employees, other than Stephen J. Cloobeck) not to exceed 10% of the Common Units, determined on a
fully-diluted basis, (ii) upon exercise, conversion or exchange of any Convertible Securities
pursuant to their terms, (iii) in connection with any acquisition by the Company of any shares of
capital stock or assets of any Person, or any merger or consolidation involving the Company or any
Subsidiary of the Company, (iv) pursuant to a Public Offering, (v) in connection with a stock split
or other subdivision of, or as a dividend or other distribution with respect to, the Company’s
Units or other equity interests, (vi) in connection with strategic alliances, joint ventures, third
party credit arrangements or other partnering arrangements on behalf of the Company authorized by
the Board, including the members of the Board appointed by the Guggenheim Member (as defined in the
LLC Agreement), or (vii) pursuant to (A) that certain Securities Purchase Agreement, dated as of
the date hereof, by and among the Company and the Wellington Purchasers, or (B) the Redemption
Agreement.

          “Executive Officer” means the Chief Executive Officer, Chief Financial Officer, Chief
Information Officer, Chief Marketing Officer or other chief-level officer of the Company.

          “Fair Market Value” means the net equity value of the Company, as determined by mutual
agreement of the Company and the Investor exercising its Put, or failing such mutual agreement, by
an independent investment banking firm mutually agreed to by the Company and such Investor at the
Company’s expense; provided, that the determination of the fair market value shall assume
that the Company and its Subsidiaries are sold as a going concern and then liquidated and shall not
provide for any discounts based on illiquidity or restrictions on transfer of the applicable Common
Units or the fact that the Common Units being valued represent a minority interest in the Company.

          “Family Group” means, with respect to any Person who is an individual, (i) such
Person’s spouse, former spouse, ancestors and descendants (whether natural or adopted), parents and
their descendants and any spouse of the foregoing persons (collectively, “relatives”), (ii)
the trustee, fiduciary or personal representative of such Person and any trust solely for the
benefit of such Person and/or such Person’s relatives or (iii) any limited partnership, limited
liability company or corporation the governing instruments of which provide that such Person shall
have the exclusive, nontransferable power to direct the management and policies of such entity and
of

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which the sole owners of partnership interests, membership interests or any other equity
interests are, and will remain, limited to such Person and such Person’s relatives.

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

          “Guggenheim Common Unit Threshold” means the ownership by the Guggenheim Investors of
at least: (i) 5% of the total Common Percentage Interests (determined on a fully-diluted basis) or
(ii) 25% of the Common Units issued to the Guggenheim Investors as of the date hereof.

          “Guggenheim Entity” means any of (i) Guggenheim Capital, LLC and its Affiliates, (ii)
any Guggenheim Investor, (iii) any Guggenheim Related Entity and (iv) any Affiliates of any
Guggenheim Investor.

          “Guggenheim Investors” means Guggenheim and any of its Permitted Transferees.

          “Guggenheim Related Entity” means an entity with a management or investment management
relationship with Guggenheim Capital, LLC or its Affiliates.

          “Guggenheim Units” means all Equityholder Units owned by the Guggenheim Investors.

          “Guggenheim Warrant” means that certain Warrant to purchase Common Units of the
Company issued to Guggenheim Corporate Funding, LLC on June 30, 2011.

          “Indebtedness” shall have the meaning ascribed to such term in the Senior Note
Indenture.

          “Investor” means any Guggenheim Investor, any Silver Rock Investor or any Wellington
Investor.

          “Investor Group” means, separately, each of (i) the CDP Investors, collectively, (ii)
the Guggenheim Investors, collectively, and (iii) the Wellington Investors, collectively.

          “Investor Units” means the Guggenheim Units, the Silver Rock Units and the Wellington
Units.

          “Issue Date” means, with respect to any Unit, the original issuance date of such Unit.

          “LLC Agreement” means the Fourth Amended and Restated Operating Agreement of the
Company, dated as of the date hereof, as amended and/or restated from time to time.

          “Majority CDP Holders” means, at any time, the CDP Investors holding a majority of the
Common Units held by the CDP Investors.

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          “Majority Common Holders” means, at any time, the holders of a majority of the Common
Units held by the Equityholders.

          “Majority Investor Holders” means, at any time, the holders of a majority of the
Common Units held by the Guggenheim Investors, the Silver Rock Investors and the Wellington
Investors collectively.

          “Majority Guggenheim Holders” means, at any time, the Guggenheim Investors holding a
majority of the Guggenheim Units.

          “Majority Wellington Holders” means, at any time, the Wellington Investors holding a
majority of the Wellington Units.

          “Management Company” means Hospitality Management and Consulting Service, L.L.C. or
its successor pursuant to that certain Homeowner Association Oversight, Consulting and Executive
Management Services Agreement, dated as of December 31, 2010, by and between DRC and Hospitality
Management and Consulting Service, L.L.C.

          “Material Subsidiary” means any Subsidiary of the Company that during the previous
fiscal year generated or contributed more than 20% of Adjusted EBITDA for such fiscal year.

          “Minimum Threshold” means, with respect to any Investor Group, such Investor Group
holds at least (i) 10% of the total Common Percentage Interests (determined on a fully-diluted
basis) or (ii) 50% of the aggregate Common Units owned by such Investor Group as of the date
hereof.

          “Offer Notice” shall have the meaning set forth in Section 2(a)(i).

          “Other Investor” means any Person (other than the CDP Investors and the Investors)
signatory to a joinder in the form attached hereto as Exhibit A and indicated as an “other
investor” in such joinder and any of their respective Permitted Transferees.

          “Participating Equityholder” shall have the meaning set forth in Section
2(b)(i).

          “Permitted Transferee” has the meaning set forth in Section 2(c)(ii) hereof.

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

          “Polo Holdings” means Diamond Resorts Holdings, LLC.

          “Principal Line of Business” means all business activities related to Timeshare
Opportunities, including, but not limited to, financing, development, sales, marketing, management
and maintenance of interval or fractional timeshare properties and the real estate incident
thereto, the acquisition and re-sale of such properties and the booking and reservation

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activities related thereto; provided that, for the avoidance of doubt, “Principal Line of
Business” shall not include business activities related to hotels, condominiums, condo-hotels,
apartment rental complexes, commercial retail centers, office complexes, casinos, or other types of
real estate / hospitality developments or other activities not involving Timeshare Opportunities.
“Timeshare Opportunity” means any real estate development project or arrangement which, at
the time of entering into such opportunity, is required to be licensed under or is regulated under
any timeshare statute or regulation in any jurisdiction (regardless of whether such jurisdiction is
the jurisdiction in which the opportunity is located, sold or marketed), including, without
limitation, interval and fractional timeshares, whether conveyed via license, right to use, fee
simple title or points, and any timeshare club or exchange arrangement.

          “Public Offering” means an underwritten public offering and sale of Units pursuant to
an effective registration statement under the Securities Act; provided that a Public
Offering shall not include an offering made in connection with a business acquisition or
combination pursuant to a registration statement on Form S-4 or any similar form, or an employee
benefit plan pursuant to a registration statement on Form S-8 or any similar form.

          “Put” has the meaning set forth in Section 2(a)(ii) hereof.

          “Qualified Public Offering” means any Public Offering providing aggregate gross
proceeds (before deducting underwriting discounts and expenses) to the Company and/or its
Equityholders of at least $150 million in such Public Offering and at an offering price which
represents a common equity valuation of Common Units (or Successor Stock, as defined in the LLC
Agreement) outstanding immediately prior to the issuance of Successor Stock in connection with such
offering of at least $750 million.

          “Redemption Agreement” means that certain Redemption Agreement, dated as of the date
hereof, by and among the Company, Guggenheim and the Silver Rock Entities.

          “Recipient Equityholder” shall have the meaning set forth in Section 2(b)(i).

          “Registration Rights Agreement” means that certain Second Amended and Restated
Registration Rights Agreement, dated as of the date hereof, by and among the Company and certain
members of the Company.

          “Sale of the Company” means (i) a transaction or series of transactions (including by
way of merger, consolidation, or sale of equity) the result of which is that the holders of the
Common Units immediately prior to such transaction(s) (on a fully diluted as if converted basis)
and their Affiliates are after giving effect to such transaction(s) no longer, in the aggregate,
the “beneficial owners” (as such term is defined in Rule 13d-3 and Rule 13d-5 promulgated under the
Securities Act), directly or indirectly through one or more intermediaries, of more than 50% of the
Common Units (on a fully diluted basis as if converted basis), or (ii) the sale, lease, transfer,
conveyance or other disposition, in one or a series of related transactions, of all or
substantially all of the Company’s assets determined on a consolidated basis.

          “Sale Notice” shall have the meaning set forth in Section 2(a)(i).

          “Securities Act” means the Securities Act of 1933, as amended.

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          “Senior Note Indenture” means the Indenture dated as of August 13, 2010 by and among
DRC, the Company, Polo Holdings, the Subsidiary Guarantors named therein and Wells Fargo Bank,
National Association, as trustee, as in effect as of the date hereof.

          “Senior Secured Notes” means DRC’s 12.0% Senior Secured Notes due 2018, issued on or
prior to August 13, 2010 pursuant to the Senior Note Indenture and any Exchange Notes (as defined
in the Senior Note Indenture).

          “Silver Rock Entities” means, collectively, Silver Rock Financial LLC, IN — FP1 LLC,
BDIF LLC and CM — NP LLC.

          “Silver Rock Investors” means the Silver Rock Entities and any of their respective
Permitted Transferees.

          “Silver Rock Units” means all Equityholder Units owned by the Silver Rock Investors.

          “Subsidiary” means, with respect to any Person, any corporation, partnership,
association or other business entity of which (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a
combination thereof, or (ii) if a partnership, association or other business entity, a majority of
the partnership or other similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination
thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership
interest in a partnership, association or other business entity if such Person or Persons shall be
allocated a majority of partnership, association or other business entity gains or losses or shall
be or control the managing director or a general partner of such partnership, association or other
business entity.

          “Tagging Investor” shall have the meaning set forth in Section 2(b)(i).

          “Tax Distribution” shall have the meaning ascribed to such term in the LLC Agreement.

          “Transfer” means any direct or indirect sale, transfer, assignment, pledge or other
disposition or encumbrance, including, without limitation, a transfer of stock in a corporate
member.

          “Transferring Equityholder” shall have the meaning set forth in Section
2(b)(i).

          “Transferring Investor” shall have the meaning set forth in Section 2(a)(i).

          “Transfer Notice” shall have the meaning set forth in Section 2(b)(i).

          “Units” means collectively the Common Units and any other equity securities of the
Company (or its successors) which are not limited to a fixed sum or percentage of par value

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or stated value in respect of the rights of the holders thereof to participate in dividends or
other distributions or in the distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of the issuer of such securities, including any such type of equity
securities of any successor entity of the Company issued pursuant to a transaction of the type
described in Article 13 of the LLC Agreement.

          “Unrestricted Subsidiary” shall have the meaning ascribed to such term in the Senior
Note Indenture.

          “Wellington Common Unit Threshold” means the ownership by the Wellington Investors of
at least: (i) 5% of the total Common Percentage Interests (determined on a fully-diluted basis) or
(ii) 25% of the Common Units issued to the Wellington Investors as of the date hereof.

          “Wellington Entity” means any of (i) Wellington Management Company, LLP and its
Affiliates, (ii) any Wellington Investor, (iii) any Wellington Related Entities and (iv) any
Affiliates of any Wellington Investor.

          “Wellington Investors” means the Wellington Purchasers and any of their respective
Permitted Transferees.

          “Wellington Purchaser” and “Wellington Purchasers” shall have the meaning
ascribed to those terms in the preamble.

          “Wellington Related Entity” means an entity with a management or investment management
relationship with Wellington Management Company, LLP or its Affiliates.

          “Wellington Units” means all Equityholder Units owned by the Wellington Investors.

          2. Restrictions on Transfer of Equityholder Units.

          (a) General Restrictions.

     (i) The Common Units held by any Investor may be Transferred, in whole or in part, only
(A) with the consent of the majority of the Board, to any Person, which consent shall not be
unreasonably withheld, delayed or conditioned; provided that, unless waived in
writing by the Board, such transferee shall have complied with the requirements of
Section 2(c)(ii), (B) pursuant to the exercise of its participation rights under
Section 2(b), to any Person; provided, that unless waived in writing by the Board,
such Person shall have complied with the requirements of Section 2(c)(ii), (C) to
the Company pursuant to the terms of this Section 2(a)(i), (D) pursuant to an
Approved Company Sale (as herein defined), (E) to any Person if either (i) for any Investor
that is an investment company registered under the Investment Company Act of 1940, as
amended (the “Investment Company Act”), if its continued holding of the Common Units
would cause it to be in non-compliance with the fundamental investment restrictions set
forth in the registration statement of such holder pursuant to Section 13(a)(2) or 13(a)(3)
of the Investment Company Act due to actions taken by the holders of the outstanding

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voting securities of such Investor after the date hereof or (ii) there is a reasonable
likelihood that the continued holding of the Common Units would result in a violation of, or
a material adverse effect under, applicable law or regulation, or (F) to any Person for any
Investor that is a “regulated investment company” (as defined under Section 851(a) of the
Code), if the Company realizes any items of gross income that do not constitute qualifying
income under Section 851(b)(2) of the Code; provided that if any Investor intends to
Transfer any Common Units pursuant to Section 2(a)(i)(A), Section 2(a)(i)(E)
or Section 2(a)(i)(F), such Investor (the “Transferring Investor”) shall
deliver a written notice of such intention (a “Sale Notice”) to the Company
including a description of the proposed number of Common Units intended to be transferred.
The Company may submit an offer to purchase all (but not less than all) of the Common Units
specified in the Sale Notice. Any such offer shall be made by delivering written notice
thereof (an “Offer Notice”) to the Transferring Investor as soon as practical but in
any event within ten (10) business days after the delivery of the Sale Notice. Any such
Offer Notice shall include the proposed cash purchase price and other material terms of the
proposed purchase. A proposed Offer Notice shall be valid only if such notice contains firm
and enforceable commitments from reputable sources for the financing, provided, that if the
Transferring Investors validly accepts any proposed Offer Notice, then such proposed Offer
Notice shall be deemed to be a valid Offer Notice. The Offer Notice will constitute an
irrevocable offer by the Company to acquire the Common Units specified in the Offer Notice
from the Transferring Investor at the price and on the terms specified in the Offer Notice.
If the Company elects to offer to purchase Common Units from the Transferring Investor and
the Transferring Investor accepts such offer, the transfer of such shares shall be
consummated as soon as practical after the delivery of the Offer Notice to the Transferring
Investor, but in any event within 30 days after delivery of the Sale Notice (the
“Election Period”). If the Transferring Investor has rejected any such offer by the
Company, then the Transferring Investor may, within six (6) months after the expiration of
the Election Period, Transfer such Common Units to one or more third parties at a cash
purchase price greater than the price specified in the Offer Notice and on other terms no
more favorable to the transferees thereof than the terms set forth in the Offer Notice. If
the Company has not elected to offer to purchase the Common Units being offered, then the
Transferring Investor may, within six (6) months after the expiration of the Election
Period, Transfer such Common Units to any Person at any price and on any terms. Any Common
Units not Transferred within such six (6) month period shall be reoffered to the Company
under this Section 2(a)(i) prior to any subsequent Transfer; provided,
further, that the restrictions and rights specified in this Section 2(a)(i)
shall not be applicable if (x) Stephen J. Cloobeck is no longer actively involved in the
day-to-day management of the Company or (y) an Event of Default shall have occurred and be
continuing with respect to the Senior Secured Notes and the holders thereof shall have
accelerated the Senior Secured Notes or shall have otherwise exercised any of their rights
or remedies thereunder.

     (ii) Notwithstanding the rights and restrictions set forth in Section 2(a)(i)
at any time and from time to time after August 13, 2019, any Investor may require the
Company to repurchase all or any portion of its Common Units (the “Put”) for cash
consideration, payable within sixty (60) business days after the Company’s receipt of notice
of exercise of the Put, equal to the product of (A) the percentage of the common

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equity of the Company held by such holder and (B) the Fair Market Value of the Company.

     (iii) Any CDP Investor may Transfer Equityholder Units (A) to any Person (provided,
that, unless waived in writing by the Majority Investor Holders, such Person shall have
complied with the requirements of Section 2(b) and 2(c)(ii) as well as
Article 11 of the Operating Agreement) or (B) pursuant to an Approved Company Sale (as
herein defined); provided that if any CDP Investor intends to Transfer any Common
Units pursuant to Section 2(a)(iii)(A), such CDP Investor (the “CDP Transferring
Investor”) shall deliver a Sale Notice to the Company including a description of the
proposed number of Common Units intended to be transferred. The Company may submit an offer
to purchase all (but not less than all) of the Common Units specified in the Sale Notice.
Any such offer shall be made by delivering an Offer Notice to the CDP Transferring Investor
as soon as practical but in any event within ten (10) business days after the delivery of
the Sale Notice. Any such Offer Notice shall include the proposed cash purchase price and
other material terms of the proposed purchase. A proposed Offer Notice shall be valid only
if such notice contains firm and enforceable commitments from reputable sources for the
financing, provided, that if the CDP Transferring Investors validly accepts any proposed
Offer Notice, then such proposed Offer Notice shall be deemed to be a valid Offer Notice.
The Offer Notice will constitute an irrevocable offer by the Company to acquire the Common
Units specified in the Offer Notice from the CDP Transferring Investor at the price and on
the terms specified in the Offer Notice. If the Company elects to offer to purchase Common
Units from the CDP Transferring Investor and the CDP Transferring Investor accepts such
offer, the transfer of such shares shall be consummated as soon as practical after the
delivery of the Offer Notice to the CDP Transferring Investor, but in any event within the
Election Period. If the CDP Transferring Investor has rejected any such offer by the
Company, then the CDP Transferring Investor may, within six (6) months after the expiration
of the Election Period, Transfer such Common Units to one or more third parties at a cash
purchase price greater than the price specified in the Offer Notice and on other terms no
more favorable to the transferees thereof than the terms set forth in the Offer Notice. If
the Company has not elected to offer to purchase the Common Units being offered, then the
CDP Transferring Investor may, within six (6) months after the expiration of the Election
Period, Transfer such Common Units to any Person at any price and on any terms. Any Common
Units not Transferred within such six (6) month period shall be reoffered to the Company
under this Section 2(a)(iii) prior to any subsequent Transfer. Notwithstanding the
foregoing, any member of CDP may Transfer its membership interests in CDP at any time so
long as Stephen J. Cloobeck retains directly or through one or more trusts or other entities
established for tax or estate planning purposes, a majority of the voting and economic
interests therein; it being understood and agreed that any Transfer (or series of related
Transfers) of membership interests in CDP by Stephen J. Cloobeck or such trusts or other
entities after which they will collectively hold less than a majority of the voting or
economic interests in CDP shall constitute a “Transfer” of Equityholder Units by a CDP
Investor under this Agreement. Any Transfer pursuant to Section 2(a)(iii)(A) (other
than to the Company pursuant to Section 2(a)(iii)) shall be made in accordance with
Section 2(b).

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     (iv) Any Other Investor may Transfer Equityholder Units only (A) with the prior consent
or approval of the Majority Common Holders and the Company, to any Person, provided, that,
unless waived in writing by the Majority Common Holders and the Company, such Person shall
have complied with the requirements of Section 2(c)(ii) or (B) pursuant to an
Approved Company Sale (as herein defined); provided that if any Other Investor
intends to Transfer any Common Units pursuant to Section 2(a)(iv)(A), such Other
Investor (the “Other Transferring Investor”) shall deliver a Sale Notice to the
Company including a description of the proposed number of Common Units intended to be
transferred. The Company may submit an offer to purchase all (but not less than all) of the
Common Units specified in the Sale Notice. Any such offer shall be made by delivering an
Offer Notice to the Other Transferring Investor as soon as practical but in any event within
ten (10) business days after the delivery of the Sale Notice. Any such Offer Notice shall
include the proposed cash purchase price and other material terms of the proposed purchase.
A proposed Offer Notice shall be valid only if such notice contains firm and enforceable
commitments from reputable sources for the financing, provided, that if the Other
Transferring Investors validly accepts any proposed Offer Notice, then such proposed Offer
Notice shall be deemed to be a valid Offer Notice. The Offer Notice will constitute an
irrevocable offer by the Company to acquire the Common Units specified in the Offer Notice
from the Other Transferring Investor at the price and on the terms specified in the Offer
Notice. If the Company elects to offer to purchase Common Units from the Other Transferring
Investor and the Other Transferring Investor accepts such offer, the transfer of such shares
shall be consummated as soon as practical after the delivery of the Offer Notice to the
Other Transferring Investor, but in any event within the Election Period. If the Other
Transferring Investor has rejected any such offer by the Company, then the Other
Transferring Investor may, within six (6) months after the expiration of the Election
Period, Transfer such Common Units to one or more third parties at a cash purchase price
greater than the price specified in the Offer Notice and on other terms no more favorable to
the transferees thereof than the terms set forth in the Offer Notice. If the Company has
not elected to offer to purchase the Common Units being offered, then the Other Transferring
Investor may, within six (6) months after the expiration of the Election Period, Transfer
such Common Units to any Person at any price and on any terms. Any Common Units not
Transferred within such six (6) month period shall be reoffered to the Company under this
Section 2(a)(iv) prior to any subsequent Transfer.

          (b) Tag-Along Rights.

     (i) For so long as the CDP Investors hold at least 40% of the aggregate outstanding
Common Units, subject to Section 2(c)(i), at least 15 business days prior to the
Transfer by any CDP Investor (the “Transferring Equityholder”) of any class or
series of any type of Equityholder Units to any Person(s) (other than pursuant to (x) a
Public Offering (y) an Approved Company Sale or (z) a sale to the Company pursuant to an
Offer Notice under Section 2(a)(iii)), the applicable Transferring Equityholder
shall deliver a written notice (the “Transfer Notice”) to each of the Investors (the
“Recipient Equityholders”) (with a copy of such notice to the Company), specifying
in reasonable detail the identity of the prospective transferee(s), the type, class or
series, and the number of the Equityholder Units to be Transferred, and the other material
terms and

11

 

conditions of such contemplated Transfer, including the cash (or cash equivalent)
purchase price therefor. Any Recipient Equityholder may elect to participate in such
contemplated Transfer by delivering written notice to the Transferring Equityholder within
15 business days after delivery of the applicable Transfer Notice. If any Recipient
Equityholder elects to participate in such Transfer, each Recipient Equityholder who elects
to participate (the “Tagging Investors”, and collectively with the Transferring
Equityholder, the “Participating Equityholders”) shall be entitled to sell in such
contemplated Transfer, at the same price and on the same terms, up to a number of each class
or series of each type of Equityholder Units to be sold (or deemed to be sold as a result of
an indirect sale, transfer, assignment, pledge or other disposition or encumbrance) in such
contemplated Transfer equal to the product of (x) the quotient determined by dividing the
percentage of such class or series of such type of Equityholder Units owned by such Tagging
Investor by the aggregate percentage of such class or series of such type of Equityholder
Units owned collectively by all of the Participating Equityholders and (y) the aggregate
number of such class or series of such type of Equityholder Units to be sold (or deemed to
be sold as aforesaid) in such contemplated Transfer. Each Tagging Investor shall pay its
pro rata share (based on the amount of consideration received) of the reasonable
out-of-pocket expenses incurred by the Participating Equityholders in connection with such
Transfer and shall take all reasonably necessary and desirable actions as reasonably
directed by the applicable Transferring Equityholder in connection with the consummation of
such Transfer.

     (ii) Notwithstanding the foregoing, in connection with any Transfer under Section
2(b)(i), (i) no Tagging Investor will be required to grant any indemnification rights
except indemnification rights which constitute identical indemnification rights for all
Participating Equityholders (pro rata based upon the consideration received and not joint
and several, other than any such obligations that relate solely to a particular
Participating Equityholder, such as indemnification with respect to representations and
warranties or covenants made by such Participating Equityholder, in respect of which only
such Participating Equityholder shall be liable), (ii) no Tagging Investor shall be required
to make any representation or warranty that is not made by all other Participating
Equityholders, (iii) any representations and warranties to be made by a Tagging Investor
shall be limited to representations and warranties related to such Tagging Investor’s
authority, ownership of Equityholder Units and ability to convey title to such Equityholder
Units, (iv) no Tagging Investor shall be liable for the inaccuracy of any representation or
warranty made by any other Person (except to the extent of any indemnification rights
granted by such Tagging Investor pursuant to Section 2(b)(ii)(i) for breaches of
representations and warranties by the Company or its Subsidiaries), and (v) no Tagging
Investor which is an institutional investor or investment fund shall be required to enter
into any restrictive covenant, including without limitation, any non-competition or
non-solicitation arrangement which survives the closing of such Transfer.

          (c) Permitted Transfers.

     (i) The restrictions contained in Section 2(a) and 2(b) shall not apply
with respect to any Transfer of Equityholder Units by any Equityholder (A) in the case of an
individual Equityholder, pursuant to applicable laws of descent and distribution or, if

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such Transfer is made for bona fide estate planning purposes (which bona fide estate
planning purposes, if requested by the Board, shall be verified by a legal opinion from
counsel experienced in such matters), then to any member of such Equityholder’s Family
Group, (B) in the case of a non-individual Equityholder, to or among its Affiliates, or to
any of their lenders as collateral security, (C) in the case of a Guggenheim Investor, a
Transfer to or among any Guggenheim Entity, so long as Guggenheim Capital, LLC or one of its
Affiliates has the sole power to vote and exercise contractual rights with respect to such
transferred Units, (D) in the case of a Wellington Investor, a Transfer to or among any
Wellington Entity, so long as Wellington Management Company, LLP or one of its Affiliates
has a management or investment management relationship with the transferee, (E) in the case
of a Silver Rock Entity, to any one or more of the following: (I) any direct or indirect
member, owner, partner, manager, officer or director of a Silver Rock Entity, (II) any
family member of any Person in clause (I), (III) any trust, retirement or benefit plan,
individual retirement account or other entity formed or existing for the benefit of any
Person(s) in clause (I) or (II), or (IV) any philanthropic, charitable or non-profit
organization or foundation established in whole or in part by any Person(s) in clause (I) or
(II), (F) in the case of any Investor that is an investment company registered under the
Investment Company Act, in connection with any merger, combination or consolidation of such
Investor with or into another Person that is an investment company registered under the
Investment Company Act, or (G) to any other Equityholder; provided, in each case,
that any such transferee shall have complied with the requirements of Section
2(c)(ii).

     (ii) Prior to any proposed transferee’s acquisition of Equityholder Units pursuant to a
Transfer permitted by Section 2(a)(i), 2(a)(iii) or 2(a)(iv), in each case, unless waived in
writing by the Board, or pursuant to a Transfer permitted by Section 2(c)(i), such proposed
transferee must agree to take such Equityholder Units subject to and to be fully bound by
the terms of this Agreement applicable to such Equityholder Units by executing a joinder to
this Agreement substantially in the form attached hereto as Exhibit A and delivering such
executed joinder to the Secretary of the Company prior to the effectiveness of such Transfer
(unless such Transfer is pursuant to applicable laws of descent and distribution, in which
case, such executed joinder shall be delivered to the Secretary of the Company as soon as
reasonably possible after such Transfer). All transferees acquiring Equityholder Units
pursuant to a Transfer permitted by Section 2(c)(i) and executing a joinder in compliance
with this Section 2(c)(ii) are collectively referred to herein as “Permitted Transferees”.

          (d) Each Equityholder hereby covenants and agrees that such Equityholder will at all times act
in good faith with respect to its obligations under this Section 2 and will not structure a
transaction or series of related transactions for the specific purpose of avoiding its obligations
under this Section 2.

          3. Approved Company Sale.

          (a) If a Sale of the Company is approved in accordance with Section 8 (an “Approved
Company Sale”), then each holder of Equityholder Units will vote for, consent to and raise no
objections against the Approved Company Sale or the process. If the Approved

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Company Sale is structured as a merger or consolidation, then each holder of Equityholder
Units shall waive any dissenters rights, appraisal rights or similar rights in connection with such
merger or consolidation. If the Approved Company Sale is structured as a Transfer of Equityholder
Units, then each holder of Equityholder Units shall agree to sell all of his or its Equityholder
Units and rights to acquire Equityholder Units on the same terms and conditions, in all material
respects, as applicable to the respective types of Equityholder Units to be Transferred. Each
holder of Equityholder Units shall take all necessary or desirable actions in connection with the
consummation of an Approved Company Sale as requested by the Company, including, without
limitation, executing the applicable purchase agreement. Notwithstanding the foregoing, a holder
of Equityholder Units will not be required to comply with this Section 3(a) in connection with any
Approved Company Sale unless (i) no Equityholder will be required to grant any indemnification
rights except indemnification rights which constitute identical indemnification rights (pro rata
based upon the consideration received and not joint and several, other than any such obligations
that relate solely to a particular Equityholder, such as indemnification with respect to
representations and warranties or covenants made by such Equityholder, in respect of which only
such Equityholder shall be liable), (ii) no Equityholder shall be required to make any
representation or warranty that is not made by all other Equityholders, (iii) any representations
and warranties to be made by an Equityholder shall be limited to representations and warranties
related to such Equityholder’s authority, ownership of Equityholder Units and ability to convey
title to such Equityholder Units, (iv) no Equityholder shall be liable for the inaccuracy of any
representation or warranty made by any other Person (except to the extent of any indemnification
rights granted by such Equityholder pursuant to Section 3(a)(i) for breaches of
representations and warranties by the Company or its Subsidiaries), and (v) no Equityholder which
is an institutional investor or investment fund shall be required to enter into any restrictive
covenant, including without limitation, any non-competition or non-solicitation arrangement which
survives the closing of such Transfer.

          (b) The foregoing obligations of the Equityholders with respect to an Approved Company Sale
are subject to the satisfaction of the following conditions: (i) such Approved Company Sale shall
be a bona fide Sale of the Company to a party which is not an Affiliate of either the Company or
any Equityholder or an Affiliate of any of the foregoing, (ii) upon the consummation of such
Approved Company Sale the aggregate consideration payable upon consummation of such Approved Sale
to all Equityholders in respect of their Equity Equivalents shall be apportioned and distributed as
between the different classes or series of Equity Equivalents in accordance with the distribution
priorities set forth in Article 7 of the LLC Agreement as in effect immediately prior to such
Approved Company Sale, and as between holders of Equity Equivalents of a particular class or
series, ratably based on the Equity Equivalents of such class or series actually Transferred in the
Approved Company Sale and (iii) each holder of then currently exercisable or convertible rights to
acquire Equity Equivalents shall be given an opportunity to exercise such rights prior to the
consummation of the Approved Company Sale and participate in such sale as a holder of such class of
Equity Equivalents.

          (c) The Company will bear the costs of any actual or proposed Approved Company Sale, which
costs will allocated pro rata to the holders of the Common Units. Costs incurred by the holders of
Equityholder Units on their own behalf will not be considered costs of the Approved Company Sale;
provided, that in the event the Approved Company Sale is

14

 

          consummated, the Company shall pay the reasonable attorney’s fees and expenses of one counsel
chosen by the Majority Common Holders in connection with the Approved Company Sale.

          4. Financial Statements and Access to Information.

          (a) Financial Statements; Annual Budget; Other Information. The Company shall deliver
to (x) each Investor which holds Common Units representing at least 1% of the aggregate number of
outstanding Common Units of the Company and, (y) at such time when the CDP Investors no longer
constitute the Majority Common Holders, each CDP Investor (so long as such CDP Investor holds
Common Units representing at least 1% of the aggregate number of outstanding Common Units of the
Company):

     (i) within 30 days after the end of each monthly accounting period in each fiscal year
of the Company (other than any monthly accounting period ending on the last day of a fiscal
quarter of the Company), unaudited consolidated statements of income and cash flows of the
Company and its Subsidiaries for such monthly period (as well as unaudited consolidated
statements of income of the Company and its Subsidiaries for the period from the beginning
of the fiscal year to the end of such month) and unaudited consolidated balance sheets of
the Company and its Subsidiaries as of the end of such monthly period (and such financial
statements shall set forth in each case comparisons to the Company’s and its Subsidiaries’
corresponding period in the preceding fiscal year). Such financial statements shall be
prepared in accordance with generally accepted accounting principles, consistently applied,
subject to the absence of footnote disclosures and to normal year-end adjustments;

     (ii) within 45 days after the end of each quarterly accounting period in each fiscal
year of the Company (other than any quarterly accounting period ending on the last day of a
fiscal year of the Company), unaudited consolidated statements of income and cash flows of
the Company and its Subsidiaries for such quarterly period (as well as unaudited
consolidated statements of income of the Company and its Subsidiaries for the period from
the beginning of the fiscal year to the end of such quarter) and unaudited consolidated
balance sheets of the Company and its Subsidiaries as of the end of such quarterly period
(and such financial statements shall set forth in each case comparisons to the Company’s and
its Subsidiaries’ corresponding period in the preceding fiscal year). Such financial
statements shall be prepared in accordance with generally accepted accounting principles,
consistently applied, subject to the absence of footnote disclosures and to normal year-end
adjustments;

     (iii) within 90 days after the end of each fiscal year of the Company, audited
consolidated statements of income and cash flows of the Company and its Subsidiaries for
such fiscal year, and audited consolidated balance sheets of the Company and its
Subsidiaries as of the end of such fiscal year (and such financial statements shall set
forth in each case comparisons to the Company’s and its Subsidiaries’ corresponding period
in the preceding fiscal year). Such financial statements shall be prepared in accordance
with generally accepted accounting principles, consistently applied;

15

 

     (iv) within 90 days after the end of each fiscal year of the Company, an annual budget
of the Company and its Subsidiaries (presented on a monthly basis) containing, among other
things, (i) pro forma financial statements for each fiscal quarter of the next fiscal year
of the Company and (ii) information regarding the aggregate compensation proposed to be paid
during such fiscal year to Executive Officers of the Company;

     (v) promptly following receipt by the Company, each audit response letter, accountant’s
management letter and other written report submitted to the Company by its independent
public accountants in connection with an annual or interim audit of the books of the Company
or any of its Subsidiaries;

     (vi) promptly after the commencement thereof, notice of all actions, suits, claims,
proceedings, investigations and inquiries that could materially and adversely affect the
Company or any of its Subsidiaries; and

     (vii) promptly, from time to time, such other information regarding the business,
prospects, financial condition, operations, property or affairs of the Company and its
Subsidiaries as any Investor or CDP Investor reasonably may request.

          (b) Access to Information. The Company shall permit (w) any Investor which holds
Common Units representing at least 5% of the aggregate number of outstanding Common Units, (x) any
Guggenheim Investor, so long as the Guggenheim Common Unit Threshold is met, (y) any Wellington
Investor, so long as the Wellington Common Unit Threshold is met and (z) at such time when the CDP
Investors no longer constitute the Majority Common Holders, each CDP Investor (so long as the CDP
Common Unit Threshold is met); and each of their respective representatives (including, without
limitation, its legal counsel and accountants), during normal business hours and such other times
as any such holder may reasonably request, to (i) visit and inspect any of the properties of the
Company and its Subsidiaries, (ii) examine the corporate, financial and similar type records,
reports and documents of the Company and its Subsidiaries, including, without limitation, all
internal management documents, reports of operations, reports of adverse developments, copies of
any management letters, communications with equityholders or directors, press releases and
registration statements, and make copies thereof or extracts therefrom and (iii) discuss the
affairs, finances and accounts of any such entities with any of the Executive Officers and or
senior managers of the Company or any of its Subsidiaries. Notwithstanding the foregoing, such
access shall be arranged in prior consultation with Stephen J. Cloobeck (or, if Stephen J. Cloobeck
is no longer serving as an officer of the Company, David F. Palmer or, if David F. Palmer is no
longer serving as an officer of the Company, then the Person then serving as President of the
Company), except with respect to communications with Stephen J. Cloobeck, David F. Palmer or any
person appointed as Chief Financial Officer after the date hereof.

          5. Legend.

          (a) The Equityholder Units shall initially be uncertificated. However, in the event that the
Company determines at a later date to issue certificates representing the Equityholder Units, each
certificate or instrument evidencing Equityholder Units and each certificate or instrument issued
in exchange for or upon the Transfer of any Equityholder Units

16

 

(if such securities remain Equityholder Units (as defined herein) after such Transfer) shall
be stamped or otherwise imprinted with a legend in substantially the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY
ISSUED ON _________, 20__ AND HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY
STATE SECURITIES OR BLUE SKY LAWS, AND MAY NOT BE SOLD, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM
REGISTRATION THEREUNDER. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE ALSO SUBJECT TO A FOURTH AMENDED AND RESTATED
SECURITYHOLDERS AGREEMENT DATED AS OF JULY 21, 2011, AS MAY BE
AMENDED FROM TIME TO TIME BY AND AMONG THE ISSUER OF SUCH SECURITIES
AND CERTAIN OF THE ISSUER’S SECURITYHOLDERS. A COPY OF SUCH FOURTH
AMENDED AND RESTATED SECURITYHOLDERS AGREEMENT WILL BE FURNISHED
WITHOUT CHARGE BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN
REQUEST.”

The legend set forth above regarding this Agreement shall be removed from the certificates
evidencing any securities which cease to be Equityholder Units. Upon the request of any
Equityholder, the Company shall remove the Securities Act portion of the legend set forth above
from the certificate or certificates for such Equityholder Units; provided that such
Equityholder Units (i) are eligible (as reasonably determined by the Company) for sale pursuant to
Rule 144 (or any similar rule or rules then in effect) under the Securities Act or (ii) have been
sold pursuant to Rule 144 or an effective registration statement.

          (b) Unless waived by the Company, no Equityholder may Transfer any Equityholder Units (except
pursuant to an effective registration statement under the Securities Act) without first delivering
to the Company an opinion of counsel reasonably acceptable in form and substance to the Company
(which counsel will be reasonably acceptable to the Company) that registration under the Securities
Act is not required in connection with such Transfer. If such opinion of counsel reasonably
acceptable in form and substance to the Company further states that no subsequent Transfer of such
Equityholder Units will require registration under the Securities Act (including due to such
Equityholder Units being eligible for sale pursuant to Rule 144 (or any similar rule or rules then
in effect) under the Securities Act), the Company will promptly upon such Transfer deliver new
certificates for such securities (if such securities are certificated as of such time) which do not
bear the Securities Act portion of the legend set forth in Section 5(a).

          6. Transfers in Violation of Agreement. Any Transfer or attempted Transfer of any
Equityholder Units in violation of any provision of this Agreement or the LLC Agreement

17

 

shall be null and void, and the Company shall not record such Transfer on its books or treat
any purported transferee of such Equityholder Units as the owner of such securities for any
purpose.

          7. Preemptive Rights.

          (a) If, at any time after the date hereof and prior to the consummation of a Qualified Public
Offering, the Company wishes to issue any Units or any options, warrants or other rights to acquire
Units or any notes or other Convertible Securities, other than Excluded Units (all such Units and
other rights and securities other than Excluded Units, collectively, the “Equity
Equivalents”), to any Person or Persons, the Company shall promptly deliver a notice of
intention to sell or otherwise issue (the “Company’s Notice of Intention to Sell”) to each
Investor setting forth a description and the number of the Equity Equivalents and any other
securities proposed to be issued, the proposed purchase price and terms of sale, including the
identity of the prospective transferee(s). Upon receipt of the Company’s Notice of Intention to
Sell, each Investor shall have the right to elect to purchase, at the price and on the terms stated
in the Company’s Notice of Intention to Sell, a number of the Equity Equivalents equal to the
product of (i) the percentage determined by dividing the number of Common Units then owned by such
Investor by the number of vested Common Units then outstanding multiplied by (ii) the number of
Equity Equivalents proposed to be issued (as described in the applicable Company’s Notice of
Intention to Sell); provided that, notwithstanding anything contained herein to the
contrary, if the Company is issuing Equity Equivalents together as a unit with the issuance of any
debt or other equity securities of the Company or any of its Subsidiaries, then any Investor who
elects to purchase such Equity Equivalents pursuant to this Section 7 must also purchase a
corresponding proportion of such other debt or equity securities, all at the proposed purchase
price and on terms of sale as specified in the applicable Company’s Notice of Intention to Sell.
Such election shall be made by the electing Investor by written notice to the Company within ten
(10) business days after receipt by such Investor of the Company’s Notice of Intention to Sell (the
“Acceptance Period”).

          (b) To the extent an effective election to purchase has not been received from any Investor
pursuant to subsection (a) above in respect of the Equity Equivalents proposed to be issued
pursuant to the applicable Company’s Notice of Intention to Sell, the Company may, at its election,
during a period of one hundred and eighty (180) days following the expiration of the applicable
Acceptance Period, issue and sell the remaining Equity Equivalents to be issued and sold to any
Person at a price and upon terms not more favorable to such Person than those stated in the
applicable Company’s Notice of Intention to Sell; provided, however, that failure by any
Investor to exercise its option to purchase with respect to one issuance and sale of Equity
Equivalents shall not affect its option to purchase Equity Equivalents in any subsequent issuance
and sale. In the event the Company has not sold any Equity Equivalents covered by a Company’s
Notice of Intention to Sell within such one hundred and eighty (180) day period, the Company shall
not thereafter issue or sell such Equity Equivalents, without first offering such Equity
Equivalents to each Investor in the manner provided in this Section 7.

          (c) If any Investor gives the Company notice, pursuant to the provisions of this Section
7, that such Investor desires to purchase any Equity Equivalents, payment therefor shall be by
check or wire transfer of immediately available funds, against delivery of the securities (which
securities shall be issued free and clear of any liens or encumbrances) at the

18

 

executive offices of the Company no later than the last closing date fixed by the Company for
the sale of the applicable Equity Equivalents, which last closing date shall be no earlier than 15
business days after the date the Company delivers the applicable Company’s Notice of Intention to
Sell. In the event that any proposed sale is for a consideration other than cash, such Investor
may pay cash in lieu of all (but not part) of such other consideration, in the amount determined
reasonably and in good faith by the Board to represent the fair value of such consideration other
than cash.

          8. Protective Provisions. (a) The Company shall comply with the following covenants,
unless it has received the prior written consent of (x) the Majority CDP Holders (so long as the
CDP Investors meet the Minimum Threshold) and (y) either (A) the Majority Wellington
Holders (so long as the Wellington Investors meet the Minimum Threshold) or (B) the Majority
Guggenheim Holders (so long as the Guggenheim Investors meet the Minimum Threshold):

     (i) The Company shall make Tax Distributions to the holders of Units as and when
required under the LLC Agreement (and the Company shall cause its direct and indirect
Subsidiaries to make distributions sufficient to satisfy such obligation); provided,
however, that, so long as the Senior Note Indenture is in effect and to the extent funded by
distributions from DRC and its Subsidiaries, the aggregate Tax Distributions since the Issue
Date shall not exceed the lesser of:

     (A) the aggregate amount since the Issue Date of the relevant tax (including
any penalties and interest) that DRC would owe if it were filing a separate tax
return (or a separate consolidated or combined return with its Subsidiaries that are
members of DRC’s consolidated or combined group), taking into account any carryovers
and carrybacks of tax attributes (such as net operating losses) of DRC and such
Subsidiaries from other taxable years; and

     (B) the aggregate amount of the relevant tax that the Equityholders actually
owe to the appropriate taxing authority after the date hereof;

provided, further, however, that any Tax Distributions received from the Company from funds
provided by DRC and its Subsidiaries shall be paid over to the appropriate taxing authority
within 30 days of receipt by the Equityholders of such Tax Distributions or refunded to the
Company (which refunded amounts shall be paid to DRC);

     (ii) The Company shall maintain and cause each of its Subsidiaries to maintain its
existence, material licenses and material permits in good standing;

     (iii) The Company shall comply and cause each of its Subsidiaries to comply with all
applicable material laws, rules and regulations and all of its material contractual
obligations;

     (iv) The Company shall pay and cause each of its Subsidiaries to pay all required taxes
as and when due and payable;

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     (v) Neither the Company nor any of its Subsidiaries shall become a party to any
agreement which, by its terms: (1) expressly restricts the Company’s performance of this
Agreement or any other Transaction Document or (2) imposes any non-competition or other
restrictive covenant obligation on Investor or any of their Affiliates without such
Investor’s prior written consent;

     (vi) The Company shall maintain and cause each of its Subsidiaries to maintain
insurance (in accordance with past practice and industry standards);

     (vii) The Company shall hold meetings of the Board on at least a quarterly basis;

     (viii) The Company shall not (A) create or issue any equity interests of the Company
senior to the Common Units with respect to distributions (including, without limitation, the
distribution of assets on the liquidation, dissolution or winding up of the Company) or
rights of redemption, or (B) issue or transfer (or cause to be issued or transferred) any
equity securities or equity-linked securities in any of its Subsidiaries (other than
Unrestricted Subsidiaries) to any Person other than the Company or any of its direct or
indirect wholly-owned Subsidiaries unless each Investor is offered an opportunity to
participate in such issuance or transfer as if it was an offering of Units by the Company
subject to the preemptive rights of Section 7(a);

     (ix) The Company shall not repurchase or redeem any equity interest of the Company or
Convertible Securities in excess of $5,000,000 in the aggregate per calendar year, other
than (A) Equity Equivalents held by any employee of the Company or any of its Subsidiaries
or the Management Company in the event of such employee’s death, retirement or termination
of employment to the extent permitted under the Senior Note Indenture at a price not to
exceed fair market value, (B) the repurchase or redemption of Units pursuant to the
Redemption Agreement or the CDP Redemption Agreement or (C) any repurchase or redemption
(including any repurchase or redemption of the Guggenheim Warrant) which is offered pro rata
to all Equityholders;

     (x) The Company shall not merge or consolidate, or permit any Material Subsidiary to
merge or consolidate, with or into any Person (other than mergers or consolidations among
the Company or any of its direct or indirect wholly-owned Subsidiaries), or sell, lease
transfer, convey or dispose of, in one or a series of related transactions, all or
substantially all of the assets of the Company or any Material Subsidiary, or otherwise
effectuate a Sale of the Company;

     (xi) the Company shall not consummate, or permit any Material Subsidiary (other than an
Unrestricted Subsidiary) to consummate, a reorganization or recapitalization of the Company
or any Material Subsidiary (other than Unrestricted Subsidiaries) or effect any other change
in the capital structure of the Company or any Material Subsidiary (other than Unrestricted
Subsidiaries), other than mergers or consolidations among the Company or any of its direct
or indirect wholly-owned Subsidiaries;

20

 

(xii) The Company shall not, and shall not permit any of its Subsidiaries to, directly
or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or
indirectly liable, contingently or otherwise, with respect to, any Indebtedness in excess of
any limitations on Indebtedness set forth in the Senior Note Indenture;

     (xiii) The Company shall not create, incur or assume, or permit any of its Subsidiaries
to create, incur or assume, any lien or encumbrance of any kind upon the assets of the
Company or any of its Subsidiaries which is not permitted under the Senior Note Indenture;

     (xiv) The Company shall not make any material change to the Principal Line of Business
conducted by the Company and its Subsidiaries;

     (xv) The Company shall not acquire any interest in or contribute capital to, or permit
any of its Subsidiaries to acquire any interest in or contribute capital to, any Person
(including, without limitation, any Unrestricted Subsidiary) or business (whether by a
purchase of assets, purchase of equity, merger or otherwise), or enter into any joint
venture, which requires a capital investment by the Company and/or its Restricted
Subsidiaries to consummate such transaction in excess of $20,000,000 in the aggregate or
which would not be permitted by the Senior Note Indenture;

     (xvi) The Company shall not grant options or issue Equity Equivalents to any employee
of the Company or any of its Subsidiaries other than options or Equity Equivalents relating
to Common Units pursuant to equity incentive plans approved by the Board which Common Units
shall not exceed 112.227 Common Units (adjusted for unit splits, unit combinations and other
similar transactions occurring after the date hereof);

     (xvii) The Company shall not permit any of the Company’s Subsidiaries (other than
Unrestricted Subsidiaries) to issue any equity securities or Convertible Securities to any
Person other than the Company or any of the Company’s direct or indirect wholly-owned
Subsidiaries, or permit any other transaction to occur which would result in any direct or
indirect Subsidiary of the Company (other than any Unrestricted Subsidiary) not being a
direct or indirect wholly-owned Subsidiary of the Company;

     (xviii) The Company shall not, and shall not permit any of its Subsidiaries to, enter
into or permit to exist any transaction (including the purchase, sale, lease or exchange of
any property, employee compensation arrangements or the rendering of any service) with, or
for the benefit of, any Affiliate of the Company or any of its Subsidiaries, member of the
Board or Executive Officer of the Company (or any Affiliate, Executive Officer, director,
family member or equityholder of the foregoing); provided, however, that this clause (xviii)
shall not apply to the following:

     (A)
Reasonable ordinary course employment, consultant and director arrangements
approved by the Board, including reasonable compensation (including bonuses) and
other reasonable benefits (including retirement, health, severance, stock option and
other benefit plans) for directors, officers, consultants and employees of the
Company and its Subsidiaries;

21

 

     (B)
transactions between or among the Company and/or any of its Subsidiaries;

     (C)
any transaction with any non-Affiliate that becomes an Affiliate as a
result of such transaction;

     (D)
loans or advances to employees or consultants (other than to Stephen J.
Cloobeck or David F. Palmer or any family member of either of them (or any entity
owned or controlled by Stephen J. Cloobeck, David F. Palmer or any family member of
either of them)) in the ordinary course of business and consistent with past
practice, and the cancellation or forgiveness or modification of the terms of such
loans or advances;

     (E)
any agreement existing on the date hereof, as in effect on the date hereof,
or as modified, amended, amended and restated, supplemented or replaced so long as
the terms of such agreement as modified, amended, amended and restated, supplemented
or replaced (x) do not result in an increase of more than 10% in the net cost
thereof to the Company and its Subsidiaries or (y) are not materially in other
respects more disadvantageous to the Company and its Subsidiaries, than the terms of
such agreement as in effect on the date hereof;

     (F)
any transaction approved pursuant to the requirements of Section 8(b); and

     (G)
any transaction not covered by clauses (A) through (F) above with or for
the benefit of an Affiliate of the Company (other than a family member of an
Affiliate or any entity owned or controlled by such family member) if (x) the amount
of such transaction, along with any other transaction (whether or not with the same
Person) permitted under this Section 8(a)(xviii)(G), is $3,600,000 or less
in any fiscal year and (y) the terms and conditions of such transaction are at least
as favorable to the Company or its Subsidiaries as would be obtained through an
arm’s-length negotiation with an independent party; and

     (xix) The Company shall not agree to any action or inaction that would not comply with
any of the foregoing covenants.

          (b) Notwithstanding anything to the contrary set forth herein, other than transactions covered
by Section 9, (i) any transaction between the Company or any of its Subsidiaries, on the
one hand, and any Guggenheim Entity, on the other hand, shall require the prior written consent of
(A) the Majority CDP Holders (so long as the CDP Investors meet the Minimum Threshold) and
(B) the Majority Wellington Holders (so long as the Wellington Investors meet the Minimum
Threshold); and (ii) any transaction between the Company or any of its Subsidiaries, on the one
hand, and any Wellington Entity, on the other hand, shall require the prior written consent of (A)
the Majority CDP Holders (so long as the CDP Investors meet the Minimum Threshold) and (B)
the Majority Guggenheim Holders (so long as the Guggenheim Investors meet the Minimum Threshold).

          9. Right of Participation.

22

 

          (a) To the extent any Guggenheim Entity shall propose to enter into an equity or debt
financing transaction with any Unrestricted Subsidiary (other than pursuant to Section
9(b)), including issuing any equity, equity-linked or debt securities to any Guggenheim Entity,
then at least ten (10) business days prior to the closing of such transaction, the Company shall
offer the Wellington Investors by written notice (the “Wellington Participation Notice”)
the right to elect to participate in such transaction with such Unrestricted Subsidiary, up to 20%
in the aggregate of the total transaction, on terms and conditions no less favorable to such
Wellington Investors than the terms and conditions offered to such Guggenheim Entity(ies). The
Wellington Investors shall have five (5) business days after receipt of such Wellington
Participation Notice to elect, by written notice to the Company, to participate in such
transaction. The closing date for such transaction shall be no earlier than ten (10) business days
after the date the Company delivers the applicable Wellington Participation Notice to the
Wellington Investors. The Wellington Investors may assign their rights of participation under this
Section 9(a) to any Wellington Entity.

          (b) To the extent any Wellington Entity shall propose to enter into an equity or debt
financing transaction with any Unrestricted Subsidiary (other than pursuant to Section
9(a)), including issuing any equity, equity-linked or debt securities to any Wellington Entity,
then at least ten (10) business days prior to the closing of such transaction, the Company shall
offer the Guggenheim Investors by written notice (the “Guggenheim Participation Notice”)
the right to elect to participate in such transaction with such Unrestricted Subsidiary, up to 20%
in the aggregate of the total transaction, on terms and conditions no less favorable to such
Guggenheim Investors than the terms and conditions offered to such Wellington Entity(ies). The
Guggenheim Investors shall have five (5) business days after receipt of such Guggenheim
Participation Notice to elect, by written notice to the Company, to participate in such
transaction. The closing date for such transaction shall be no earlier than ten (10) business days
after the date the Company delivers the applicable Guggenheim Participation Notice to the
Guggenheim Investors. The Guggenheim Investors may assign their rights of participation under this
Section 9(b) to any Guggenheim Entity.

          10. Director and Officer Liability Insurance. The Company (or one of its
Subsidiaries) will maintain director and officer liability insurance coverage in amounts customary
in the industry.

          11. Use of Investors’ Name. Each of the parties hereto agrees that neither it nor any
of its employees, directors, officers, agents or representatives will directly or indirectly use or
refer in writing to the name of any Investor or its investment adviser, if applicable, or any
derivation thereof, for any purpose whatsoever (including, without limitation, in any filing with
any governmental authority, any press release, any public announcement or statement or in any
interview or other discussion with any reporter or other member of the media), without the prior
written consent of such Investor or investment adviser, if applicable, with respect to each such
use or reference.

          12. Amendment and Waiver. No modification, amendment or waiver of any provision of
this Agreement shall be effective against the Equityholders or the Company unless such modification
or amendment is approved in writing by (i) the Company and (ii) the Majority Investor Holders; and
any modification or amendment to which such written consent is obtained

23

 

will be binding upon the Company and each Equityholder; provided, however,
that if any modification, amendment or waiver of any provision of this Agreement that would
materially and adversely affect the rights, interests or obligations of any CDP Investor or any
Investor hereunder in a manner differently than other Equityholders holding the same class or
series of Units, then such modification, amendment or waiver shall not be effective against such
CDP Investor or such Investor, as applicable, without the written consent of such CDP Investor or
such Investor, as applicable, with respect thereto; provided further that any modification,
amendment or waiver of the provisions of Section 8 or this Section 12 shall not be effective
against the Wellington Investors or the Guggenheim Investors without the written consent of the
Majority Wellington Holders (so long as the Wellington Investors meet the Minimum Threshold) and
the Majority Guggenheim Holders (so long as the Guggenheim Investors meet the Minimum Threshold).
No waiver of any provision of this Agreement shall be effective against the Company unless such
waiver is approved in writing by the Company. The failure of any party to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall
not affect the right of such party thereafter to enforce each and every provision of this Agreement
in accordance with its terms. Each Equityholder shall remain a party to this Agreement only so
long as such person is the holder of record of Equityholder Units.

          13. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision or any other jurisdiction, but this Agreement shall be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision
had never been contained herein.

          14. Entire Agreement. Except as otherwise expressly set forth herein, this document
embodies the complete agreement and understanding among the parties hereto with respect to the
subject matter hereof and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related to the subject
matter hereof in any way (including, but not limited to, the Original Agreement).

          15. Termination. This Agreement will automatically terminate and be of no further
force or effect immediately after the consummation of an Approved Company Sale or a Qualified
Public Offering.

          16. Successors and Assigns. Except as otherwise provided herein, this Agreement shall
bind and inure to the benefit of and be enforceable by the Company and its successors and assigns,
including any corporation which is a successor to the Company, and the Equityholders and any
subsequent holders of Equityholder Units and the respective successors, heirs and assigns of each
of them, so long as they hold Equityholder Units.

          17. Counterparts; Facsimile. This Agreement may be executed in separate counterparts
(each of which may be transmitted via facsimile) each of which shall be an original and all of
which taken together shall constitute one and the same agreement.

24

 

          18. Remedies. The parties hereto shall be entitled to enforce their rights under this
Agreement specifically to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights existing in their favor. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of the provisions of
this Agreement and that the Company and any Equityholder may in his, her, or its sole discretion
apply to any court of law or equity of competent jurisdiction for specific performance and/or
injunctive relief (without posting a bond or other security) in order to enforce or prevent any
violation of the provisions of this Agreement.

          19. Notices. All notices, demands or other communications to be given or delivered
under or by reason of the provisions of this Agreement will be in writing and will be deemed to
have been given when delivered if delivered personally, sent via a nationally recognized overnight
courier, or sent via facsimile or e-mail to the recipient, or if sent by certified or registered
mail, return receipt requested, will be deemed to have been given two business days thereafter.
Such notices, demands and other communications shall be sent to any Equityholder at such holder’s
last address on the records of the Company, and to the Company at the address indicated below:

          To the Company:

Diamond Resorts Parent, LLC

10600 West Charleston Boulevard

Las Vegas, NV 89135

Attention: Stephen J. Cloobeck and David F. Palmer

Facsimile: (702) 798-8840

Email: david.palmer@diamondresorts.com

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

Katten Muchin Rosenman LLP

525 West Monroe Street

Suite 1900

Chicago, IL 60661

Attention: Howard S. Lanznar

Facsimile: (312) 902-1061

Email: howard.lanznar@kattenlaw.com

To CDP:

Cloobeck Diamond Parent, LLC

10600 West Charleston Boulevard

Las Vegas, NV 89135

Attention: Stephen J. Cloobeck and David F. Palmer

Facsimile: (702) 798-8840

Email: david.palmer@diamondresorts.com

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

25

 

Katten Muchin Rosenman LLP

525 West Monroe Street

Suite 1900

Chicago, IL 60661

Attention: Howard S. Lanznar

Facsimile: (312) 902-1061

Email: howard.lanznar@kattenlaw.com

To 1818 Partners:

1818 Partners, LLC

10600 West Charleston Boulevard

Las Vegas, NV 89135

Attention: Stephen J. Cloobeck and David F. Palmer

Facsimile: (702) 798-8840

Email: david.palmer@diamondresorts.com

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

Katten Muchin Rosenman LLP

525 West Monroe Street

Suite 1900

Chicago, IL 60661

Attention: Howard S. Lanznar

Facsimile: (312) 902-1061

Email: howard.lanznar@kattenlaw.com

To Guggenheim:

DRP Holdco, LLC

135 East 57th Street

6th Floor

New York, NY 10022

Attention: Kaitlin Trinh

Facsimile: (212) 644-8396

with copies, which shall not constitute notice, to:

Guggenheim Partners

100 Wilshire Boulevard — Suite 500

Santa Monica, California 90401

Attention: Zachary D. Warren

Facsimile: (310) 576-1271

Email: zachary.warren@guggenheimpartners.com

and

26

 

Guggenheim Investment Management, LLC

135 East 57th Street

New York, New York 10022

Attention: William Hagner

Facsimile: (212) 644-8396

and

Sidley Austin LLP

One South Dearborn

Chicago, IL 60603

Attention: Richard W. Astle

Facsimile: (312) 853-7036

Email: rastle@sidley.com

To the Silver Rock Entities:

Silver Rock Financial LLC

1250 Fourth Street

Santa Monica, CA 90401

Attention: General Counsel

Facsimile: (310) 570-4599

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

Maron & Sandler

1250 Fourth Street

Santa Monica, CA 90401

Attention: David Kyman

Facsimile: (310) 570-4901

To the Wellington Purchasers:

Wellington Management Company, LLP

280 Congress Street

Boston, MA 02210

Attention: Legal and Compliance Department

Facsimile: (617) 289-5699

E-Mail: seclaw@wellington.com

27

 

provided that any notices or communications to any Wellington Purchaser
shall be sent only to the Legal and Compliance Department at Wellington
Management Company, LLP, and neither the Company nor any other party hereto
shall send notices or communications to any other Person on behalf of any
Wellington Purchaser without the prior written consent of a member of the
Legal and Compliance Department at Wellington Management Company, LLP.

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

Greenberg Traurig

One International Place

Boston, MA 02210

Attention: Bradley A. Jacobson

Facsimile: (617) 279-8402

Email: jacobsonb@gtlaw.com

or such other address, telecopy number or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.

          20. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the state of Nevada, without giving effect to any rules, principles or provisions
of choice of law or conflict of laws.

          21. Descriptive Headings. The descriptive headings of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.

          22. Dispute Resolution. The parties hereto shall, and shall cause their respective
Affiliates to, resolve any dispute, controversy or claim arising out of or in connection with this
Agreement and any transactions contemplated hereby (a “Dispute”) in accordance with the
following procedures: within 30 business days after any party has served written notice on the
other party, such Dispute shall be submitted to the Las Vegas, Nevada office of JAMS for mediation.
The mediation shall take place in Nevada. Notwithstanding anything contained in this Agreement to
the contrary, in no event will any party be obligated to participate in any mediation for more than
30 business days.

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

          24. Venue; Submission to Jurisdiction. ANY AND ALL SUITS, LEGAL ACTIONS OR
PROCEEDINGS ARISING OUT OF THIS AGREEMENT SHALL BE BROUGHT ONLY IN A STATE OR FEDERAL COURT IN OR
FOR CLARK COUNTY, NEVADA AND EACH PARTY TO THIS AGREEMENT HEREBY SUBMITS TO AND

28

 

ACCEPTS THE EXCLUSIVE JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF SUCH SUITS, LEGAL ACTIONS
OR PROCEEDINGS. TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ANY OBJECTION WHICH HE OR IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OR ANY SUCH
SUIT, LEGAL ACTION OR PROCEEDING IN SUCH COURT AND HEREBY FURTHER WAIVES ANY CLAIM THAT ANY SUIT,
LEGAL ACTION OR PROCEEDING BROUGHT IN SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

          25. No Strict Construction. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly by the parties
hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.

          26. Issuance by the Company of Additional or Units. The parties hereto hereby
acknowledge that, after the date hereof, the Company may issue additional Units to certain Persons
(the “New Members”) in accordance with the terms of this Agreement. In connection with any
such issuance, the parties hereto agree that, with the prior written consent of the Majority Common
Holders, the Company may grant (but shall be under no obligation to grant) such New Members rights
substantially similar to the rights granted to the Other Investors hereunder (provided that, if
such grant is made, each such New Member is also subject to the obligations of the Other Investors
hereunder) by causing each such New Member to execute a joinder to this Agreement substantially in
the form of Exhibit A hereto.

          27. Time of the Essence; Computation of Time. Time is of the essence for each and
every provision of this Agreement. Whenever the last day for the exercise of any privilege or the
discharge or any duty hereunder shall fall upon a Saturday, Sunday, or any date on which commercial
banks in the State of New York are authorized to be closed, the party having such privilege or duty
may exercise such privilege or discharge such duty on the next succeeding day which is a regular
business day.

* * * * *

29

 

          IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amended and Restated
Securityholders Agreement as of the date first above written.

	 	 	 	 	 
	 	COMPANY:

DIAMOND RESORTS PARENT, LLC

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

CLOOBECK DIAMOND PARENT, LLC

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

DRP HOLDCO, LLC

 	 
	 	By:  	/s/ Zachary D. Warren
 	 
	 	 	Name:  	Zachary D. Warren 	 
	 	 	Title:  	Authorized Person 	 

[signature pages continue]

[Signature Page to Fourth Amended and Restated Securityholders Agreement]

 

 

	 	 	 	 	 	 	 

	 	 	1818 PARTNERS:

1818 PARTNERS, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Chautauqua Management, LLC	 	 
	 

	 	Its:
	 	Member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David F. Palmer
 

Name: David F. Palmer
	 	 
	 

	 	 	 	Title:   Sole Manager	 	 

[signature pages continue]

[Signature Page to Fourth Amended and Restated Securityholders Agreement]

 

 

	 	 	 	 	 	 	 

	 	 	SILVER ROCK ENTITIES:

SILVER ROCK FINANCIAL LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jeff Green
 

Jeff Green
	 	 
	 

	 	Its:	 	Authorized Signatory	 	 
	 
	 	 	 	 	 	 
	 	 	IN — FP1 LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jeff Green	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Jeff Green	 	 
	 

	 	Its:	 	Authorized Signatory	 	 
	 
	 	 	 	 	 	 
	 	 	BDIF LLC	 	 
	 

	 	By:
	 	/s/ Jeff Green	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Jeff Green	 	 
	 

	 	Its:	 	Authorized Signatory	 	 
	 
	 	 	 	 	 	 
	 	 	CM — NP LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jeff Green	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Jeff Green	 	 
	 

	 	Its:
	 	Authorized Signatory	 	 

[signature pages continue]

[Signature Page to Fourth Amended and Restated Securityholders Agreement]

 

 

	 	 	 	 	 	 	 

	 	 	WELLINGTON PURCHASERS:

THE HARTFORD GROWTH OPPORTUNITIES FUND

By: Wellington Management Company, LLP

As investment adviser	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Steven M. Hoffman
 

Name: Steven M. Hoffman
	 	 
	 

	 	 	 	Title: Vice President & Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	HARTFORD GROWTH OPPORTUNITIES HLS FUND

By: Wellington Management Company, LLP

As investment adviser	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Steven M. Hoffman	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Steven M. Hoffman	 	 
	 

	 	 	 	Title:  Vice President & Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	QUISSETT INVESTORS (BERMUDA) L.P. 

By: Wellington Management Company, LLP 

As investment adviser	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Steven M. Hoffman	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Steven M. Hoffman	 	 
	 

	 	 	 	Title:  Vice President & Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	QUISSETT PARTNERS, L.P. 

By: Wellington Management Company, LLP 

As investment adviser	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Steven M. Hoffman	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Steven M. Hoffman	 	 
	 

	 	 	 	Title:  Vice President & Counsel	 	 

[signature pages continue]

[Signature Page to Fourth Amended and Restated Securityholders Agreement]

 

 

	 	 	 	 	 	 	 

	 	 	THE HARTFORD CAPITAL APPRECIATION FUND

By: Wellington Management Company, LLP

As investment adviser	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Steven M. Hoffman
 

Name: Steven M. Hoffman
	 	 
	 

	 	 	 	Title: Vice President & Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	BAY POND PARTNERS, L.P. 

By: Wellington Management Company, LLP 

As investment adviser	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Steven M. Hoffman	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Steven M. Hoffman	 	 
	 

	 	 	 	Title:  Vice President & Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	BAY POND INVESTORS (BERMUDA) L.P. 

By: Wellington Management Company, LLP 

As investment adviser	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Steven M. Hoffman	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Steven M. Hoffman	 	 
	 

	 	 	 	Title:  Vice President & Counsel	 	 

[Signature Page to Fourth Amended and Restated Securityholders Agreement]

 

 

EXHIBIT A

FORM OF JOINDER TO

FOURTH AMENDED AND RESTATED SECURITYHOLDERS AGREEMENT

          THIS JOINDER to the Fourth Amended and Restated Securityholders Agreement, dated as of July
21, 2011, by and among Diamond Resorts Parent, LLC, a Nevada limited liability company (the
“Company”) and certain securityholders of the Company (the “Agreement”), is made
and entered into as of _________ by and between the Company and _________________
(“Holder”). Capitalized terms used herein but not otherwise defined shall have the
meanings set forth in the Agreement.

          WHEREAS, Holder has acquired certain Common Units from _____________ and the Agreement and/or
the Company require Holder, as a holder of such Common Units, to become a party to the Agreement,
and Holder agrees to do so in accordance with the terms hereof.

          NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
to this Joinder hereby agree as follows:

               (A) Agreement to be Bound. Holder hereby agrees that upon execution of this Joinder,
it shall become a party to the Agreement and shall be fully bound by, and subject to, all of the
covenants, terms and conditions of the Agreement as though an original party thereto and shall be
deemed a [CDP Investor/Wellington Investor/Guggenheim Investor/Silver Rock Investor] and an
Equityholder for all purposes thereof. In addition, Holder hereby agrees that all Units held by
Holder shall be deemed Equityholder Units for all purposes of the Agreement.

               (B) Successors and Assigns. Except as otherwise provided herein, this Joinder shall
bind and inure to the benefit of and be enforceable by the Company and its successors, heirs and
assigns and Holder and any subsequent holders of Equityholder Units and the respective successors,
heirs and assigns of each of them, so long as they hold any Equityholder Units.

               (C) Counterparts. This Joinder may be executed in separate counterparts each of which
shall be an original and all of which taken together shall constitute one and the same agreement.

               (D) Notices. For purposes of Section 19 of the Agreement, all notices, demands or
other communications to the Holder shall be directed to:

[Name]

[Address]

 

 

               (E) Governing Law. This Joinder shall be governed by and construed in accordance with
the laws of the State of Nevada, without giving effect to any rules, principles or provisions of
choice of law or conflict of laws.

               (F) Descriptive Headings. The descriptive headings of this Joinder are inserted for
convenience only and do not constitute a part of this Joinder.

* * * * *

2

 

          IN WITNESS WHEREOF, the parties hereto have executed this Joinder to the Fourth Amended and
Restated Securityholders Agreement as of the date set forth in the introductory paragraph hereof.

	 	 	 	 	 
	 	DIAMOND RESORTS PARENT, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[HOLDER]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:exv10w5

Exhibit 10.5

FOURTH AMENDED AND RESTATED

OPERATING AGREEMENT OF

DIAMOND RESORTS PARENT, LLC

A NEVADA LIMITED LIABILITY COMPANY

     THIS FOURTH AMENDED AND RESTATED OPERATING AGREEMENT is made as of the 21st day of July, 2011,
by and between (i) DRP Holdco, LLC, a Delaware limited liability company (“Guggenheim”), (ii)
Cloobeck Diamond Parent, LLC, a Nevada limited liability company (“CDP”), (iii) 1818 Partners, LLC,
a Nevada limited liability company (“1818 Partners”), Silver Rock Financial LLC, IN — FP1 LLC,
BDIF LLC and CM — NP LLC (each, a “Silver Rock Entity” and collectively, the “Silver Rock
Entities”), and (iv) The Hartford Growth Opportunities Fund, Hartford Growth Opportunities HLS
Fund, Quissett Investors (Bermuda) L.P., Quissett Partners, L.P., The Hartford Capital Appreciation
Fund, Bay Pond Partners, L.P. and Bay Pond Investors (Bermuda) L.P. (each a “Wellington Purchaser”
and collectively, the “Wellington Purchasers”).

     WHEREAS, Soros Strategic Partners LP, a Delaware limited partnership, Guggenheim, CDP and the
Silver Rock Entities are parties to that certain Third Amended and Restated Operating Agreement,
dated as of February 18, 2011 (the “Original Agreement”);

     WHEREAS, Section 14.4 of the Original Agreement provides that the Original Agreement may be
amended upon the prior written consent of (i) Board; (ii) a Majority-in-Interest of the Common
Members; (iii) a Majority-in-Interest of the Preferred Members (as such term is defined in the
Original Agreement); (iv) so long as the Guggenheim Common Members (as such term is defined in the
Original Agreement) meet the Guggenheim Common Unit Threshold (as such term is defined in the
Original Agreement), the Guggenheim Common Members holding a majority of the Common Units held by
all Guggenheim Common Members; and (v) the CDP Common Members (as such term is defined in the
Original Agreement) holding a majority of the Common Units held by all CDP Common Members;

     WHEREAS, the Board has authorized and approved the amendment and restatement of the Original
Agreement on the terms and conditions set forth herein; and

     WHEREAS, the undersigned, being a Majority-in-Interest of the Common Members under the
Original Agreement, a Majority-in-Interest of the Preferred Members, the Guggenheim Common Members
holding a majority of the Common Units held by all Guggenheim Common Members and the CDP Common
Members holding a majority of the Common Units held by all CDP Common Members, desire to amend and
restate the Original Agreement to (i) add the Wellington Purchasers as parties hereto, and (ii)
govern the relationship of the Members with respect to the operation, governance and other matters
of Diamond Resorts Parent, LLC, a Nevada limited liability company (the “Company”).

     NOW THEREFORE, pursuant to the Act (as hereinafter defined), the following agreement,
including, without limitation, Appendix 1 (Tax Accounting Procedures) attached hereto and
by reference incorporated herein, shall constitute the Operating Agreement for the Company.

ARTICLE 1

DEFINITIONS

     1.1 General Definitions. The following terms used in this Operating Agreement shall
have the following meanings (unless otherwise expressly provided herein).

     “Act” means the Nevada Limited Liability Company Act, Nev. Rev. Stat. §§ 86.011 to 86.590, as
amended from time to time.

 

 

     “Adjusted Capital Account Deficit” has the meaning ascribed thereto in Appendix 1.

     “Affiliate” means a Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, a specified Person. For the purpose
of this definition, the term “control” shall mean the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

     “Agreement” shall mean this Fourth Amended and Restated Operating Agreement, including
Appendix 1 (Tax Accounting Procedures) hereto, as amended from time to time.

     “Asset Value” has the meaning ascribed thereto in Appendix 1.

     “Basis” has the meaning ascribed thereto in Appendix 1.

     “Board” has the meaning ascribed thereto in Section 9.1.

     “Business Day” shall mean a day other than a Saturday, a Sunday, or a state or federally
recognized holiday on which banks in Nevada are permitted to close.

     “Business Hours” shall mean 8:00 A.M. to 5:00 P.M. Standard Time or Daylight Time, as the case
may be, at a location specified in this Agreement. If no location is specified, a reference to
Business Hours shall refer to Business Hours as determined by Pacific Standard Time or Pacific
Daylight Time, as the case may be.

     “Capital Account” has the meaning ascribed thereto in Appendix 1.

     “Capital Contribution” means the amount of money and the fair market value (as reasonably
determined by the Board as of the date of contribution) of other property contributed, or services
rendered or to be rendered, to the Company by a Member with respect to such Membership Interest in
the Company.

     “CDP” has the meaning ascribed thereto in the introductory paragraph.

     “CDP Member” means CDP, 1818 Partners and any of their respective permitted transferees
admitted as Members in accordance with this Agreement.

     “CDP Unit Threshold” means the ownership by the CDP Members of at least 10% of the Common
Units issued to the CDP Members as of the date hereof.

     “Change in Control” means any transaction (i) pursuant to which the Company sells its business
by (a) a sale or conveyance of all or substantially all of the Company’s assets to any Person, (b)
a sale or conveyance of all or substantially all of the equity interests in the Company to any
Person or (c) a merger or consolidation of the Company with any Person and (ii) pursuant to which
the Company’s members, immediately prior to such transaction shall own in the aggregate,
immediately after giving effect thereto, less than a majority of the voting interests or less than
10% of the economic interests of the surviving entity (or its parent) or the purchasing entity (or
its parent), as the case may be.

     “Code” shall mean the Internal Revenue Code of 1986 or corresponding provisions of subsequent
superseding federal revenue laws.

2

 

     “Common Member” means a member holding Common Units.

     “Common Percentage Interest” means, as to a Member as of any determination date, the
respective percentage of Common Units held by such Member of all the Common Units issued and
outstanding as of such determination date. The Common Percentage Interest of each Common Member as
of the date hereof shall be as set forth opposite such Common Member’s name on Schedule A
hereto under the column entitled “Common Percentage Interest.”

     “Common Units” means the Units designated as Common Units, the holders of which shall have the
rights, preferences and obligations specified herein as pertaining to the holders of such Units.

     “Company” has the meaning ascribed thereto in the recitals.

     “Confidential Information” has the meaning ascribed thereto in Section 8.1.

     “Depreciation” has the meaning ascribed thereto in Appendix 1.

     “Dispute” has the meaning ascribed thereto in Section 10.18.

     “Dissolution Event” has the meaning ascribed thereto in Section 12.1.

     “DRC” means Diamond Resorts Corporation, a Maryland corporation.

     “EBITDA” has the meaning given to such term in the Senior Note Indenture.

     “Entity” shall mean any general partnership, government entity, limited partnership, limited
liability company, corporation, joint venture, trust, business trust, cooperative, association or
similar organization.

     “Exchange Act” means the Securities Exchange of 1934, as amended.

     “Fiscal Year” shall mean the taxable year of the Company for federal income tax purposes as
determined by Code Section 706 and the Regulations thereunder.

     “Guggenheim” has the meaning ascribed thereto in the introductory paragraph.

     “Guggenheim Units” means the Units held by the Guggenheim Members.

     “Guggenheim Entity” means any of (i) Guggenheim Capital, LLC and its Affiliates, (ii) any
Guggenheim Member and any of its equity holders who are Guggenheim Related Entities and (iii) any
Affiliates of any Guggenheim Member.

     “Guggenheim Member” means each, and “Guggenheim Members” means all, of Guggenheim and any of
its permitted transferees admitted as Members in accordance with this Agreement.

     “Guggenheim Purchase Agreement” means that certain Securities Purchase Agreement, dated as of
June 17, 2010, by and between the Company and Guggenheim.

     “Guggenheim Related Entity” means an entity with a management or investment management
relationship with Guggenheim Capital, LLC or its Affiliates.

     “Guggenheim Secondary Indemnitor” has the meaning given such term in Section 9.14(a).

3

 

     “Guggenheim Unit Threshold” means the aggregate ownership by the Guggenheim Members of at
least (i) 5% of the total Common Percentage Interests (determined on a fully-diluted basis) or
(ii) 25% of the Common Units issued to the Guggenheim Member as of the date hereof.

     “Investor” means any Guggenheim Member, any Silver Rock Member or any Wellington Member.

     “Investor Indemnified Party” has the meaning ascribed thereto in Section 9.15(a).

     “Investor Losses” has the meaning ascribed thereto in Section 9.15(a).

     “Liquidation Event” means any of the following: (a) a dissolution or involuntary winding up of
the Company; and (b) any transaction that results in a Change in Control of the Company.

     “Losses” has the meaning ascribed thereto in Appendix 1.

     “Majority-in-Interest of the Common Members” means Common Members whose aggregate Common
Percentage Interest exceeds 50% of the Common Percentage Interest of all Common Members.

     “Majority-in-Interest of the Investors” means Investors whose aggregate Common Percentage
Interest exceeds 50% of the Common Percentage Interest of all Investors.

     “Manager” means a “manager” (within the meaning of the Act) of the Company and includes each
Board member (it being understood, however, that no Board member shall have the power or authority
to bind the Company except as provided in this Agreement).

     “Managing Person” means a Manager, officer, director, or their agents.

     “Management Services Agreement” means the Homeowner Association Executive Oversight,
Consulting and Executive Management Services Agreement, dated as of December 31, 2010, by and among
DRC and Hospitality Management and Consulting Service, L.L.C.

     “Manager Representative” means a Board Member nominated by the Board to serve as the sole
Manager for purposes of public filing documents, such as Secretary of State Annual Lists, and for
any other purposes delegated by the Board.

     “Material Subsidiary” means any operating subsidiary of the Company that during the previous
fiscal year represented more than 20% of the Company’s revenues or EBITDA.

     “Member” means those Persons executing this Agreement and any Person who may hereafter become
an additional or Substitute Member.

     “Membership Interest” means a Member’s Units, and the associated right to vote (if any) on or
participate in management, the right (if any) to share in Profits, Losses, and distributions, and
any and all benefits to which the holder of such Units may be entitled pursuant to this Agreement,
together with all obligations to comply with the terms and provisions of this Agreement.

     “NRS” means the Nevada Revised Statutes, as the same may be modified and amended from time to
time.

     “Partially Adjusted Capital Account” means with respect to any Member for any Fiscal Year, the
Capital Account of such Member at the beginning of such Fiscal Year, increased by all contributions

4

 

during such year and all special allocations of income and gain pursuant to Section
6.3 of this Agreement and Section 1.2 of Appendix 1 with respect to such Fiscal
Year, and decreased by all distributions during such fiscal year and all special allocations of
losses and deductions pursuant to Section 6.3 of this Agreement and Section 1.2 of
Appendix 1, but before giving effect to any allocation of Profits or Losses for such Fiscal
Year pursuant to Section 6.1 and Section 6.2.

     “Permanent Disability,” with respect to an individual, means that individual is under a legal
disability or by reason of illness or mental or physical disability is unable to give prompt and
intelligent consideration to matters of the Company. The determination as to such individual’s
“Permanent Disability” at any time shall be made by such individual’s physician in writing, and
such determination shall be conclusive and binding upon the parties.

     “Person” shall mean any individual or Entity, and the heirs, executors, administrators, legal
representatives, successors, and assigns of such Person where the context so requires.

     “Polo Holdings” shall mean Diamond Resorts Holdings, LLC, a Nevada limited liability company.

     “Principal Line of Business” means all business activities related to Timeshare Opportunities,
including, but not limited to, financing, development, sales, marketing, management and maintenance
of interval or fractional timeshare properties and the real estate incident thereto, the
acquisition and re-sale of such properties and the booking and reservation activities related
thereto; provided that, for the avoidance of doubt, “Principal Line of Business” shall not include
business activities related to hotels, condominiums, condo-hotels, apartment rental complexes,
commercial retail centers, office complexes, casinos, or other types of real estate / hospitality
developments or other activities not involving Timeshare Opportunities. “Timeshare Opportunity”
means any real estate development project or arrangement which, at the time of entering into such
opportunity, is required to be licensed under or is regulated under any timeshare statute or
regulation in any jurisdiction (regardless of whether such jurisdiction is the jurisdiction in
which the opportunity is located, sold or marketed), including, without limitation, interval and
fractional timeshares, whether conveyed via license, right to use, fee simple title or points, and
any timeshare club or exchange arrangement.

     “Profits” has the meaning ascribed thereto in Appendix 1.

     “Property” means all real and personal property, tangible and intangible, owned by the
Company.

     “Proxy” has the meaning ascribed thereto in Section 10.23(a).

     “Public Offering” means an underwritten public offering and sale of Successor Stock pursuant
to an effective registration statement under the Securities Act; provided that a Public Offering
shall not include an offering made in connection with a business acquisition or combination
pursuant to a registration statement on Form S-4 or any similar form, or an employee benefit plan
pursuant to a registration statement on Form S-8 or any similar form.

     “Qualified Public Offering” means any Public Offering providing aggregate gross proceeds
(before deducting underwriting discounts and expenses) to the Company and/or its equityholders of
at least $150 million in such Public Offering and at an offering price which represents a common
equity valuation of Common Units or Successor Stock outstanding immediately prior to the issuance
of Successor Stock in connection with such offering of at least $750 million.

5

 

     “Registration Rights Agreement” means the Second Amended and Restated Registration Rights
Agreement, dated as of the date hereof, by and among the Company, Guggenheim, CDP, 1818 Partners,
the Silver Rock Entities and the Wellington Purchasers (as amended from time to time in accordance
with the terms thereof).

     “Regulations” means the federal income tax regulations, including temporary (but not proposed)
regulations promulgated under the Code.

     “Securities Act” means the Securities Act of 1933, as amended.

     “Securityholders Agreement” means the Fourth Amended and Restated Securityholders Agreement,
dated as of the date hereof, by and among the Company, Guggenheim, CDP, 1818 Partners, the Silver
Rock Entities and the Wellington Purchasers (as amended from time to time in accordance with the
terms thereof).

     “Senior Note Indenture” means the Indenture dated as of August 13, 2010 by and among DRC, the
Company, Polo Holdings, the Subsidiary Guarantors named therein and Wells Fargo Bank, National
Association, as trustee (as the same may be amended, restated, replaced or refinanced).

     “Silver Rock Entity” and “Silver Rock Entities” have the meanings ascribed thereto in the
introductory paragraph.

     “Silver Rock Member” means each, and “Silver Rock Members” means all, of the Silver Rock
Entities and any of its or their permitted transferees admitted as Members in accordance with this
Agreement.

     “Silver Rock Purchase Agreement” means that certain Securities Purchase Agreement, dated as of
February 18, 2011, by and between the Company and the Silver Rock Entities.

     “Silver Rock Secondary Indemnitor” has the meaning ascribed thereto in Section
9.14(b).

     “Silver Rock Units” means the Units held by the Silver Rock Members.

     “Subsidiary” means, with respect to any Person, any corporation, partnership, association or
other business entity of which (i) if a corporation, a majority of the total voting power of shares
of stock entitled (without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly,
by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or
(ii) if a partnership, association or other business entity, a majority of the partnership or other
similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes
hereof, a Person or Persons shall be deemed to have a majority ownership interest in a partnership,
association or other business entity if such Person or Persons shall be allocated a majority of
partnership, association or other business entity gains or losses or shall be or control the
managing director or a general partner of such partnership, association or other business entity.

     “Substitute Member” means a permitted transferee of a Membership Interest who has been
admitted to all of the rights of membership pursuant to Article 11.

     “Successor” has the meaning ascribed thereto in Section 13.1.

6

 

     “Successor Stock” has the meaning ascribed thereto in Section 13.2(b).

     “Target Capital Account” means, with respect to any Member and any fiscal year, an amount
(which may be either a positive or a deficit balance) equal to the hypothetical distribution (as
described in the next paragraph) that such Member would receive, minus the Member’s share of
partner minimum gain determined pursuant to Regulations Section 1.704-2(g), and minus the Member’s
share of the partner nonrecourse debt minimum gain determined in accordance with Regulations
Sections 1.704-2(i)(3) and 1.704-2(i)(5), all computed immediately prior to the hypothetical sale
described below.

     The hypothetical distribution to a Member is equal to the amount that would be received by
such Member if all Company assets were sold for cash equal to their Asset Value, all Company
liabilities were satisfied to the extent required by their terms (limited, with respect to each
partner nonrecourse liability and partner nonrecourse debt, as defined in Regulations Section
1.704-2(b)(4), to the Asset Value of the assets securing such liability), and the net assets of the
Company were distributed in full to the Members as required pursuant to Section 7.1, all as
of the last day of such Fiscal Year.

     “Tax Distribution” has the meaning ascribed thereto in Section 7.2.

     “Transaction Agreements” means this Agreement, the Registration Rights Agreement and the
Securityholders Agreement, the Guggenheim Purchase Agreement, the Silver Rock Purchase Agreement
and the Wellington Purchase Agreement.

     “Units” as to any Member shall mean and refer to the cumulative number of Common Units held by
such Member.

     “Wellington Entity” means any of (i) Wellington Management Company, LLP and its Affiliates,
(ii) any Wellington Member, (iii) any Wellington Related Entities and (iv) any Affiliates of any
Wellington Member.

     “Wellington Member” means each, and “Wellington Members” means all, of the Wellington
Purchasers and any of its or their permitted transferees admitted as Members in accordance with
this Agreement.

     “Wellington Purchase Agreement” means that certain Securities Purchase Agreement, dated as of
the date hereof, by and between the Company and the Wellington Purchasers.

     “Wellington Purchaser” and “Wellington Purchasers” have the meanings ascribed thereto in the
introductory paragraph.

     “Wellington Related Entity” means an entity with a management or investment management
relationship with Wellington Management Company, LLP or its Affiliates.

     “Wellington Secondary Indemnitor” has the meaning ascribed thereto in Section 9.14(c).

     “Wellington Unit Threshold” means the aggregate ownership by the Wellington Members of at
least (i) 5% of the total Common Percentage Interests (determined on a fully-diluted basis) or
(ii) 25% of the Common Units issued to the Wellington Members as of the date hereof.

     “Wellington Units” means the Units held by the Wellington Members.

7

 

ARTICLE 2

FORMATION OF COMPANY

     2.1 Name. The name of the Company is Diamond Resorts Parent, LLC.

     2.2 Formation. The Company was formed pursuant to Articles of Organization filed with
the Nevada Secretary of State on March 28, 2007.

     2.3 Principal Place of Business. The principal place of business of the Company
within the State of Nevada shall first be at 10600 West Charleston Boulevard, Las Vegas, NV 89135.
The Company may locate its places of business and registered office at any other place or places as
the Board may from time to time deem advisable.

     2.4 Registered Office and Agent. The Company’s registered office shall first be at
10600 West Charleston Boulevard, Las Vegas, NV 89135. The name of the registered agent at such
address as of the date hereof shall be Elizabeth Brennan.

     2.5 Term. Unless the Company is dissolved in accordance with the provisions of this
Agreement, the Act, or other Nevada law, the existence of the Company shall be perpetual.

ARTICLE 3

BUSINESS OF COMPANY

     3.1 Permitted Businesses. The purpose of the Company shall be to engage in any lawful
business and to do any lawful act concerning any and all lawful business for which a limited
liability company may be organized under the laws of the State of Nevada.

     3.2 Limits on Foreign Activity. The Company shall not directly engage in business in
any state, territory or country which does not recognize limited liability companies or the
effectiveness of the Act in limiting the liabilities of the Members of the Company. If the Company
desires to conduct business in any such state, it shall do so through an Entity which will ensure
limited liability to the Members.

     3.3 Limits on Trade or Business Activity. The Company shall not directly or
indirectly except through a subsidiary classified as a corporation for U.S. federal income tax
purposes engage in transactions that would cause the Company to be engaged in a U.S. trade or
business within the meaning of Section 864(b) of the Code or would result in the Company earning
income other than income described under Section 851(b)(2)(A) of the Code.

ARTICLE 4

CONTRIBUTIONS TO COMPANY

     4.1 Issuance of Units; Capital Contributions. The Company shall be permitted to issue
Common Units with such rights and obligations as set forth in this Agreement. The Common Units are
allocated in such amounts as set forth on Schedule A hereto, in exchange for the Capital
Contributions. The Capital Contribution of each Member as of the date hereof shall be as set forth
on the books and records of the Company.

     4.2 Additional Capital Contributions. Except as otherwise provided for under the Act,
unless all Members agree, no Member shall be obligated to make any additional Capital Contributions
to the Company. If the Company needs additional capital to meet its obligations, it shall seek
such capital in

8

 

such manner as the Board shall determine, including, without limitation, in any of the
following manners (without any particular order of priority):

     (a) From additional Capital Contributions from the Members in proportion to their
Common Percentage Interests (provided, however, that no Member shall be
required to make any additional Capital Contributions to the Company); or

     (b) From any source from which the Company may borrow additional capital, including,
without limitation, any Member (provided, however, no Member shall be
obligated to make a loan to the Company).

     4.3 Withdrawal or Reduction of Members’ Contributions to Capital.

     (a) Except as otherwise expressly provided herein, a Member shall not receive out of
the Company’s Property any part of such Member’s contributions to capital until all
liabilities of the Company, excluding liabilities to Members on account of their
contributions to capital, have been paid or there remains Property of the Company sufficient
to pay them. Except as otherwise expressly provided herein or the Act, no Member may demand
a return of his Capital Contribution.

     (b) Except as otherwise expressly provided herein, a Member shall not resign from the
Company before the dissolution and winding up of the Company pursuant to Article 11
hereof unless all Members consent; provided that a Member may deliver written notice to the
Company of such Member’s intention to abandon all right, title and interest in and to all
Units held by such Member without any compensation to such Member, and such abandonment
shall be effective as a resignation by such Member and such Member shall have no right to
demand a return of its contribution to capital or to receive the fair value of such Member’s
Units.

     (c) Except as otherwise expressly provided herein, a Member, irrespective of the nature
of such Member’s contribution, has the right to demand and receive only cash in return for
such Member’s contribution to capital.

     4.4 No Interest on Capital Contribution. Except as otherwise expressly provided
herein, no Member shall be entitled to or shall receive interest on such Member’s Capital
Contribution.

ARTICLE 5

MEMBERSHIP INTERESTS

     5.1 Current Interests. The number of Units held by each Member are as set forth
opposite such Member’s name on Schedule A attached hereto.

     5.2 Securities Law Qualification. THE MEMBERS ARE AWARE THAT THE MEMBERSHIP INTERESTS
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF ANY STATE. THE
MEMBERSHIP INTERESTS CANNOT BE RESOLD OR TRANSFERRED WITHOUT (i) REGISTRATION UNDER THE SECURITIES
ACT OR (ii) AN EXEMPTION FROM REGISTRATION. THERE IS NO PUBLIC TRADING MARKET FOR THE MEMBERSHIP
INTERESTS, AND IT IS NOT ANTICIPATED THAT ONE WILL DEVELOP. ADDITIONALLY, THERE ARE SUBSTANTIAL
RESTRICTIONS UPON THE TRANSFERABILITY OF THE MEMBERSHIP INTERESTS. SALE OR ASSIGNMENT BY A MEMBER
OF ITS MEMBERSHIP INTERESTS OR SUBSTITUTION OF MEMBERS MAY BE SUBJECT TO CERTAIN CONSENTS.

9

 

THEREFORE, MEMBERS MAY NOT BE ABLE TO LIQUIDATE THEIR INVESTMENTS IN THE EVENT OF AN
EMERGENCY. FURTHER, MEMBERSHIP INTERESTS MAY NOT BE READILY ACCEPTED AS COLLATERAL FOR A LOAN.
MEMBERSHIP INTERESTS SHOULD BE CONSIDERED ONLY AS A LONG-TERM INVESTMENT.

ARTICLE 6

ALLOCATIONS OF PROFITS AND LOSSES

     6.1 Allocation of Profits. From and after the date hereof, after giving effect to the
special allocations set forth in Section 1.2 of Appendix 1, Profits, and to the
extent included in the computation of Profits an allocable portion (pro rata based on the amount of
Profits) allocated to each Member of each item of Company income, gain, loss or deduction, for each
Fiscal Year, shall be allocated to the Members so as to reduce, proportionally, the difference
between their respective Target Capital Accounts and Partially Adjusted Capital Accounts for such
fiscal year. No portion of the Profits for any Fiscal Year shall be allocated to a Member whose
Partially Adjusted Capital Account is greater than or equal to his Target Capital Account for such
fiscal year.

     6.2 Allocation of Losses. From and after the date hereof, after giving effect to the
special allocations set forth in Section 1.2 of Appendix 1 and subject to
Section 6.3 hereof, Losses and to the extent included in the computation of Losses an
allocable portion (pro rata based on the amount of Losses) allocated to each Member of each item of
Company income, gain, loss or deduction, for each Fiscal Year, shall be allocated to the Members so
as to reduce, proportionally, the difference between their respective Partially Adjusted Capital
Accounts and Target Capital Accounts for such Fiscal Year. No portion of the Losses for any Fiscal
Year shall be allocated to a Member whose Target Capital Account is greater than or equal to its
Partially Adjusted Capital Account for such Fiscal Year.

     6.3 Loss Limitation and Reallocation. The Losses allocated pursuant to Section
6.2 hereof shall not exceed the maximum amount of Losses that can be so allocated without
causing any Member to have an Adjusted Capital Account Deficit at the end of the Fiscal Year. In
the event that some, but not all of the Members would have an Adjusted Capital Account Deficit as a
consequence of an allocation of Losses pursuant to Section 6.2 hereof, the limitation set
forth in this Section 6.3 shall be applied on a Member-by-Member basis and Losses not
allocable to any Member as a result of such limitation shall be allocated to the other Members in
accordance with the positive balances in such Members’ Capital Accounts so as to allocate the
maximum permissible Losses to each Member under Regulations Section 1.704-1(b)(2)(ii)(d).

ARTICLE 7

DISTRIBUTIONS

     7.1 Distributions. Except as otherwise provided in Section 12.2 (on
liquidation) hereof, and subject to the remainder of this Article 7 (including Section
7.2), the Company shall make distributions as determined by the Board, to each holder of Common
Units, pro rata in proportion to such Common Member’s Common Percentage Interest in effect as of
the date of such distribution.

     7.2 Tax Distribution. To the extent cash is available, the Members shall be entitled
to receive cash distributions for each taxable year in amounts sufficient to enable each Member to
discharge any federal, state and local tax liability for such taxable year or, if applicable, prior
years (excluding penalties and interest) arising as a result of their interest in the Company,
determined by assuming the applicability to each Member of the highest combined effective marginal
federal, state and local income tax rates for any Person actually obligated to report on any tax
returns income derived from the Company; the Company shall provide quarterly estimates to each
Member of such Member’s tax liability arising as a

10

 

result of its interest in the Company. To the extent distributions otherwise payable to a
Member pursuant to Section 7.1 are insufficient to cover such tax liabilities, the Company
shall make cash distributions (the “Tax Distributions”) in amounts that, when added to the cash
distributions otherwise payable, shall equal such tax liability. The amount of such tax liability
shall be calculated (i) taking into account the deductibility of state and local income taxes for
United States federal income tax purposes, and (ii) taking into account the amount of net
cumulative tax loss allocated to such Member in prior fiscal years (but after the date hereof) and
not used in prior fiscal years (but after the date hereof) to reduce taxable income for the purpose
of making distributions under this Section 7.2 (based on the assumption that taxable income
or tax loss from the Company is each Member’s only taxable income or tax loss). Tax Distributions
shall be treated as advances against distributions to the Members pursuant to Section 7.1.
To the extent this Section 7.2 results in distributions other than in the ratio required by
Section 7.1, the first distributions of net cash, securities or other property that are not
made pursuant to Section 7.2 shall be made so as to cause the aggregate distributions
pursuant to Section 7.1, including those made pursuant to Section 7.2, to be, as
nearly as possible, in the ratio required by Section 7.1.

ARTICLE 8

BOOKS, RECORDS, AND ACCOUNTING

     8.1 Books and Records.

     (a) The Company shall maintain or cause to be maintained books of account that reflect
items of income and expenditure relating to the business of the Company. Such books of
account shall be maintained on the method of accounting selected by the Company and on the
basis of the Fiscal Year. Each Member directly holding Units, upon reasonable advance
written notice to the Board, at such Member’s own expense, shall have the right to inspect,
copy, and audit the Company’s books and records at any time during normal Business Hours
provided that it has a bona fide good faith business reason for doing so. The Members
acknowledge that information directly or indirectly regarding the Company or any of its
direct or indirect subsidiaries constitutes business and commercial information not in the
public domain or generally known in the timeshare industry including, but not limited to
methods, techniques, systems, customer lists, business opportunities, business plans, tax
returns, operating and financial statements and knowledge of and experience in the timeshare
industry (collectively, “Confidential Information”). Except (x) with respect to its
attorneys, accountants, consultants, other professional advisors and its Affiliates, and,
(A) with respect to the Guggenheim Member, any Guggenheim Entity that has a need to know
such information and is directed by the disclosing Guggenheim Member to keep such
information confidential in accordance with the terms of this Section 8.1 (it being
understood that the disclosing Guggenheim Member shall remain responsible for the compliance
of any such receiving Guggenheim Entity with the obligations set forth in this Section
8.1(a) with respect to Confidential Information) and (B) with respect to any Wellington
Member, any Wellington Entity that has a need to know such information and is directed by
the disclosing Wellington Member to keep such information confidential in accordance with
the terms of this Section 8.1 (it being understood that the disclosing Wellington
Member shall remain responsible for the compliance of any such receiving Wellington Entity
with the obligations set forth in this Section 8.1(a) with respect to Confidential
Information), or (y) to the extent disclosure thereof is required by applicable law,
regulation or court order, each Member agrees that it shall not disclose any Confidential
Information to a third party. Each Member agrees that the Confidential Information will be
used solely in connection with its investment in the Company. Notwithstanding the
foregoing, “Confidential Information” does not include any information, materials, or data
that: (i) were rightfully known to a Member prior to its receipt from the Company, or
become rightfully known to such Member other than as a result of the relationship between
the Company and such Member; (ii) are or

11

 

become generally available to the public other than as a result of such Member’s
unauthorized direct or indirect acts; (iii) were disclosed to such Member by a third party
with the right to disclose such information, materials, or data, without restriction or
subject to restrictions to which such Member has conformed; or (iv) were independently
developed by a Member without use of any confidential or proprietary information of the
Company.

     (b) The Company shall keep at its registered office such records as are required by the
Act.

     8.2 Tax Returns. The Company shall prepare and file, or cause to be prepared and
filed, all income tax and other tax returns of the Company. The Company shall furnish to each
Member a copy of all such returns together with all schedules thereto and such other information
which each Member may request in connection with such Member’s own tax affairs. A Schedule K-1
shall be provided by the Company to each Member as soon as possible after the end of the Company’s
tax year, but in no event later than 90 days after the end of such tax year.

     8.3 Bank Accounts. The Company shall establish and maintain one or more separate
accounts in the name of the Company in one or more federally insured banking institutions of its
choosing into which shall be deposited all funds of the Company and from which all Company
expenditures and other disbursements shall be made. Funds may be withdrawn from such accounts on
the signature of a duly authorized representative or agent of the Board.

ARTICLE 9

MANAGEMENT

     9.1 General Management.

     (a) The business and affairs of the Company shall be managed under the direction of a
board of managers (the “Board”). The members of the Board shall be “managers” within the
meaning of the Act (it being understood, however, that no Board member shall have the power
or authority to bind the Company except as provided in this Agreement and the
Securityholders Agreement). Subject to Section 9.2, the Securityholders Agreement
and the Board’s right to appoint officers, Managing Persons and other agents of the Company
(including an operations manager designated under the Management Services Agreement), the
Board shall have full, exclusive and complete discretion to manage and control the business
and affairs of the Company, to make all decisions affecting the business and affairs of the
Company and to take all such actions as it deems necessary or appropriate to accomplish the
purposes of the Company as set forth herein.

     (b) The Board shall nominate from time to time a Manager Representative. Such Manager
Representative shall be listed as the sole Manager on public documents, such as the Articles
of Organization and Annual List of the Secretary of State of Nevada, and shall be authorized
to sign as the Manager of the Company in these ministerial instances. The Manager
Representative shall have no other power or authority, except as delegated to him or her by
the Board. The initial Manager Representative shall be Stephen J. Cloobeck.

     (c) Some or all of the day-to-day business and affairs of the Company may be managed by
or under the direction of one or more Entities, who need not be Members of the Company, as
determined by the Board pursuant to a management services agreement to be executed between
the Company and such other Entity in accordance with the provisions of the Securityholders
Agreement.

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     (d) The Board shall direct, manage and control the business of the Company and, subject
to the limitations and qualifications set forth in this Agreement (including Section
11) and the Securityholders Agreement, shall have full and complete authority, power and
discretion to make any and all decisions and to do any and all things which the Board shall
deem to be reasonably required in light of the Company’s business and objectives. Without
limiting the generality of the foregoing, the Board shall have power and authority (subject
to the restrictions set forth in the Securityholders Agreement) to:

     (i) acquire property from any Person as the Board may determine;

     (ii) establish policies for investment and invest Company funds (by way of
example but not limitation, in time deposits, short term governmental obligations,
commercial paper or other investments);

     (iii) make distributions of available cash to Members;

     (iv) employ accountants, legal counsel, managers, managing agents or other
experts or consultants to perform services for the Company with compensation from
Company funds;

     (v) enter into any transaction on behalf of the Company involving the
incurrence of any indebtedness or the hypothecation, encumbrance, or granting of a
security interest or lien upon any Company Property;

     (vi) purchase liability and other insurance to protect the Company’s Property
and business;

     (vii) organize Entities to serve as the Company’s subsidiaries and to determine
the form and structure thereof;

     (viii) establish committees; delegate management decisions thereto; appoint
members of the Board thereto and remove members of the Board therefrom;

     (ix) establish offices of President, Vice President, Secretary and Treasurer;
delegate to such offices daily management and operational responsibilities; appoint
Persons to act as members of such office and remove Persons therefrom; and

     (x) establish reasonable payments or salaries to Persons appointed as officers.

     9.2 Other Authorized Persons. Unless authorized to do so by this Agreement or by the
Board, no Member, agent, or employee of the Company shall have any power or authority to bind the
Company in any way, to pledge its credit or to render it liable pecuniarily for any purpose.
However, the Board may act (or may cause the Company to act) by a duly authorized power of
attorney.

     9.3 Appointment, Removal and Tenure of Board Members. The total number of members of
the Board shall be a minimum of three (3) and a maximum of seven (7). The number of members of the
Board as of the date hereof shall be five (5), of which (a) the Common Members shall have the right
to appoint three (3) members of the Board based on the vote of a Majority-in-Interest of the Common
Members, and (b) for so long as the Guggenheim Unit Threshold is met, the Guggenheim Members shall
have the right to appoint two (2) members of the Board. As of the date hereof, the members of the
Board

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are Stephen J. Cloobeck, David F. Palmer and Lowell D. Kraff (as the members appointed by the
Majority-in-Interest of the Common Members), and Zachary Warren and Scott Minerd (as the members
appointed by the Guggenheim Members). Stephen J. Cloobeck shall be the initial Chairman of the
Board. Subject to the foregoing and the Securityholders Agreement, the number of members of the
Board may be adjusted from time to time based on the vote of a Majority-in-Interest of the Common
Members with such additional Members of the Board being appointed by a vote of a
Majority-in-Interest of the Common Members. Each Board member shall serve from the date of his or
her appointment to the Board until his or her successor is appointed or until his or her earlier
death, resignation or removal. The Majority-in-Interest of the Common Members and the Guggenheim
Members shall have the right to remove the applicable Board member appointed by such Member(s) at
any time or from time to time, with or without cause or reason, and to appoint a Board member in
his place, and shall have the right to fill any vacancy created by the resignation or death of the
Board member appointed by it or them. If any member of the Board appointed by the Common Members
is absent from any Board meeting or there exists any vacancy with respect to any Board membership
that the Common Members are entitled to appoint pursuant to the terms hereof, the other members of
the Board appointed by the Common Members shall nonetheless have, in the aggregate, the number of
votes that could be cast by all members of the Board the Common Members are entitled to appoint
hereunder, without the need for a proxy from the absent Board member or filling of the vacancy. If
either member of the Board appointed by the Guggenheim Members is absent from any Board meeting or
there exists any vacancy with respect to either of such Board memberships, the vote cast by the
member of the Board appointed by the Guggenheim Members who is present at such meeting shall count
as two votes, without the need for a proxy from the absent Board member or filling of the vacancy.

     9.4 Board Observation Rights. For so long as the Wellington Unit Threshold is met,
the Wellington Members may designate one observer (the “Wellington Observer”) to attend in a
nonvoting observer capacity all meetings of the Board, any committee of the Board and any board of
directors or board of managers (and any committees thereof) of any Material Subsidiary, and, in
this respect, the Company shall provide the Wellington Observer copies of all notices, minutes,
consents, and other material that it provides to the members of the Board, any committee of the
Board and any board of directors or board of managers (and any committees thereof) of any Material
Subsidiary at the same time such material is provided to such members; provided, however, that the
Company reserves the right to exclude the Wellington Observer from access to any material or
meeting or portion thereof if the Company believes upon advice of counsel that such exclusion is
reasonably necessary to preserve the attorney-client privilege. To the extent the information and
other material furnished to the Wellington Observer pursuant to this Section 9.4
constitutes or contains Confidential Information, the Wellington Members covenant that they will
use due care to prevent its officers, directors, partners, employees, trustees, counsel,
accountants and other representatives from disclosing such Confidential Information to Persons
other than their respective authorized employees, counsel, accountants, stockholders,
beneficiaries, partners, limited partners and other authorized representatives and any other person
permitted under Section 8.1(a); provided, however, that the Wellington Members may disclose
or deliver any information should they be advised by counsel that such disclosure or delivery is
required by law, regulation or judicial or administrative order or should the Company consent in
writing to such disclosure or delivery. “Due care” means the same level of care that a Wellington
Member would use to protect the confidentiality of sensitive or proprietary information regarding
its other investments that are subject to similar confidentiality agreements. Any material to be
provided to the Wellington Observer shall be sent solely to the address and department listed next
to the signatures of the Wellington Purchasers, and such material shall not be sent to any other
Person on behalf of the Wellington Observer without the prior written consent of a member of such
department. If any of such material contains material, non-public information (under applicable
securities laws) about any other entity with publicly traded securities, the Company shall identify
such information as such.

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     9.5 Meetings of the Board; Action by Written Consent.

     (i) The Board may hold meetings at the Company’s principal place of business,
or at such other place either within or without the State of Nevada if consented to
by all of the Board members. Meetings of the Board may also be held by means of
conference telephone or similar communications equipment by means of which all
members participating in the meeting can hear each other, and participation in such
meeting shall constitute attendance and presence in person. Regular meetings of the
Board may be held without notice at such times and at such places as shall from time
to time be determined by the Board. Any Board member may call a meeting of the
Board on not less than three (3) Business Days’ notice to each other Board member,
either personally, by telephone, by mail, by facsimile or by any other means of
communication reasonably calculated to give notice. Notice of a meeting need not be
given to any Board member if a written waiver of notice, executed by such Board
member before or after the meeting, is filed with the records of the meeting, or to
any Board member who attends the meeting without protesting prior thereto or at its
commencement, the lack of notice. A notice and waiver of notice need not specify
the purposes of the meeting.

     (ii) Any action permitted or required by the Act, the articles of organization
of the Company or this Agreement to be taken at a meeting of the Board may be taken
without a meeting if a consent in writing, setting forth the action to be taken, is
signed by all of the members of the Board. Such consent shall have the same force
and effect as a vote at a meeting and may be stated as such in any document or
instrument filed with the Secretary of State of Nevada, and the execution of such
consent shall constitute attendance or presence in person at a meeting of the Board.

     9.6 Quorum and Acts of the Board. At all meetings of the Board a majority of the
total number of Board members shall constitute a quorum for the transaction of business and, except
as otherwise provided in this Agreement and the Securityholders Agreement, the vote of a majority
of the Board members present at any meeting in person or by proxy at which a quorum is present
shall be the act of the Board. If a quorum shall not be present at any meeting of the Board, the
Board members present thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present. Any instrument or writing executed
on behalf of the Company by any one or more of the members of the Board shall be valid and binding
upon the Company when authorized by such action of the Board.

     9.7 Committees. The Board may designate one or more committees, each committee to
consist of one or more of the members of the Board, or such other persons as may be designated by
the Board. Any such committee, to the extent provided by the Board, shall have and may exercise
all the powers and authority of the Board in the management of the business, property, and affairs
of the Company. Each committee which may be established by the Board pursuant hereto may fix its
own rules and procedures. For so long as the Guggenheim Unit Threshold is met, the Guggenheim
Members shall be entitled to appoint a person to each committee of the Board.

     9.8 Subsidiaries. For so long as the Guggenheim Unit Threshold is met, the Guggenheim
Members may elect one member to serve on the board of directors or board of managers, as the case
may be, of each Material Subsidiary and on each committee of the board of directors or board of
managers, as the case may be, of a Material Subsidiary.

     9.9 No Liability for Certain Acts. A member of the Board of the Company and each
other duly appointed officer of the Company shall perform such person’s duties, in good faith, in a
manner such

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person reasonably believes to be in the best interests of the Company; provided that nothing
contained herein shall prevent a member of the Board from acting in the interests of the Member or
Members having appointed such member to the Board. Such Board member or officer does not, in any
way, guarantee the return of the Members’ Capital Contributions or a profit for the Members from
the operations of the Company. No such person shall be responsible to any Members because of a
loss of their investment in the Company or a loss in the operations of the Company, unless the loss
shall have been the result of the Board member or officer not acting in good faith as provided in
this Section. A Board member or officer shall incur no liability to the Company or to any of the
Members as a result of engaging in any other business or venture; provided that the foregoing shall
not relieve any Member of its duties and responsibilities under Section 10.19 hereof. The
foregoing provision shall not preclude liability on the part of a Board member or officer to a
Member pursuant to any other agreement between such Member and a Board member or officer. Board
members shall be entitled to any other protection afforded to a manager under the Act. A Board
member or officer who so performs such person’s duties shall not have any liability by reason of
being or having been a Board member or officer of the Company. In performing the duties of a Board
member or officer, such person shall be entitled to rely on information, opinions, reports or
statements, including financial statements and other financial data, in each case prepared or
presented by persons and groups listed below unless such person has knowledge concerning the matter
in question that would cause such reliance to be unwarranted:

     (a) one or more employees or other agents of the Company whom the Board member or
officer believes in good faith to be reliable and competent in the matters presented;

     (b) legal counsel, public accountants, or other Persons as to matters that the Board
member or officer believes in good faith to be within such Persons’ professional or expert
competence; or

     (c) a committee, upon which such Board member or officer does not serve, duly
designated in accordance with the provisions of this Agreement, as to matters within its
designated authority, which committee the Board member or officer believes in good faith to
merit confidence.

     9.10 Transactions with Affiliates. Except as otherwise expressly provided in the
Securityholders Agreement, the Company and Company Affiliates may enter into agreements and other
transactions with any Member or Affiliates of any Member without the prior written consent of the
Members.

     9.11 Board Members And Officers Have No Exclusive Duty to Company. Board members or
officers shall not be required to manage the Company as such person’s sole and exclusive activity,
and each Board member or officer may have other business interests and may engage in other
activities in addition to those relating to the Company. Neither the Company nor any Member shall
have any right, by virtue of this Agreement, to share or participate in such other investments or
activities of any Board member or officer.

     9.12 Expenses. The Company shall (or shall cause one of its subsidiaries to)
reimburse the members of the Board and the Wellington Observer for all reasonable out of pocket
expenses incurred by such individual in connection with their attendance of any meeting of the
Board, the board of directors or board of managers of any Material Subsidiary or any committee
thereof.

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     9.13 Indemnity of Board Members and Officers.

     (a) The Company agrees to indemnify, pay, protect and hold harmless each Board member
and officer from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, proceedings, costs, expenses and disbursements of any
kind or nature whatsoever (including, without limitation, all reasonable costs and expenses
of defense, appeal and settlement of any and all suits, actions or proceedings instituted
against the such person or the Company and all costs of investigation in connection
therewith) which may be imposed on, incurred by, or asserted against such person or the
Company in any way relating to or arising out of, or alleged to relate to or arise out of,
(i) any action or inaction on the part of the Company or on the part of a Board member or
officer, acting in a manner believed in good faith to be in the best interests of the
Company, (ii) in connection with the formation, operation and/or management of the Company,
or the Company’s purchase and operation of Property, and/or (iii) as a result of the Board
member or officer agreeing to act as a Board member or officer of the Company or any
subsidiary. If any action, suit or proceeding shall be pending or threatened against the
Company or a Board member or officer relating to or arising out of, or alleged to relate to
or arise out of, any such action or nonaction, a Board member or officer shall have the
right to employ, at the expense of the Company, separate counsel of such person’s choice in
such action, suit or proceeding and the Company shall advance the reasonable out-of-pocket
expenses in connection therewith. The satisfaction of the obligations of the Company under
this Section shall be from and limited to the assets of the Company, and no Member shall
have any personal liability on account thereof. The foregoing rights of indemnification are
in addition to and shall not be a limitation of any rights of indemnification as provided in
Sections 86.411 through 86.451 of the Act, as such may be amended from time to time.

     (b) This Section shall not limit the Company’s power to pay or reimburse expenses
incurred by a Board member or officer in connection with such person’s appearance as a
witness in a proceeding at a time when the Board member or officer has not been made a named
defendant or respondent in the proceeding.

     (c) The Company may indemnify and advance expenses to an employee or agent of the
Company who is not a Board member or officer to the same or to a greater extent as the
Company may indemnify and advance expenses to a Board member or officer.

     (d) The Company shall use its best efforts to purchase and maintain insurance on behalf
of any Person who is or was a Board member or officer, Member, employee, fiduciary, or agent
of the Company or who, while a Board member or officer, Member, employee, fiduciary, or
agent of the Company, is or was serving at the request of the Company as a manager, member,
director, officer, partner, trustee, employee, fiduciary, or agent of any other foreign or
domestic limited liability company or any corporation, partnership, joint venture, trust,
other enterprise, or employee benefit plan against any liability asserted against or
incurred by such Person in any such capacity or arising out of such Person’s status as such,
whether or not the Company would have the power to indemnify such Person against such
liability under the provisions of this Section. Any such insurance may be procured from any
insurance company designated by the Board, whether such insurance company is formed under
the laws of this state or any other jurisdiction of the United States or elsewhere.

     9.14 Subrogation.

     (a) In the event that any member of the Board appointed by the Guggenheim Members is
entitled to indemnification under Section 9.13 for which such Person is also
entitled

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to indemnification from a Guggenheim Member or their Affiliates (the “Guggenheim
Secondary Indemnitor”), the Company hereby agrees that its duties to indemnify such Person,
whether pursuant to this Agreement or otherwise, shall be primary to those of the Guggenheim
Secondary Indemnitor, and to the extent the Guggenheim Secondary Indemnitor actually
indemnifies any such Person, such Guggenheim Secondary Indemnitor shall be subrogated to the
rights of such Person against the Company for indemnification hereunder. The Company hereby
acknowledges the subrogation rights of each Guggenheim Secondary Indemnitor under such
circumstances and agrees to execute and deliver such further documents and/or instruments as
the Guggenheim Secondary Indemnitor may reasonably request in order to evidence any such
subrogation rights, whether before or after the Guggenheim Secondary Indemnitor makes any
such indemnification payment. The Company shall pay any amounts due under this Section
9.14(a), in cash, promptly, and in any event within ten (10) days, upon written demand
from the Guggenheim Secondary Indemnitor. The Company hereby waives any right against the
Guggenheim Secondary Indemnitor to indemnification, subrogation or contribution.
Furthermore, the Company expressly agrees that each Guggenheim Secondary Indemnitor is an
intended third party beneficiary as to the indemnification provisions of this Agreement and
shall be entitled to bring suit against the Company to enforce said provisions.

     (b) In the event that any member of the Board appointed by the Silver Rock Common
Members is entitled to indemnification under Section 9.13 for which such Person is
also entitled to indemnification from a Silver Rock Member or their Affiliates (the “Silver
Rock Secondary Indemnitor”), the Company hereby agrees that its duties to indemnify such
Person, whether pursuant to this Agreement or otherwise, shall be primary to those of the
Silver Rock Secondary Indemnitor, and to the extent the Silver Rock Secondary Indemnitor
actually indemnifies any such Person, such Silver Rock Secondary Indemnitor shall be
subrogated to the rights of such Person against the Company for indemnification hereunder.
The Company hereby acknowledges the subrogation rights of each Silver Rock Secondary
Indemnitor under such circumstances and agrees to execute and deliver such further documents
and/or instruments as the Silver Rock Secondary Indemnitor may reasonably request in order
to evidence any such subrogation rights, whether before or after the Silver Rock Secondary
Indemnitor makes any such indemnification payment. The Company shall pay any amounts due
under this Section 9.14(b), in cash, promptly, and in any event within ten (10)
days, upon written demand from the Silver Rock Secondary Indemnitor. The Company hereby
waives any right against the Silver Rock Secondary Indemnitor to indemnification,
subrogation or contribution. Furthermore, the Company expressly agrees that each Silver
Rock Secondary Indemnitor is an intended third party beneficiary as to the indemnification
provisions of this Agreement and shall be entitled to bring suit against the Company to
enforce said provisions.

     (c) In the event that any member of the Board appointed by any of the Wellington
Members is entitled to indemnification under Section 9.13 for which such Person is
also entitled to indemnification from a Wellington Member or their Affiliates (the
“Wellington Secondary Indemnitor”), the Company hereby agrees that its duties to indemnify
such Person, whether pursuant to this Agreement or otherwise, shall be primary to those of
the Wellington Secondary Indemnitor, and to the extent the Wellington Secondary Indemnitor
actually indemnifies any such Person, such Wellington Secondary Indemnitor shall be
subrogated to the rights of such Person against the Company for indemnification hereunder.
The Company hereby acknowledges the subrogation rights of each Wellington Secondary
Indemnitor under such circumstances and agrees to execute and deliver such further documents
and/or instruments as the Wellington Secondary Indemnitor may reasonably request in order to
evidence any such subrogation rights, whether before or after the Wellington Secondary
Indemnitor makes any such indemnification payment. The Company shall pay any amounts due
under this Section 9.14(c), in cash, promptly,

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and in any event within ten (10) days, upon written demand from the Wellington
Secondary Indemnitor. The Company hereby waives any right against the Wellington Secondary
Indemnitor to indemnification, subrogation or contribution. Furthermore, the Company
expressly agrees that each Wellington Secondary Indemnitor is an intended third party
beneficiary as to the indemnification provisions of this Agreement and shall be entitled to
bring suit against the Company to enforce said provisions.

     9.15 Indemnity of Investors.

     (a) Without limitation of any other provision of this Agreement or any agreement
executed in connection herewith, the Company agrees to defend, indemnify and hold each
Investor, its respective Affiliates and direct and indirect partners (including partners of
partners and stockholders and members of partners), members, stockholders, directors,
officers, employees and agents and each person who controls any of them within the meaning
of Section 15 of the Securities Act, or Section 20 of the Exchange Act (collectively, the
“Investor Indemnified Parties” and, individually, an “Investor Indemnified Party”) harmless
from and against any and all damages, liabilities, losses, taxes, fines, penalties,
reasonable costs and expenses (including, without limitation, reasonable fees of a single
counsel representing the Investor Indemnified Parties), as the same are incurred, of any
kind or nature whatsoever (whether or not arising out of third party claims and including
all amounts paid in investigation, defense or settlement of the foregoing) which may be
sustained or suffered by any such Investor Indemnified Party (“Investor Losses”), based
upon, arising out of, or by reason of (i) any breach of any covenant or agreement made by
the Company in the Transaction Agreements, or (ii) any third party or governmental claims
relating in any way to such Investor Indemnified Party’s status as a member, controlling
person, manager, or member of the Board of the Company (including, without limitation, any
and all Losses under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, which relate directly or indirectly
to the registration, purchase, sale or ownership of any securities of the Company or to any
fiduciary obligation owed with respect thereto), including, without limitation, in
connection with any third party or governmental action or claim relating to (A) any action
taken or omitted to be taken or alleged to have been taken or omitted to have been taken by
any Investor Indemnified Party as security holder, director, agent, representative or
controlling person of the Company or otherwise, alleging so called control person liability
or securities law liability or (B) any transaction pursuant to which such Investor became a
Member; provided, however, that the Company will not be liable to the extent
that such Losses arise from and are based on conduct by an Investor Indemnified Party which
constitutes fraud or willful misconduct.

     (b) If the indemnification provided for in Section 9.15(a) above for any reason
is held by a court of competent jurisdiction to be unavailable to an Investor Indemnified
Party in respect of any Investor Losses referred to therein, then the Company, in lieu of
indemnifying such Investor Indemnified Party thereunder, shall contribute to the amount paid
or payable by such Investor Indemnified Party as a result of such Investor Losses (i) in
such proportion as is appropriate to reflect the relative fault of the Company and the
Investor Indemnified Party, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not only the
relative fault referred to in clause (i) above but also the relative benefits received by
the Company and the Investor Indemnified Party in connection with the action or inaction
which resulted in such Investor Losses, as well as any other relevant equitable
considerations. The relative fault of the Company and the Investor Indemnified Party shall
be determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company and the Investor Indemnified Party and the

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parties’ relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission.

     (c) Each of the Company and the Investors agrees that it would not be just and
equitable if contribution pursuant to Section 9.15(b) were determined by pro rata or
per capita allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.

ARTICLE 10

RIGHTS AND OBLIGATIONS OF MEMBERS

     10.1 Limitation of Liability. Each Member’s liability shall be limited as set forth
herein, in the Act and other applicable law. A Member will not personally be liable for any debts
or losses of the Company, except as provided in the Act. Without limiting the foregoing, no Member
shall be required to guaranty any obligation of the Company.

     10.2 Member Indemnity. The Company agrees to indemnify, pay, protect and hold
harmless any Member (on demand and to the satisfaction of the Member) from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, proceedings,
costs, expenses and disbursements of any kind or nature whatsoever in any way relating to any
agreement, liability, commitment, expense or obligation of the Company which may be imposed on,
incurred by, or asserted against the Member solely as a result of such Member being a Member or
becoming a Member (including, without limitation, all reasonable costs and expenses of defense,
appeal and settlement of any and all suits, actions or proceedings instituted against the Member
and all costs of investigation in connection therewith). The satisfaction of the obligations of
the Company under this Section shall be from and limited to the assets of the Company, and no
Member shall have any personal liability on account thereof. The foregoing rights of
indemnification are in addition to and shall not be a limitation of any rights that may be provided
in the Act.

     10.3 List of Members. Upon written request of any Member directly holding Units, the
Company shall provide a list showing the names, addresses and Units of the Members in the Company
subject to the provisions regarding Confidential Information.

     10.4 Voting. Members shall be entitled to vote only on matters reserved for their
approval or consent in the manner expressly specified herein.

     10.5 Additional Members. Except with respect to employees holding Units pursuant to
an employee option or incentive plan or as otherwise expressly provided herein (including, without
limitation, any transfers permitted under Section 11), no Person shall be admitted to the
Company as an additional Member without the consent of a Majority-in-Interest of the Common
Members.

     10.6 Meetings. Unless otherwise prescribed by the Act, meetings of the Members may be
called, for any purpose or purposes, by the Board (or a Managing Person duly authorized by the
Board) or by all of the Members.

     10.7 Place of Meetings. Meetings shall take place at the Company’s principal place of
business, or at such other place if consented to by all the Members.

     10.8 Notice of Meetings. Except as provided in this Agreement, written notice stating
the date, time, and place of the meeting, and the purpose or purposes for which the meeting is
called, shall be delivered not less than five (5) Business Days nor more than fifty (50) calendar
days before the date of the

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meeting, either personally or by mail, facsimile, or overnight or next-day delivery services
by or at the direction of the Board, or the Member or Members calling the meeting, to each Member
entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered three (3)
Business Days after deposit in the United States mail, postage prepaid, addressed to the Member at
his or her address as it appears on the books of the Company. If transmitted by way of facsimile,
such notice shall be deemed to be delivered on the date of such facsimile transmission to the fax
number, if any, for the respective Member which has been supplied by such Member to the Board and
identified as such Member’s facsimile number. If transmitted by overnight or next-day delivery,
such notice shall be deemed to be delivered on the next Business Day after deposit with the
delivery service addressed to the Member at his or her address as it appears on the books of the
Company. When a meeting is adjourned to another time or place, notice need not be given of the
adjourned meeting if the time and place thereof are announced at the meeting at which the
adjournment is taken, unless the adjournment is for more than thirty (30) calendar days. At the
adjourned meeting the Company may transact any business which might have been transacted at the
original meeting.

     10.9 Meeting of All Members. If all of the Members shall meet at any time and place,
including by conference telephone call, either within or outside of the State of Nevada, and
consent to the holding of a meeting at such time and place, such meeting shall be valid without
call or notice.

     10.10 Record Date. For the purpose of determining Members entitled to notice of or to
vote at any meeting of Members or any adjournment thereof, the date on which notice of the meeting
is mailed shall be the record date for such determination of Members. When a determination of
Members entitled to vote at any meeting of Members has been made as provided in this Section, such
determination shall apply to any adjournment thereof, unless notice of the adjourned meeting is
required to be given pursuant to Section 10.8 hereof.

     10.11 Quorum. Members holding a majority of the Units, represented in person or by
proxy, shall constitute a quorum at any meeting of Members. Business may be conducted once a
quorum is present.

     10.12 Voting Rights of Members. Except as otherwise provided herein, the holders of
the Common Units shall vote as a single class. Each Member shall be entitled to vote based on
Units held. If all or a portion of a Membership Interest which includes Units is transferred to an
assignee who does not become a Member, the Member from whom the Membership Interest is transferred
shall no longer be entitled to vote the Units transferred nor shall the Units transferred be
considered outstanding for any purpose pertaining to meetings or voting. No withdrawn Member shall
be entitled to vote nor shall such Member’s Units be considered outstanding for any purpose
pertaining to meetings or voting.

     10.13 Manner of Acting. Except as otherwise expressly provided in the Act, the
Company’s articles of organization, this Agreement or the Securityholders Agreement, the
affirmative vote of the Members holding a majority of the Units shall be the act of the Members.

     10.14 Proxies. At all meetings of Members, a Member holding Units may vote in person
or by proxy executed in writing by the Member or by a duly authorized attorney-in-fact. Except for
the proxy which may be granted pursuant to Section 10.23, no proxy shall be valid after 11
months from the date of its execution, unless otherwise provided in the proxy.

     10.15 Action by Members without a Meeting. Any action required or permitted to be
taken by vote or at a meeting of Members may be taken without a meeting if the action is evidenced
by one or more written consents describing the action taken, circulated to all the Members, signed
by that percentage or number of the Members holding Units required to take or approve the action.
Any such

21

 

written consents shall be delivered to the Secretary of the Company (or other Managing Person
duly authorized by the Board) of the Company for inclusion in the minutes or for filing with the
Company records. Action taken by written consent under this Section shall be effective on the date
the required percentage or number of the Members holding Units have signed and delivered the
consent to the Secretary of the Company (or other Managing Person duly authorized by the Board),
unless the consent specifies a different effective date. The record date for determining Members
entitled to take action without a meeting shall be the date the written consent is circulated to
the Members. Prompt notice of the taking of action by written consent shall be given to those
Members who have not consented in writing.

     10.16 Telephonic Communication. Members may participate in and hold a meeting by
means of conference telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in such meeting shall
constitute attendance and presence in person, except where the Member participates in the meeting
for the express purpose of objecting to the transaction of any business on the ground the meeting
is not lawfully called or convened.

     10.17 Waiver of Notice. When any notice is required to be given to any Member, a
waiver thereof in writing signed by the Person entitled to such notice, whether before, at, or
after the time stated therein, shall be equivalent to the giving of such notice.

     10.18 Mandatory Mediation. The parties hereto shall, and shall cause their respective
Affiliates to, resolve any dispute, controversy or claim arising out of or in connection with this
Agreement and any transactions contemplated hereby (a “Dispute”) in accordance with the following
procedures: within 30 Business Days after any party has served written notice on the other party,
such Dispute shall be submitted to the Las Vegas, Nevada office of JAMS for mediation. The
mediation shall take place in Nevada. Notwithstanding anything contained in this Agreement to the
contrary, in no event will any party be obligated to participate in any mediation for more than 30
Business Days.

     10.19 Competition by Members. The Members and Member’s Affiliates shall not, so long
as they are Members or Affiliates of Members, either directly or indirectly, personally or through
the use of agents, engage in or invest in any activity or business which is in competition with the
Principal Line of Business conducted by the Company or any of its subsidiaries anywhere in the
world; provided that the foregoing shall not prohibit a purely passive, minority investment in any
Entity. Should any Member violate this covenant, and fail to cure such violation after 45 days’
written notice, in addition to all other rights and remedies, such Member’s Units shall revert to
treasury without consideration and will be of no further force or effect. While the provisions
contained in this Agreement are considered by the parties to be reasonable in all circumstances, it
is recognized that provisions of this Section 10.19, including without limitation, remedies
and geographic scope, may fail for technical reasons and, accordingly, it is hereby agreed and
declared that if any one or more of such provisions shall, either by itself or themselves or taken
with others, be adjudged to be invalid as exceeding what is reasonable in all circumstances for the
protection of the interests of the Company or the Members, but would be valid if any particular
restriction or provisions were deleted or restricted or limited in a particular manner or if the
period or area thereof were reduced or curtailed, then the said provisions shall apply with such
deletion, restriction, limitation, reduction, curtailment, or modification as may be necessary to
make them valid and effective. Notwithstanding anything to the contrary contained herein, the
terms of this Section 10.19 shall not apply to any activity or business commenced by a
Member or any Affiliate of a Member prior to the date hereof and which is set forth on Schedule
10.19 attached hereto. Each Member represents and warrants to the Company and to each other
that as of the date hereof neither it, nor, in the case of CDP or 1818 Partners, their respective
Affiliates, either directly or indirectly, personally or through the use of agents, engages in or
invests in any activity or business which is in competition with the Principal Line of Business
anywhere in the world, except as set forth on Schedule 10.19 and except for (i) purely
passive, minority

22

 

investments in any Entity, and (ii) any investment by CDP, 1818 Partners or any of their
respective Affiliates in any Entity, or the engagement or performance of services by CDP, 1818
Partners or any of their respective Affiliates on behalf of any Entity, for which the Company or
DRC performs one or more management services pursuant to customary management services agreements.
Notwithstanding the foregoing, this Section 10.19 shall not apply to or restrict any
Guggenheim Entity, any Silver Rock Member (including its Affiliates) or any Wellington Entity.

     10.20 Solicitation by Members. No Member nor any Member’s Affiliates shall, so long
as such Person is a Member or an Affiliate of a Member and for a period of 12 months thereafter,
directly or indirectly through another Person or entity, (i) induce or attempt to induce any
employee of managerial level of the Company or any Subsidiary to leave the employ of the Company or
such Subsidiary, or in any way knowingly interfere with the relationship between the Company or any
Subsidiary and such employee, (ii) actively solicit for hire (except through a general solicitation
not targeted to employees of the Company or any Subsidiary) any employee of managerial level of the
Company or any Subsidiary or (iii) knowingly induce or attempt to induce any customer or potential
customer, supplier, licensee, licensor, franchisee or other business relation of the Company or any
Subsidiary to cease doing business with the Company or such Subsidiary, or in any way knowingly
interfere with the relationship between any such customer, supplier, licensee or business relation
and the Company or any Subsidiary; provided, that this Section 10.20 shall not apply to or
restrict any Guggenheim Entity, any Silver Rock Member (including its Affiliates) or any Wellington
Entity.

     10.21 Submission of Opportunities. Each Member agrees to submit (and to cause its
Affiliates to submit) to the Board all business, commercial and investment opportunities presented
to any Member or its Affiliates which relate to the Principal Line of Business and, unless approved
by the Board in writing, such Member shall not (and shall cause its Affiliates to not) pursue,
directly or indirectly, any such opportunities on such Member’s or its Affiliate’s own behalf.
Nothing in this Section 10.21 shall be deemed to create any affirmative duty to seek out
such opportunities nor to obligate any Person to violate any law, breach any contractual commitment
or commit any tort. Notwithstanding the foregoing, this Section 10.21 shall not apply to
or restrict any Guggenheim Entity, any Silver Rock Member (including its Affiliates) or any
Wellington Entity. The Company and each other Member acknowledges that the Guggenheim Entities and
the Wellington Entities are, or may be, in the business of providing financial services and
therefore review the business plans and related proprietary information of many enterprises,
including enterprises which may have products or services which compete directly or indirectly with
those of the Company and/or its Subsidiaries and nothing in this Agreement shall preclude or in any
way restrict any Guggenheim Entity or any Wellington Entity from investing or participating in any
particular enterprise whether or not such enterprise has products or services which compete with
those of the Company and/or its Subsidiaries.

     10.22 Intellectual Property, Inventions and Patents. For so long as CDP or 1818
Partners is a Member, each of CDP and 1818 Partners acknowledges that all discoveries, concepts,
ideas, inventions, innovations, improvements, developments, methods, designs, analyses, drawings,
reports, patent applications, copyrightable work and mask work (whether or not including any
Confidential Information) and all registrations or applications related thereto, all other
proprietary information and all similar or related information (whether or not patentable) which
relate to the Principal Line of Business which are conceived, developed or made by such Member or
its Affiliates (whether alone or jointly with others) (“Work Product”), belong to the Company;
provided, however, that it is acknowledged and agreed that such Member shall have the right to
publicize its participation in the creation of such Work Product. CDP or 1818 Partners, as
applicable, shall promptly disclose such Work Product to the Board and, at the Company’s expense,
perform all actions reasonably requested by the Board to establish and confirm such ownership
(including, without limitation, assignments, consents, powers of attorney and other instrument).

23

 

     10.23 Agreement to Vote Units; Proxy.

     (a) In the event of the death or Permanent Disability of Stephen J. Cloobeck, so long
as David F. Palmer is serving as an officer of the Company at such time, David F. Palmer
shall be solely authorized, to the fullest extent permitted by law, (i) to vote all Common
Units held by the CDP Members, (ii) to execute all written consents, call special meetings
and waive notice of all meetings on behalf of the CDP Members and (iii) to take such other
actions incident to any of the foregoing. Such authorization shall be irrevocable to the
fullest extent permitted by law, with respect to each and every meeting of Members of the
Company or action or approval by written resolution or consent of Members of the Company
covering the total number of Common Units in respect of which any CDP Member is entitled to
vote at any such meeting or in connection with any such written consent. Upon the execution
of this Agreement, each of CDP and 1818 Partners hereby (i) revokes any and all prior
proxies or other voting authorizations (other than as provided herein) given with respect to
the Common Units held by each of CDP and 1818 Partners, and (ii) agrees that it shall not
grant any subsequent proxies, or enter into any agreement or understanding with any Person
to vote or give or execute instructions regarding voting with respect to the Common Units
held by the CDP Members.

     (b) In no event will David F. Palmer be liable to any Member of the Company or to any
other Person for any action which David F. Palmer takes or refrains from taking in
connection with the authorization granted in Section 10.23(a), in each case so long
as David F. Palmer has acted in good faith without gross negligence or willful misconduct.
The foregoing shall not create or imply the existence of any duty, fiduciary or otherwise,
of David F. Palmer to any Member of the Company beyond that which may otherwise exist in the
absence of this Agreement.

     (c) Each CDP Member hereby acknowledges and agrees that the Company’s delivery to David
F. Palmer of any notices or other documents that the Company is delivering to its Members in
connection with a meeting, a vote, or a written consent (including, but not limited to,
notices of meetings and written consents), shall be deemed to satisfy any delivery
requirements that the Company may have to such CDP Member.

     (d) Promptly following any action by David F. Palmer pursuant to the authorization
granted in Section 10.23(a), David F. Palmer shall deliver notice thereof to each
CDP Member on whose behalf David F. Palmer has so acted.

     (e) If any court of competent jurisdiction shall at any time deem the proxy granted
herein to be invalid because it does not contain a specified duration, the duration shall be
deemed to be the lengthiest duration permissible by law under the circumstances. The court
shall reduce the temporal scope of this proxy permissible duration.

     10.24 Agreement not to Seek a Sale of the Company. In the event of the death or
Permanent Disability of Stephen J. Cloobeck, so long as the Company is in compliance with the
obligations set forth in the Management Services Agreement, each CDP Member hereby agrees that it
shall not, in its position as a Member of the Company, cause or attempt to cause a sale or
liquidation of the Company or any of its direct or indirect Subsidiaries.

24

 

ARTICLE 11

TRANSFERS AND REDEMPTIONS OF MEMBERSHIP INTERESTS

     11.1 Transfers among Members. Except as otherwise expressly provided herein and in
the Securityholders Agreement, the Members may freely transfer or assign all or any portion of
their Membership Interest to other Members.

     11.2 Transfers by Members. Except as otherwise expressly provided herein and in the
Securityholders Agreement, the Members shall be entitled to freely transfer or assign all or any
portion of their Units at any time and such transferee or assignee shall become a Substitute Member
as to the Membership Interest so transferred or assigned.

     11.3 Substitute Member. With respect to all or any portion of a Membership Interest
that is transferred or assigned as permitted in this Article 11, the Substitute Member has
the rights and powers and is subject to the restrictions and liabilities that are associated with
such Membership Interest which accrued prior to the date of substitution, except that the
substitution of the assignee does not release the assignor from existing liability to the Company.
In any event, no transfer or assignment of all or any portion of a Membership Interest in the
Company (including the transfer or assignment of any right to receive or share in profits, losses,
or distributions) shall be effective unless and until written notice (including the name and
address of the proposed transferee or assignee, the interest to be transferred or assigned, and the
date of such transfer or assignment) has been provided to the Company and the nontransferring or
nonassigning Member(s). Every Person before becoming a Substitute Member must assume this
Agreement, as amended from time to time, in writing.

     11.4 Definition of Transfer. For purposes of this Agreement the prohibition on
transfers, assignments and other conveyances shall be deemed to prohibit any such action, whether
directly or indirectly, such as (by way of example only) a transfer of stock in a corporate member.

ARTICLE 12

DISSOLUTION AND TERMINATION

     12.1 Dissolution.

     (a) The Company shall be dissolved upon the occurrence of any of the following events
(a “Dissolution Event”):

     (i) if the Company voluntarily enters bankruptcy chapter VII or another
insolvency proceeding that contemplates its final liquidation, or does so
involuntarily and such proceeding is not vacated or dismissed within 120 days after
commencement thereof; or

     (ii) by the unanimous vote or written consent of the Members.

The death, withdrawal, resignation or termination of any Member for any reason shall not constitute
a Dissolution Event.

     (b) As soon as possible following the occurrence of any Dissolution Event, the
appropriate duly authorized representative of the Company shall make all filings and do all
acts necessary to dissolve the Company.

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     12.2 Distribution of Assets Upon Dissolution. In settling accounts after dissolution,
the assets of the Company shall be distributed in the following order:

     (a) First, to pay those liabilities to creditors, in the order of priority as provided
by law; and

     (b) The balance, if any, to the Members in accordance with Section 7.1.

     12.3 Winding Up. Except as provided by law, upon dissolution, each Member shall look
solely to the assets of the Company for the return of its Capital Contribution. If the Property
remaining after the payment or discharge of the debts and liabilities of the Company is
insufficient to return the Capital Contribution of each Member, such Member shall have no recourse
against any other Member. The winding up of the affairs of the Company and the distribution of its
assets shall be conducted exclusively by the Board (or other Managing Person duly authorized by the
Board), who is hereby authorized to take all actions necessary to accomplish such distribution,
including without limitation, selling any Company assets the Board deems necessary or appropriate
to sell. In the discretion of the Board, a pro rata portion of the amounts that otherwise would be
distributed to the Members under this Article may be withheld to provide a reasonable reserve for
unknown or contingent liabilities of the Company.

     12.4 Notice of Dissolution. Within 90 days of the happening of a Dissolution Event,
the Board (or other Managing Person duly authorized by the Board) shall give written notice thereof
to each of the Members, to the banks and other financial institutions with which the Company
normally does business, and to all other parties with whom the Company regularly conducts business,
and shall publish notice of dissolution in a newspaper of general circulation in each place in
which the Company generally conducts business.

ARTICLE 13

CHANGE IN BUSINESS FORM

     13.1 With or without a vote or consent of the Majority-in-Interest of the Common Members, the
Board may upon any initial Public Offering, and the Board shall upon a Qualified Public Offering,
elect to cause the Company to reorganize as a corporation (the “Successor”) in accordance with this
Article 13 in anticipation of registration of the common stock of such Successor. The
method of effecting such reorganization, whether by merger with and into a corporate subsidiary of
the Company or otherwise, shall (subject to the remaining provisions of this Article 13) be
determined by the Board in its discretion; provided that (i) the Company shall to the extent
feasible under the circumstances effect any such reorganization in a manner which avoids creation
of a taxable income for the Company or any Member and (ii) the Company shall not effect any such
reorganization in a way that would adversely affect a Member in a manner disproportionate to any
adverse effect such reorganization would have on other Members (not including any disproportionate
adverse effect on the particular tax status or attributes of a Member), without the written consent
of such Member.

     13.2 Each of the Members hereby agrees to take such actions as are reasonably required to
effect such reorganization as shall be determined by the Board and irrevocably authorizes and
appoints each of the Managers who are in office at such time as such Member’s representative and
true and lawful attorney-in-fact and agent to act in such Member’s name, place and stead as
contemplated in this Article 13 and to execute in the name and on behalf of such Member any
agreement, certificate, instrument or document to be delivered by the Members in connection with
any such reorganization as determined by the Board (but with such power of attorney to be exercised
only in the event of the failure of such Member to comply with this Article 13). In
connection with any such reorganization, each of the

26

 

transactions described in clauses (a) through (d) below shall be consummated as provided below
and deemed to have occurred simultaneously:

     (a) The Successor shall be organized as a Delaware corporation, with customary charter
and by-laws, each reasonably acceptable to the Board;

     (b) Each Common Unit shall (effective upon and subject to the consummation of such
initial Public Offering) convert into shares of common stock of the Successor (the
“Successor Stock”), and the shares of Successor Stock shall be allocated among the holders
in exchange for their respective Common Units such that each holder shall receive a number
of shares of Successor Stock equal to the quotient of (i) the amount such holder would have
received in respect of such holder’s Common Units in a liquidation or dissolution at the
time of the initial Public Offering, divided by (ii) the price per share at which the common
stock is being offered to the public in the initial Public Offering, in each case net of
underwriting discounts and commissions;

     (c) The Successor shall expressly acknowledge and assume the obligations and
liabilities of the Company, including its remaining obligations under this Agreement and the
other Transaction Agreements and as otherwise described in clause (ii) above, with such
conforming changes as may be necessary or appropriate to reflect the corporate status of the
Successor, and in connection with such transactions and those described above the Members
shall take such action as may be necessary to consolidate the Company as part of the
Successor to the extent such consolidation does not occur by operation of law; and

     (d) The Successor (and the Company) shall use commercially reasonable efforts to make
all filings, obtain all approvals and consents and take such other actions as may be
necessary, desirable or appropriate to effectuate the reorganization contemplated by this
Section 13.2.

     13.3 Without limiting the generality of the foregoing or any other provision of this
Agreement, it is understood and agreed that the following structures for any such reorganization
and subsequent initial Public Offering shall be utilized by the Company and approved by the Board:

     (a) The organizational documents of the Successor and/or a stockholders’ or other
agreement, as appropriate, shall provide that the rights and obligations of the Members
hereunder and under the Transaction Agreements (to the extent such rights and obligations
survive consummation of an initial Public Offering) shall continue to apply in accordance
with the terms thereof unless the parties thereto otherwise agree in writing pursuant to the
terms thereof.

     (b) In the event of an initial Public Offering, the Company shall, and each Member
shall use commercially reasonable efforts to, take all necessary or desirable actions
requested by the Board in connection with the consummation of such initial Public Offering,
including consenting to, voting for and waiving any dissenters rights, appraisal rights or
similar rights with respect to a reorganization of the Company pursuant to the terms of this
Article 13 and compliance with the requirements of all laws and regulatory bodies
which are applicable or which have jurisdiction over such initial Public Offering. The
Company shall pay all filing fees necessary to obtain all authorizations and approvals
required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976 as amended and the
rules and regulations promulgated thereunder that are required for the consummation of the
reorganization contemplated in this Article 13.

27

 

     13.4 Nothing in this Agreement shall be construed to require a Member to disclose to any third
party or governmental entity the identities of partners, shareholders or members of such Member or
any of its Affiliates or investment advisers, or other confidential proprietary information of a
Member or any of its Affiliates or investment advisers.

ARTICLE 14

MISCELLANEOUS PROVISIONS

     14.1 Notices. Except as otherwise expressly provided herein, any notice or
communication required or permitted to be given by any provision of this Agreement, including, but
not limited to, any consents and, with respect to the Wellington Members, any material to be
provided to the Wellington Observer, shall be in writing and shall be deemed to have been given and
received by the Person to whom directed (a) when delivered personally to such Person or to an
officer or partner of the Member to which directed, (b) when transmitted by facsimile or e-mail
transmission, with evidence of a confirmed transmission, to the facsimile number or e-mail address
of such Person who has notified the Company and every other Member of its facsimile number and
e-mail address and received during Business Hours on a Business Day at the destination of such
facsimile or e-mail transmission, (c) three Business Days after being posted in the United States
mails if sent by registered, express or certified mail, return receipt requested, postage and
charges prepaid, or (d) one Business Day after deposited with overnight courier, return receipt
requested, delivery charges prepaid, in either case addressed to the Person to which directed at
the address, if any, shown on the page containing their signatures, or such other address of which
such Person has notified the Company and every other Member. If no address appears on the page
containing a Member’s signature and if the Company and the Members have not been notified of any
other address at which such Person shall receive notifications, then a notice delivered to the
Board (or other person duly authorized by the Board), who shall reasonably attempt to forward the
notice to such Person, shall constitute sufficient notice to such Person. Notwithstanding anything
herein to the contrary, any notice, communication, consent or other material to be provided to the
Wellington Members or the Wellington Observer shall be sent solely to the address and department
listed next to the signatures of the Wellington Purchasers, and such notices, communications,
consents, and materials shall not be sent to any other Person on behalf of the Wellington Members
or the Wellington Observer without the prior written consent of a member of such department.

     14.2 Application of Nevada Law; Waiver of Right to Trial by Jury; Jurisdiction and
Venue.

     (a) This Agreement, and the application and interpretation hereof, shall be governed
exclusively by its terms and by the laws of the State of Nevada, and specifically the Act.

     (b) EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR CLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF SUCH
PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.

     (c) The parties hereto hereby irrevocably submit to the jurisdiction of the State of
Nevada or federal court in or for Clark County, Nevada, in any action or proceeding arising
out of or relating to this Agreement and the parties hereto hereby irrevocably agree that
all claims in respect of such action or proceeding may be heard and determined in such State
of Nevada court or such federal court. The parties hereto hereby irrevocably waive, to the
fullest extent they may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding.

28

 

     14.3 Waiver of Action for Partition. Each Member irrevocably waives during the term
of the Company any right that such Member may have to maintain any action for partition with
respect to the Property of the Company.

     14.4 Amendments. Subject to Section 8 of the Securityholders Agreement, except with
respect to amendments to Schedule A that are required from time to time to correctly
reflect the then-current ownership of the Company, which shall not require the consent of any other
party, amendments, modifications or waivers to this Agreement shall require the approval of the (i)
Board; (ii) a Majority-in-Interest of the Common Members; (iii) a Majority-in-Interest of the
Investors; and (iv) for so long as the CDP Unit Threshold is met, the CDP Members holding a
majority of the Common Units held by all CDP Members; provided, however, that if
any such amendment, modification or waiver would materially alter the right or interest of any
Member in the Profits, Losses or distributions of the Company or materially alter the rights or
interests of any Member under any material provision of this Agreement other than as the result of
the issuance of Common Units, then such amendment, modification or waiver shall also require the
consent of all Members who would be similarly adversely affected by such amendment;
provided, further, that if any such amendment, modification or waiver of any
provision of this Agreement would materially and adversely affect the rights, interests or
obligations of any Investor hereunder in a manner differently than any other Member holding the
same class or series of Units, such amendment, modification or waiver shall not be effective
against such Investor without such Investor’s written consent with respect thereto.

     14.5 Construction. Whenever the singular number is used in this Agreement and when
required by the context, the same shall include the plural, and the masculine gender shall include
the feminine and neuter genders and vice versa.

     14.6 Headings. The headings in this Agreement are inserted for convenience only and
are in no way intended to describe, interpret, define, or limit the scope, extent or intent of this
Agreement or any provision hereof.

     14.7 Waivers. The failure of any party to seek redress for violation of or to insist
upon the strict performance of any covenant or condition of this Agreement shall not prevent a
subsequent act, which would have originally constituted a violation, from having the effect of an
original violation, except in the event of a written waiver to the contrary that specifically
states that this Section 14.7 shall be inapplicable.

     14.8 Rights and Remedies Cumulative. The rights and remedies provided by this
Agreement are cumulative and the use of any one right or remedy by any party shall not preclude or
waive the right to use any or all other remedies subject to the provisions of Section
10.18. Said rights and remedies are given in addition to any other rights the parties may have
by law, statute, ordinance or otherwise, subject to the provisions of Section 10.18.

     14.9 Severability. If any provision of this Agreement or the application thereof to
any Person or circumstance shall be invalid, illegal or unenforceable to any extent, the remainder
of this Agreement and the applications thereof shall not be affected and shall be enforceable to
the fullest extent permitted by law.

     14.10 Heirs, Successors and Assigns. Each and all of the covenants, terms, provisions
and agreements herein contained shall be binding upon and inure to the benefit of the parties
hereto and, to the extent permitted by this Agreement, their respective heirs, legal
representatives, successors and assigns.

29

 

     14.11 Creditors; Third Party Beneficiaries. None of the provisions of this Agreement
shall be for the benefit of or enforceable by (i) any creditors of the Company or (ii) any Person
not a party to this Agreement or (iii) any Person not expressly granted the rights of a third-party
beneficiary hereunder. The provisions of this Agreement are not intended to be for the benefit of
and shall not confer any rights on any creditor or other Person (other than a Member in such
Member’s capacity as a Member) to whom any debts, liabilities or obligations are owed by the
Company or any of the Members.

     14.12 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original but all of which shall constitute one and the same instrument.

     14.13 Further Assurances. The Members and the Company agree that they and each of
them will take whatever action or actions as are deemed by counsel to the Company to be reasonably
necessary or desirable from time to time to effectuate the provisions or intent of this Agreement,
and to that end, the Members and the Company agree that they will execute, acknowledge, seal, and
deliver any further instruments or documents which may be necessary to give force and effect to
this Agreement or any of the provisions hereof, or to carry out the intent of this Agreement or any
of the provisions hereof.

     14.14 Entire Agreement. This Agreement, including the Schedules, Exhibits and
Appendix attached hereto, sets forth all (and is intended by all parties hereto to be an
integration of all) of the promises, agreements, conditions, understandings, warranties, and
representations among the parties hereto with respect to the Company, and there are no promises,
agreements, conditions, understandings, warranties, or representations, oral or written, express or
implied, among them other than as set forth herein.

     14.15 Time of Essence. Time is of the essence of this Agreement and all of the terms,
provisions, covenants and conditions hereof.

     14.16 Opt-in to Article 8 of the Uniform Commercial Code. The Company hereby
irrevocably elects that all membership interests in the Company shall be securities governed by
Article 8 of the Uniform Commercial Code. Any certificate evidencing membership interests in the
Company shall bear the following legend: “This certificate evidences an interest in Diamond
Resorts Parent, LLC and shall be a security for purposes of Article 8 of the Uniform Commercial
Code.” No change to this provision shall be effective until all outstanding certificates have been
surrendered for cancellation and any new certificates thereafter issued shall not bear the
foregoing legend.

* * * * *

 

 

     IN WITNESS WHEREOF, the Members have executed this Fourth Amended and Restated Operating
Agreement to be effective as of the date first written above.

DRP HOLDCO, LLC

	 	 	 	 	 

	By:

	 	/s/ Zachary D. Warren
 

Zachary D. Warren
	 	 
	Its:

	 	Authorized Person	 	 

Notice Address:

DRP Holdco, LLC

135 East 57th Street

6th Floor

New York, NY 10022

Attention: Kaitlin Trinh

Facsimile: (212) 644-8396

with copies, which shall not constitute notice, to:

Guggenheim Partners

100 Wilshire Boulevard — Suite 500

Santa Monica, California 90401

Attention: Zachary D. Warren

Facsimile: (310) 576-1271

and

Guggenheim Investment Management, LLC

135 East 57th Street

New York, New York 10022

Attention: William Hagner

Facsimile: (212) 644-8396

and

Sidley Austin LLP

One South Dearborn

Chicago, IL 60603

Attention: Richard W. Astle

Facsimile: (312) 853-7036

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Diamond Resorts Parent, LLC

 

 

CLOOBECK DIAMOND PARENT, LLC

	 	 	 	 	 

	By:

	 	/s/ Stephen J. Cloobeck
 

Stephen J. Cloobeck
	 	 
	Its:

	 	Sole Manager	 	 

Notice Address:

Cloobeck Diamond Parent, LLC

10600 West Charleston Boulevard

Las Vegas, NV 89135

Attention: Stephen J. Cloobeck and David F. Palmer

Facsimile: (702) 798-8840

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

Katten Muchin Rosenman LLP

525 West Monroe Street

Suite 1900

Chicago, IL 60661

Attention: Howard S. Lanznar

Facsimile: (312) 902-1061

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Diamond Resorts Parent, LLC

 

 

	 	 	 	 	 	 	 

	SILVER ROCK FINANCIAL LLC	 	 	 	Notice Address:
	 
	 	 	 	 	 	 
	By: 

Its:

	 	/s/ Jeff Green
 

Jeff Green 

Authorized Signatory
	 	 	 	1250 Fourth Street

Santa Monica, CA 90401

Facsimile: (310) 570-4599
	 
	 	 	 	 	 	 
	IN — FP1 LLC	 	 	 	Notice Address:
	 
	 	 	 	 	 	 
	By: 

Its:

	 	/s/ Jeff Green
 

Jeff Green 

Authorized Signatory
	 	 	 	1250 Fourth Street

Santa Monica, CA 90401

Facsimile: (310) 570-4599
	 
	 	 	 	 	 	 
	BDIF LLC	 	 	 	Notice Address:
	 
	 	 	 	 	 	 
	By: 

Its:

	 	/s/ Jeff Green
 

Jeff Green 

Authorized Signatory
	 	 	 	1250 Fourth Street

Santa Monica, CA 90401

Facsimile: (310) 570-4599
	 
	 	 	 	 	 	 
	CM — NP LLC	 	 	 	Notice Address:
	 
	 	 	 	 	 	 
	By: 

Its:

	 	/s/ Jeff Green
 

Jeff Green 

Authorized Signatory
	 	 	 	1250 Fourth Street

Santa Monica, CA 90401

Facsimile: (310) 570-4599

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Diamond Resorts Parent, LLC

 

 

THE HARTFORD GROWTH OPPORTUNITIES FUND

	 	 	 	 	 

	By:

	 	Wellington Management Company, LLP	 	 
	As investment adviser	 	 
	 
	 	 	 	 
	By:

	 	/s/ Steven M. Hoffman
 

Name: Steven M. Hoffman
	 	 
	 

	 	Title: Vice President & Counsel	 	 
	 
	 	 	 	 
	HARTFORD GROWTH OPPORTUNITIES HLS FUND	 	 
	 
	 	 	 	 
	By:

	 	Wellington Management Company, LLP	 	 
	As investment adviser	 	 
	 
	 	 	 	 
	By:

	 	/s/ Steven M. Hoffman	 	 
	 

	 	 	 	 
	 

	 	Name: Steven M. Hoffman	 	 
	 

	 	Title: Vice President & Counsel	 	 
	 
	 	 	 	 
	QUISSETT INVESTORS (BERMUDA) L.P.	 	 
	 
	 	 	 	 
	By:

	 	Wellington Management Company, LLP	 	 
	As investment adviser	 	 
	 
	 	 	 	 
	By:

	 	/s/ Steven M. Hoffman	 	 
	 

	 	 	 	 
	 

	 	Name: Steven M. Hoffman	 	 
	 

	 	Title: Vice President & Counsel	 	 
	 
	 	 	 	 
	QUISSETT PARTNERS, L.P.	 	 
	 
	 	 	 	 
	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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Diamond Resorts Parent, LLC

 

 

THE HARTFORD CAPITAL APPRECIATION FUND

	 	 	 	 	 

	By:

	 	Wellington Management Company, LLP	 	 
	As investment adviser	 	 
	 
	 	 	 	 
	By:

	 	/s/ Steven M. Hoffman
 

Name: Steven M. Hoffman
	 	 
	 

	 	Title: Vice President & Counsel	 	 
	 
	 	 	 	 
	BAY POND PARTNERS, L.P.	 	 
	 
	 	 	 	 
	By:

	 	Wellington Management Company, LLP	 	 
	As investment adviser	 	 
	 
	 	 	 	 
	By:

	 	/s/ Steven M. Hoffman	 	 
	 

	 	 	 	 
	 

	 	Name: Steven M. Hoffman	 	 
	 

	 	Title: Vice President & Counsel	 	 
	 
	 	 	 	 
	BAY POND INVESTORS (BERMUDA) L.P.	 	 
	 
	 	 	 	 
	By:

	 	Wellington Management Company, LLP	 	 
	As investment adviser	 	 
	 
	 	 	 	 
	By:

	 	/s/ Steven M. Hoffman	 	 
	 

	 	 	 	 
	 

	 	Name: Steven M. Hoffman	 	 
	 

	 	Title: Vice President & Counsel	 	 
	 
	 	 	 	 
	Notice Address for each Wellington Purchaser:	 	 
	 
	 	 	 	 
	c/o Wellington Management Company, LLP	 	 
	280 Congress Street	 	 
	Boston, MA 02210	 	 
	Attention: Legal and Compliance Department	 	 
	Facsimile: (617) 289-5699	 	 
	 
	 	 	 	 
	with a copy, which shall not constitute notice, to:	 	 
	 
	 	 	 	 
	Greenberg Traurig	 	 
	One International Place	 	 
	Boston, MA 02210	 	 
	Attention: Bradley A. Jacobson	 	 
	Facsimile: (617) 279-8402	 	 

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Diamond Resorts Parent, LLC

 

 

1818 PARTNERS, LLC

	 	 	 	 	 

	By:

	 	Chautauqua Management, LLC	 	 
	Its:

	 	Member	 	 
	 
	 	 	 	 
	By:

	 	/s/ David F. Palmer
 

Name: David F. Palmer
	 	 
	 

	 	Title: Sole Manager	 	 
	 
	 	 	 	 
	Notice Address:	 	 
	 
	 	 	 	 
	1818 Partners, LLC	 	 
	10600 West Charleston Boulevard	 	 
	Las Vegas, NV 89135	 	 
	Attention: Stephen J. Cloobeck and David F. Palmer	 	 
	Facsimile: (702) 798-8840	 	 
	 
	 	 	 	 
	With a copy, which shall not constitute notice, to:	 	 
	 
	 	 	 	 
	Katten Muchin Rosenman LLP	 	 
	525 West Monroe Street	 	 
	Suite 1900	 	 
	Chicago, IL 60661	 	 
	Attention:
Howard S. Lanznar

	 	 
	Facsimile: (312) 902-1061

	 	 

Signature page to Operating Agreement

Diamond Resorts Parent, LLC

 

 

SCHEDULE A

Members, Units and Percentage Interests as of July 21, 2011

	 	 	 	 	 	 	 	 	 
	 	 	Common	 	 	Common Percentage	 
	Name of Member	 	Units	 	 	Interest	 
	Cloobeck Diamond Parent, LLC
	 	 	753.270	 	 	 	54.277	%
	 
	 	 	 	 	 	 	 	 
	1818 Partners, LLC
	 	 	32.711	 	 	 	2.357	%
	 
	 	 	 	 	 	 	 	 
	DRP Holdco, LLC
	 	 	293.050	 	 	 	21.116	%
	 
	 	 	 	 	 	 	 	 
	Silver Rock Financial LLC
	 	 	8.369	 	 	 	0.603	%
	 
	 	 	 	 	 	 	 	 
	IN — FP1 LLC
	 	 	6.978	 	 	 	0.503	%
	 
	 	 	 	 	 	 	 	 
	BDIF LLC
	 	 	6.978	 	 	 	0.503	%
	 
	 	 	 	 	 	 	 	 
	CM — NP LLC
	 	 	5.580	 	 	 	0.402	%
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Subtotal Silver Rock Entities
	 	 	27.905	 	 	 	2.011	%
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	The Hartford Growth Opportunities Fund
	 	 	35.683	 	 	 	2.571	%
	 
	 	 	 	 	 	 	 	 
	Hartford Growth Opportunities HLS Fund
	 	 	20.805	 	 	 	1.499	%
	 
	 	 	 	 	 	 	 	 
	Quissett Investors (Bermuda) L.P.
	 	 	14.240	 	 	 	1.026	%
	 
	 	 	 	 	 	 	 	 
	Quissett Partners, L.P.
	 	 	10.845	 	 	 	0.781	%
	 
	 	 	 	 	 	 	 	 
	The Hartford Capital Appreciation Fund
	 	 	184.937	 	 	 	13.326	%
	 
	 	 	 	 	 	 	 	 
	Bay Pond Partners, L.P.
	 	 	9.466	 	 	 	0.682	%
	 
	 	 	 	 	 	 	 	 
	Bay Pond Investors (Bermuda) L.P.
	 	 	4.918	 	 	 	0.354	%
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Subtotal Wellington Entities
	 	 	280.894	 	 	 	20.240	%
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total
	 	 	1,387.830	 	 	 	100.000	%
	 
	 	 	 	 	 	 

 

 

APPENDIX 1

TAX ACCOUNTING PROCEDURES

     1.0. References to Sections of the Code or Regulations. References within this
Appendix to sections of the Code or Regulations shall be applied by substituting for the
Regulations’ terms of “partnership” and “partner” the terms “limited liability company” (or
“company”) and “member,” respectively.

     1.1. Tax Definitions. The following terms used in this Agreement and Appendix shall
have the following meanings:

     a. “Adjusted Capital Account Deficit” with respect to any Member means the deficit
balance, if any, in such Member’s Capital Account as of the end of any Fiscal Year after
giving effect to the following adjustments: (i) credit to such Capital Account the sum of
(A) an amount equal to such Member’s share of Company Minimum Gain (as defined in
Section 1.2(a) hereof) and determined under Regulations Section 1.704-2(g), and such
Member’s share of Member Nonrecourse Debt Minimum Gain (as defined in Section 1.2(b)
hereof) and as determined under Regulations Section 1.704-2(i)(5), plus (B) any amounts
which such Member is deemed to be obligated to restore pursuant to Regulations Section
1.704-1(b)(2)(ii)(c); and (ii) debit to such Capital Account the items described in
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

     b. “Asset Value” with respect to any Company asset means:

     i. The fair market value when contributed of any asset contributed to the
Company by any Member;

     ii. The fair market value of any Company asset when such asset is distributed
to any Member;

     iii. The fair market value of all Property at the time of the happening of any
of the following events: (A) the admission of a Member to, or the increase of a
Membership Interest of an existing Member in, the Company in exchange for a Capital
Contribution; (B) the distribution of any asset distributed by the Company to any
Member as consideration for a Membership Interest in the Company; or (C) the
liquidation of the Company under Regulations Section 1.704-1(b)(2)(ii)(g); or

     iv. The Basis of the asset in all other circumstances.

For purposes of this definition, fair market value of any asset contributed to the Company after
the date hereof shall be determined by the Board with the approval of a Majority-in-Interest of the
Investors. The Asset Value of any Company asset shall be adjusted from time to time to account for
any Depreciation of such asset.

     c. “Basis” with respect to an asset means the adjusted basis from time to time of such
asset for federal income tax purposes.

     d. “Capital Account” means an account maintained for each Member in accordance with
Regulations Sections 1.704-1(b) and 1.704-2 and to which the following provisions apply to
the extent not inconsistent with such Regulations:

 

 

     i. There shall be credited to each Member’s Capital Account: (1) such Member’s
Capital Contributions (as defined in Article 1 of this Agreement); (2) such Member’s
distributive share of Profits; (3) any items of income or gain specially allocated
to such Member under this Agreement; and (4) the amount of any Company liabilities
(determined as provided in Code Section 752 (c) and the Regulations thereunder)
assumed by such Member or to which Property distributed to such Member is subject;

     ii. There shall be debited to each Member’s Capital Account (1) the amount of
money and the Asset Value of any Property distributed to such Member pursuant to
this Agreement; (2) such Member’s distributive share of Losses; (3) any items of
expense or loss which are specially allocated to such Member under this Agreement,
and (4) the amount of liabilities (determined as provided in Code Section 752(c) and
the Regulations thereunder) of such Member assumed by the Company (within the
meaning of Code Section 704) or to which Property contributed to the Company by such
Member is subject; and

     iii. The Capital Account of any transferee Member shall include the appropriate
portion of the Capital Account of the Member from whom the transferee Membership
Interest was obtained.

     e. “Depreciation” for any Fiscal Year or other period means the cost recovery deduction
with respect to an asset for such year or other period as determined for federal income tax
purposes, provided that if the Asset Value of such asset differs from its Basis at the
beginning of such year or other period, depreciation shall be determined as provided in
Regulations Section 1.704-1(b)(2)(iv)(g)(3).

     f. “Profits” and “Losses” for any Fiscal Year or other period means an amount equal to
the Company’s net taxable income or net loss for such year or period determined in
accordance with Code Section 703(a) and the Regulations thereunder with the following
adjustments:

     i. All items of income, gain, loss and deduction of the Company required to be
stated separately shall be included in taxable income or loss;

     ii. Income of the Company exempt from federal income tax shall be treated as
taxable income;

     iii. Expenditures of the Company described in Code Section 705(a)(2)(B) or
treated as such expenditures under Regulations Section 1.704-1(b)(2)(iv)(i)(1) shall
be subtracted from taxable income;

     iv. In the event the Asset Value of any Company asset is adjusted pursuant to
Sections 1.1(b)(ii) or (iii) of this Appendix, the amount of such adjustment shall
be taken into account as gain or loss from the disposition of such asset for the
purposes of computing Profits or Losses;

     v. Gain or loss resulting from the disposition of Property from which gain or
loss is recognized for federal income tax purposes shall be determined with
reference to the Asset Value of such Property;

 

 

     vi. Depreciation shall be determined based upon Asset Value as determined under
Regulations Section 1.704-1(b)(2)(iv)(g)(3) instead of as determined for federal
income tax purposes; and

     vii. To the extent an adjustment to the adjusted tax basis of any Company asset
pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to
Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining
Capital Accounts as a result of a distribution other than in complete liquidation of
a Membership Interest, the amount of such adjustment shall be treated as an item of
gain (if the adjustment increases the basis of the asset) or loss (if the adjustment
decreases the basis of the asset) from the disposition of the asset and shall be
taken into account for purposes of computing Profits and Losses.

     viii. Items which are specially allocated shall not be taken into account; and

     ix. For the avoidance of doubt, except as specifically provided herein,
allocation will be made only of net taxable income or net losses and not individual
items of net taxable income or net loss.

     1.2. Special Allocations of Profits and Losses.

     a. Minimum Gain Chargeback. Notwithstanding any other provision of this
Appendix, if there is a net decrease in Company Minimum Gain (as defined in Regulations
Section 1.704-2(d)) during any Fiscal Year, then each Member shall be allocated such amount
of income and gain for such year (and subsequent years, if necessary) determined under and
in the manner required by Regulations Section 1.704-2(f) as is necessary to meet the
requirements for a minimum gain chargeback as provided in that Regulation.

     b. Member Nonrecourse Debt Minimum Gain Chargeback. Notwithstanding any other
provision of this Appendix, if there is a net decrease in Member Nonrecourse Debt Minimum
Gain (as defined in accordance with Regulations Section 1.704-2(i)(3)) attributable to a
Member Nonrecourse Debt (as defined in Regulations Section 1.704-2(b)(4)) during any Fiscal
Year, any Member who has a share of the Member Nonrecourse Debt Minimum Gain attributable to
such Member Nonrecourse Debt determined in accordance with Regulations Section 1.704-2(i)(5)
shall be allocated such amount of income and gain for such year (and subsequent years, if
necessary) determined under and in the manner required by Regulations Section 1.704-2(i)(4)
as is necessary to meet the requirements for a chargeback of Member Nonrecourse Debt Minimum
Gain as is provided in that Regulation.

     c. Qualified Income Offset. If a Member unexpectedly receives any adjustment,
allocation or distribution described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or
(6), items of Company income and gain shall be specifically allocated to such Member in an
amount and manner sufficient to eliminate, to the extent required by the Regulations, the
Adjusted Capital Account Deficit of such Member as quickly as possible, provided that an
allocation pursuant to this Subsection shall be made only if and to the extent that such
Member would have an Adjusted Capital Account Deficit after all other allocations provided
for in Sections 6.1, 6.2, and 6.3 of the Agreement and this
Section 1.2 have been made without giving effect to this Subsection 1.2(c).

     d. Gross Income Allocation. In the event any Member has a deficit Capital
Account at the end of Fiscal Year which is in excess of the sum of (i) the amount such
Member is obligated to restore pursuant to this Agreement, and (ii) the amount such Member
is deemed to be

 

 

obligated to restore pursuant to Regulations 1.704-2(g)(1) and 1.704-2(i)(5), each such
Member shall be specially allocated items of Company income and gain in the amount of such
excess as quickly as possible, provided that an allocation pursuant to this Subsection shall
be made only if and to the extent that such Member would have a deficit Capital Account
after all other allocations provided for in Sections 6.1, 6.2 and
6.3 of the Agreement and this Section 1.2 have been made without giving
effect to Subsection 1.2(c) and this Subsection 1.2(d).

     e. Nonrecourse Deductions. Nonrecourse Deductions (as defined and determined
in Regulations Sections 1.704-2(b) and 1.704-2(c)) for any Fiscal Year shall be allocated
among the Members in proportion to their Common Percentage Interests except to the extent
that applicable Regulations require that such deductions be allocated in some other manner.

     f. Member Nonrecourse Deductions. Any Member Nonrecourse Deductions (as
defined under Regulations Section 1.704-2(i)(2)) shall be allocated pursuant to Regulations
Section 1.704-2(i)(1) to the Member who bears the economic risk of loss with respect to the
“Member Nonrecourse Debt” to which it is attributable.

     g. Code Section 754 Adjustment. To the extent that an adjustment to the Basis
of any asset pursuant to Code Section 734(b) or Code Section 743(b) is required to be taken
into account in determining Capital Accounts as provided in Regulations Section
1.704-1(b)(2)(iv)(m), the adjustment shall be treated (if an increase) as an item of gain or
(if a decrease) as an item of loss, and such gain or loss shall be allocated to the Members
consistent with the allocation of the adjustment pursuant to such Regulation.

     h. Purpose and Application. The purpose and the intent of the special
allocations provided for in Section 6.3 of the Agreement and Sections 1.2(a)
through (g) of this Appendix are to comply with the provisions of Regulations
Sections 1.704-1(b) and 1.704-2, and such special allocations are to be made so as to
accomplish that result. However, to the extent possible, the Board, in allocating items of
income, gain, loss, or deduction among the Members, shall take into account the special
allocations in such a manner that the net amount of allocations to each Member shall be the
same as such Member’s distributive share of Profits and Losses would have been had the
events requiring the special allocations not taken place. The Board shall apply the
provisions of this Section in whatever order the Board reasonably believes will minimize the
effect of the special allocations.

     1.3. General Provisions.

     a. Except as otherwise provided in this Agreement, the Members’ distributive shares of
all items of Company income, gain, loss, and deduction are the same as their distributive
shares of Profits and Losses.

     b. The Board shall allocate Profits, Losses, and other items properly allocable to any
period using any method permitted by Code Section 706 and the Regulations thereunder.

     c. To the extent permitted by Regulations Section 1.704-2(h) and Section 1.704-2(i)(6),
the Board shall endeavor to avoid treating distributions as being from the proceeds of a
Nonrecourse Liability (as defined in Regulations Section 1.752-1(a)(2)) or a Member
Nonrecourse Debt.

     d. If there is an increase or decrease in one or more Member’s membership interest in
the Company during a Fiscal Year, each Member’s distributive share of Profits or Losses or

 

 

any item thereof for such Fiscal Year shall be determined by any method prescribed by
Code Section 706(d) or the Regulations thereunder that takes into account the varying
Members’ Interests in the Company during such Fiscal Year.

     e. The Members agree to report their shares of income and loss for federal income tax
purposes in accordance with the provisions of this Appendix.

     1.4. Code Section 704(c) Allocations. Solely for federal income tax purposes and not
with respect to determining any Member’s Capital Account, distributive shares of Profits, Losses,
other items, or distributions, a Member’s distributive share of income, gain, loss, or deduction
with respect to any Property (other than money) contributed to the Company, or with respect to any
Property the Asset Value of which was determined as provided in this Agreement upon the acquisition
of Membership Interest in the Company by a new Member or existing Member in exchange for a Capital
Contribution, shall be determined in accordance with Code Section 704(c) and the Regulations
thereunder or with the principles of such provisions, using any reasonable method selected by the
Board with the approval of a Majority-in-Interest of the Investors, provided that the
Company shall be authorized to use, without the approval of a Majority-in-Interest of the
Investors, the so-called “traditional method” described in Section 1.704-3(b) of the Regulations
with respect to any Section 704(c) allocations to CDP resulting from CDP’s contribution of assets
to the Company on April 26, 2007.

     In the event the Asset Value of any Company asset is adjusted pursuant to Section
1.1(b)(iii) hereof, subsequent allocations of income, gain, loss, and deduction with respect to
such asset shall take account of any variation between the adjusted basis of such asset for federal
income tax purposes and its Asset Value in the same manner as under Code Section 704(c) and the
Regulations thereunder.

     1.5. Curative Reallocations Regarding Payments to Members. To the extent that
compensation paid to any Member by the Company ultimately is not determined to be a guaranteed
payment under Code Section 707(c) or a payment other than in his capacity as a Member pursuant to
Code Section 707(a), the Member shall be specially allocated gross income of the Company in an
amount equal to the amount of such compensation, and the Member’s Capital Account shall be adjusted
to reflect the payment of such compensation. If the Company’s gross income for a Fiscal Year is
less than the amount of such compensation paid in such year, the Member shall be specially
allocated gross income of the Company in the succeeding year or years until the total amount so
allocated equals the total amount of such compensation.

     1.6. Special Basis Adjustment. At the request of either the transferor or transferee
in connection with a transfer of a Membership Interest in the Company, the Board will, at the
request of any Member, cause the Company to make the election provided for in Code Section 754 and
maintain a record of the adjustments to Basis of Property resulting from that election. Any such
transferee shall pay all costs incurred by the Company in connection with such election and the
maintenance of such records.

     1.7. Tax Matters Member.

     a. CDP is hereby designated the Tax Matters Member (as defined in Section 6231(a)(7) of
the Code) on behalf of the Company and shall take steps so that each “eligible member” is a
“notice partner” as defined in Code Section 6231.

     b. Without the consent of the Board, the Tax Matters Member shall have no right to
extend the statute of limitations for assessing or computing any tax liability against the
Company or the amount of any Company tax item.

 

 

     c. If the Tax Matters Member elects to file a petition for readjustment of any Company
tax item (in accordance with Code Section 6226(a)) such petition shall be filed in the
United States Tax Court unless otherwise agreed by the Board.

     d. The Tax Matters Member shall, within ten (10) Business Days after receipt thereof,
forward to each Member a photocopy of any correspondence relating to the Company received
from the Internal Revenue Service. The Tax Matters Member shall, within ten (10) Business
Days thereof, advise each Member in writing of the substance of any conversation held with
any representative of the Internal Revenue Service.

     e. Any reasonable costs incurred by the Tax Matters Member for retaining accountants
and/or lawyers on behalf of the Company in connection with any Internal Revenue Service
audit of the Company shall be expenses of the Company. Any accountants and/or lawyers
retained by the Company in connection with any Internal Revenue Service audit of the Company
shall be selected by the Tax Matters Member and the fees therefor shall be expenses of the
Company.

 

 

Schedule 10.19

	 	1.	 	Ownership and sales of timeshare inventory at the Jockey Club.
	 
	 	2.	 	Ownership and sales of timeshare inventory at the Carriage House.
	 
	 	3.	 	Potential purely passive overrides from future Marriott projects
located in Clark County, Nevada based on a previous transaction.
	 
	 	4.	 	Investment in JeanCo, LLC, an MGM Mirage-controlled joint venture,
which currently has no timeshare development in its business plan.

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