Document:

EXHIBIT 10.1

Joint Venture Agreement

 

This Joint Venture Agreement ("Agreement"), made on 24 day of February, 2015 by and between DTREDS Consolidated Inc., of P.O. Box 20204, Washington, District of Columbia, 20041 (“DCI”) and eCrypt Technologies, Inc., of 4004 Sugarloaf Drive, Austin, Texas, 78738 (“ECRY”). The parties are hereinafter sometimes referred to together as the "Joint Venturers" or the "Parties" and individually as a "Joint Venturer" or "Party."

 

The Parties wish to establish a Joint Venture for the purpose of providing funding to DCI for the acquisition of mutually agreed upon subsidiary companies (the "Joint Venture"); and

 

The Parties wish to enter into an agreement to carry out the purpose of the Joint Venture and to define the respective rights and obligations of the Parties with respect to the Joint Venture.

 

Therefore, in consideration of the mutual promises, covenants, warranties and conditions herein, the Joint Venturers agree as follows:

 

I. Name. The parties hereby form and establish a Joint Venture to be conducted under the name of eCrypt/DCI Joint Venture, (hereinafter referred to as the "Joint Venture"). The Joint Venturers agree that the legal title to the Joint Venture property and assets, including the Joint Venture itself, shall remain in the name of the Joint Venture.

 

II. Place of Business & Term. The principal place of business of the Joint Venture shall be located at1329 Shepard Drive, Suite 2, Sterling, VA 20164 with a mailing address of P.O. Box 20204, Washington, District of Columbia, 20041. The term of the Joint Venture shall commence on the execution date hereof and shall continue until the Parties mutually agree to dissolve the Joint Venture, provided, however, that the Joint Venture shall be dissolved prior to such agreed upon date upon the sale or disposal of the Joint Venture and the payment or satisfaction of all debts of the Joint Venture.  Notwithstanding anything to the contrary herein, the Parties shall form the Joint Venture, execute and file definitive Articles of Incorporation for the Joint Venture, and enter into a definitive operating agreement governing the Joint Venture and the rights and obligations of the Parties with respect thereto, with the terms of the fully executed operating agreement replacing and superseding in its entirety this Agreement.

 

III. Purpose. The Joint Venturers form this Joint Venture to: provide funding to DCI for the acquisition of mutually agreed upon subsidiary companies. To the extent set forth in this Agreement, each of the Joint Venturers shall own an undivided fractional part in the business. The Joint Venture shall not engage in any other business or activity without the written consent of the Joint Venturers.

 

	 
	
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IV. Capital. Separate capital accounts shall be maintained for each Joint Venturer and shall consist of the sum of its contributions to the capital of the Joint Venture plus its share of the profits of the Joint Venture, less its share of any losses of the Joint Venture, and less any distributions to or withdrawals made by or attributed to it from the Joint Venture.

 

The contributions from each of the Joint Venturers, for the purpose of this Joint Venture, is the sum set after the name of each Joint Venturer as follows:

 

DTREDS Consolidated Inc. $100.00 

eCrypt Technologies, Inc. $100.00

 

The Joint Venturers shall make such other capital contributions required to enable the Joint Venture to carry out its purposes as set forth herein and as the Joint Venturers may mutually agree upon. The Joint Venturers shall arrange for or provide any financing as may be required by the Joint Venture for carrying out the purposes of the Joint Venture. The terms and conditions of all such loans shall be subject to prior approval of the Joint Venturers. The Joint Venturers shall endorse, assume, or guarantee such obligations of the Joint Venture as the Joint Venturers may mutually agree upon.

 

V. Percentage Interest in the Joint Venture. Upon DCI’s contribution of the following assets to the Joint Venture, DCI shall be issued 50 membership interest units of the Joint Venture.  DCI shall contribute those assets to the Joint Venture sufficient for the Joint Venture to obtain the financing described below.

 

Upon ECRY securing $4,000,000 in financing for the Joint Venture, ECRY shall be issued 50 membership interest units of the Joint Venture.  The respective percentage interest in the Joint Venture owned by each Joint Venturer, respectively, shall then be as follows:

 

DTREDS Consolidated Inc. 50 

eCrypt Technologies, Inc. 50

 

VI. Profits. The net profits as they accrue for the term of this Agreement, or so long as the Joint Venturers are the owners in common of the business interest, shall be distributed between the Joint Venturers, based on the respective percentage interests in the Joint Venture owned by each Joint Venturer.

 

VII. Expenses of Venture. All losses and disbursements in acquiring, holding and protecting the business interest and the net profits shall, during the period of the venture, be paid by the Joint Venture.

 

VIII. Duties of Joint Venturers.

 

The duties of DTREDS Consolidated Inc. are: DCI shall have full, exclusive and complete authority and discretion in the management and control of the day to day operations of the Joint Venture for the purposes herein stated and shall make all decisions affecting the day to day operations of the Joint Venture. As such, any action taken shall constitute the act of, and serve to bind the Joint Venture. DCI shall manage and control the affairs of the Joint Venture to the best of its ability and shall use its best efforts to carry out the day to day business operations of the Joint Venture.

 

The duties of eCrypt Technologies, Inc. are: eCrypt shall provide general business mentorship, including, but not limited to marketing, staff employment,  mentoring, and business focus. 

 

	 
	
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IX. Powers of Joint Venturers. The following powers may be exercised only upon the consent of both of the Joint Venturers:

 

(a) The power to borrow money on the general credit of the Joint Venture in any amount, or to create, assume, or incur any indebtedness to any person or entity except for the indebtedness provided for in Section IV of this Agreement;

 

(b) The power to make loans in any amount, to guarantee obligations of any person or entity, or to make any other pledge or extension of credit;

 

(c) The power to purchase or otherwise acquire any other property except in the ordinary course of business of the Joint Venture;

 

(d) The power to sell, encumber, mortgage or refinance any loan or mortgage on any of the Joint Venture property;

 

(e) The power to confess any judgment against the Joint Venture, or to create, assume, incur or consent to any charge (including any deed of trust, pledge, encumbrance or security interest of any kind) upon any property or assets of the Joint Venture;

 

(f) The power to spend any renovation or remodeling funds or to make any other expenditures except for routine day-to-day maintenance and operation of the Joint Venture.

 

X. Confidential Information. "Confidential Information" means nonpublic information that (a) the disclosing Party designates as confidential, or (b) which, under the circumstances surrounding disclosure, ought to be treated as confidential. Confidential Information may include, without limitation, Technology, Technology Improvements, Derivative Works, Intellectual Property Rights, Marketing Materials, ideas, know-how, methods, formulae, processes, designs, apparatus, devices, techniques, systems, flow charts, sketches, photographs, plans, drawings, specifications, computer programs or software, samples, studies, findings, data, reports, projections, plant and equipment expansion plans, lists or identities of employees, customers or X6Ds, financial statements or other financial information, pricing information, cost and expense information, product development and marketing plans, compositions of matter, discoveries and inventions (whether or not patentable), works of authorship (whether or not protected under copyright laws), information, algorithms, procedures, notes, summaries, descriptions, results and the like.

 

Derivative Works. "Derivative Works" means works that are based upon one or more pre-existing works, such as: (a) for copyrightable or copyrighted material, any translation, portation, modification, correction, addition, extension, upgrade, improvement, compilation, abridgment, revision or other form in which such material may be recast, transformed, or adapted; (b) for patentable or patented material, any improvement thereon; and (c) for material that is protected by trade secret, any new material derived from such existing trade secret material, including new material that may be protected by any of copyright, patent, and trade secret.

 

Intellectual Property Rights. "Intellectual Property Rights" means any and all patent, copyright, trademark, trade secret, know-how, trade dress or other intellectual or industrial property rights or proprietary rights (including, without limitation, all claims and causes of action for infringement, misappropriation or violation thereof and all rights in any registrations, applications and renewals thereof), whether existing now or in the future, whether worldwide or in individual countries or political subdivisions thereof, or regions, including, without limitation, the United States.

 

	 
	
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Technology. "Technology" means materials, packaging, products, know-how and methods of manufacturing thereof as provided by a Party herein, and including all Intellectual Property Rights embodied therein and any Derivative Works thereof. Technology further means, without limitation, any designs, materials, methods, formulae, processes, technology, apparatus, devices, techniques, systems, flow charts, sketches, photographs, plans, drawings, specifications, proprietary information, know-how, trade secrets, computer programs or software, samples, studies, findings, data, reports, projections, manufacturing specifications and methods, testing specifications and methods, pricing information, cost and expense information, product development and marketing plans, compositions of matter, discoveries and inventions (whether or not patentable), works of authorship (whether or not protected under copyright laws), information, algorithms, procedures, notes, summaries, descriptions and development results related to any materials, packaging, products, know-how and methods of manufacturing thereof.

 

Technology Improvements. "Technology Improvements" means any proprietary information, know-how, trade secrets, programs, designs, processes, methods, formulae, compositions of matter, documents, materials, technology, data, Intellectual Property Rights, or Derivative Works in developments and/or conceptions created, obtained or developed by either Party alone (including through the efforts of any independent contractor or affiliate of that Party) or together with the other Party that: (a) are based on, derived from or are direct improvements to Technology, (b) can be used in or in the production of Technology, or (c) provide alternatives for use in the production of Technology that, if so used, reasonably would: (i) add Technology capability or increase Technology efficiency or quality, (ii) reduce Technology manufacturing or Technology costs, and/or (iii) facilitate the manufacturing of Technology.

 

Treatment of Proprietary and Confidential Information.

 

1. In connection with the performance of this Agreement, each Party contemplates the disclosure by it of certain Confidential Information to the other Party. Each Party considers its Confidential Information to be an asset of substantial commercial value, having been developed at considerable expense, but will disclose such information to the other Party under the terms and conditions of this Agreement.

 

(a) During the Term and continuing thereafter for 5 year(s) from the termination or expiration of the Agreement, the Party receiving Confidential Information ("Receiving Party") from the disclosing Party ("Disclosing Party") shall (i) treat all Confidential Information disclosed by the Disclosing Party as secret and confidential and shall not disclose all or any portion of the Confidential Information to any other Person, except as provided in section 1.1(b), (ii) not use any of such Confidential Information except in the performance of the Receiving Party's covenants and obligations or otherwise as contemplated under this Agreement, and (iii) restrict access to Confidential Information to the Receiving Party's employees (including contractors, accountants and counsel and similar representatives) who have a need to know such information in connection with the performance of the Receiving Party's obligations and covenants under this Agreement and shall be responsible to ensure that such employees maintain the terms of confidentiality and nonuse as required in this Agreement. 

 

(b) In the event that either Party desires to use a third party service provider ("Service Provider"), including, for example, an engineering design firm or a contract manufacturer, to develop or produce the Product using Technology or Technology Improvements, all Parties to this Agreement must first enter into at least an acceptable non-disclosure and technology ownership agreement with the Service Provider. Neither Party to this Agreement may disclose any Confidential Information to a Service Provider unless (i) both Parties to this Agreement have individually entered into a non-disclosure agreement with the Service Provider and (ii) the Service Provider has a presence in the United States and is able to be served legal documents in the United States or agrees, in writing, that it can be served and that United States Courts have personal jurisdiction over the Service Provider.

 

	 
	
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2. Notwithstanding anything to the contrary herein, Confidential Information shall not include any information that: (a) is presently in the Receiving Party's possession, provided that such information has not been obtained from the Disclosing Party and that such possession can be demonstrated by the Receiving Party's written records; (b) is, or becomes, generally available to the public through no act or omission of the Receiving Party; (c) is received by the Receiving Party in written form from a third party having no binding obligation to keep such information confidential; or (d) is required to be disclosed by law, upon the advice of legal counsel..

 

3. Specific Confidential Information shall not be deemed to be available to the public or in the possession of the Receiving Party merely because it is embraced by more general information so available or in said Receiving Party's possession, nor shall a combination or aggregation of features which form confidential information be deemed to be non-confidential merely because the individual features, without being combined or aggregated, are non-confidential.

 

4. Each of the Parties hereby agrees that all written or other tangible forms of Confidential Information (including any materials generated by the Receiving Party related to any Confidential Information) shall be and remain the property of its owner and shall be promptly returned to the owner upon the written request of the owner.

 

5. Neither the Agreement nor the disclosure of any information by the Disclosing Party shall be deemed to constitute by implication or otherwise, a vesting of any title or interest or a grant of any license, immunity or other right to the Receiving Party with regard to the Confidential Information. Additionally, except as expressly provided in this Agreement, the execution of the Agreement shall not operate, directly or indirectly, to grant to either Party any rights under any patent, trade secret or know-how now or hereafter owned by or licensed to the other Party.

 

6. Each Party warrants that it is the rightful owner of the Confidential Information to be disclosed under this Agreement and that it has the lawful right to make such disclosure.

 

7. In the event that the Receiving Party or any of its representatives are requested or required to disclose Confidential Information pursuant to a subpoena or an order of a court or government agency, the Receiving Party shall (a) promptly notify the Disclosing Party of the existence, terms and circumstances surrounding the governmental request or requirements; (b) consult with the Disclosing Party on the advisability of taking steps to resist or narrow the request; (c) if disclosure of Confidential Information is required, furnish only such portion of the Confidential Information as the Receiving Party is advised by counsel is legally required to be disclosed; and (d) cooperate with the Disclosing Party in its efforts to obtain an order or other reliable assurance that confidential treatment be accorded to that portion of the Confidential Information that is required to be disclosed.

 

	 
	
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Because money damages may not be a sufficient remedy for any breach of this Section of the Agreement by the Receiving Party, the Disclosing Party shall be entitled to seek equitable relief, including injunction and specific performance, as a remedy for any such breach of this Section. Such remedy shall not be deemed to be the exclusive remedy for a breach of this Section of the Agreement by the Receiving Party, but shall be in addition to all other remedies available at law or equity to the Disclosing Party. In the event of litigation relating to the Agreement, if a court of competent jurisdiction determines that the Receiving Party has breached this Section of the Agreement, then the Receiving Party shall be liable and pay to the Disclosing Party the reasonable attorneys' fees, court costs and other reasonable expenses of litigation, including any appeal therefrom. The Receiving Party further agrees to waive any requirement for the posting of a bond in connection with any such equitable relief.

 

XII. No Liability to Third Parties. The debts, obligations and liabilities of either Joint Venturer, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of such Joint Venturer, and no other Party shall be obligated for any such debt, obligation or liability of such Joint Venturer solely by reason of being a party to this Agreement or an equity holder of a JV Company.

 

XIII. Deadlock. In the event the Joint Venturers are divided on a material issue and cannot agree on the conduct of the business and affairs of the Joint Venture, then a deadlock between the Joint Venturers shall be deemed to have occurred. Upon the occurrence of a deadlock, one Joint Venturer (hereinafter referred to as the "Offeror") may elect to purchase the Joint Venture interest of the other Joint Venturer (hereinafter referred to as the "Offeree") at a price calculated as the Offeree's percentage interest in a total purchase price for all of the assets of the Joint Venture. The Offeror shall notify the Offeree in writing of the offer to purchase, stating the total purchase price for all of the assets of the Joint Venture, and the price offered for the Offeree's Joint Venture interest expressed as the Offeree's percentage interest in the Joint Venture assets multiplied by the total purchase price for all of the assets of the Joint Venture. The Offeree shall have the right to buy the interest of the Offeror at the designated price and terms, or to sell the Offeree's interest to the Offeror at the designated price and terms, whichever the Offeree may elect. The offer, when made by the Offeror, is irrevocable for thirty (30) days. The Offeree shall have ten (10) days from the receipt of such offer to make its election, that is, either to buy such interest of the Offeror or to sell its own interest, which shall be made in writing executed by the Offeree and stating the nature of the election. A Joint Venturer which is obligated to purchase the interest of another Joint Venturer pursuant to the provisions hereof shall have twenty (20) days from the date of receipt of the written election from such other Joint Venturer to pay the designated price and satisfy the terms of such purchase. Should the Joint Venturer who has received an offer to sell or buy fail to make the election required herein in a timely fashion, then such non-responding party shall be deemed to have elected and agreed to sell or buy, as the case may be, according to the terms of the offer.

 

XIV. Legal Title to the Joint Venture. The Joint Venturers agree that the legal title to the Joint Venture property and assets, including the Joint Venture itself, shall remain in the name of the Joint Venture.

 

XV. Transfers of Joint Venturers' Interests. Except as otherwise expressly permitted herein, no Joint Venturer may sell, transfer, assign or encumber its interest in the Joint Venture, or admit additional Joint Venturers, without the prior written consent of the other Joint Venturer. Any attempt to transfer or encumber any interest in the Joint Venture in violation of this Section shall be null and void.

 

	 
	
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The obligations and Rights of Transferees are as follows:

 

(a) Any person who acquires in any manner whatsoever any interest in the Joint Venture, irrespective of whether such person has accepted and adopted in writing the terms and provisions of this Agreement, shall be deemed by the acceptance of the benefit of the acquisition thereof to have agreed to be subject to and bound by all the obligations of this Agreement that any predecessor in interest of such a person was subject to or bound by;

 

(b) The person acquiring an interest in the Joint Venture shall have only such rights, and shall be subject to all of the obligations, as are set forth in this Agreement; and, without limiting the generality of the foregoing, such a person shall not have any right to have the value of its interest ascertained or receive the value of such interest or, in lieu thereof, profits attributable to any right in the Joint Venture, except as herein set forth.

 

XVI. Termination. Upon the termination or dissolution of the Joint Venture, the Joint Venturers shall proceed to liquidate the Joint Venture, and all proceeds of such liquidation shall be applied and distributed in the manner set above according to the interests held by each party in the Joint Venture. A reasonable time shall be allowed for the orderly liquidation of the Joint Venture's assets in order to minimize losses normally attendant upon such liquidation.

 

XVII. Notice. Any notices to be given under this Agreement by either party to the other may be effected either by personal delivery in writing or by mail, registered or certified, postage prepaid with return receipt requested. Mailed notices must be addressed to the addresses of the parties as they appear in the introductory paragraph of this Agreement. Each party may change its address by written notice in accordance with this paragraph. Notices delivered personally will be deemed communicated as of actual receipt; mailed notices will be deemed communicated as of 3 calendar days after mailing.

 

XVIII. Arbitration and Attorney's Fees. Any controversies or disputes arising out of or relating to this Agreement shall be resolved by binding arbitration in accordance with the then-current Commercial Arbitration Rules of the American Arbitration Association. The Joint Venturers shall select a mutually acceptable arbitrator knowledgeable about issues relating to the subject matter of this Agreement. In the event the Joint Venturers are unable to agree to such a selection, each party will select an arbitrator and the two arbitrators in turn shall select a third arbitrator, all three of whom shall preside jointly over the matter. The arbitration shall take place at a location that is reasonably centrally located between the Joint Venturers, or otherwise mutually agreed upon by the Joint Venturers. All documents, materials, and information in the possession of each party that are in any way relevant to the dispute shall be made available to the other Joint Venturer for review and copying no later than 30 days after the notice of arbitration is served. The arbitrator(s) shall not have the authority to modify any provision of this Agreement or to award punitive damages. The arbitrator(s) shall have the power to issue mandatory orders and restraint orders in connection with the arbitration. The decision rendered by the arbitrator(s) shall be final and binding on the Joint Venturers, and judgment may be entered in conformity with the decision in any court having jurisdiction. The agreement to arbitration shall be specifically enforceable under the prevailing arbitration law. During the continuance of any arbitration proceeding, the parties shall continue to perform their respective obligations under this Agreement.

 

	 
	
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XIX. Miscellaneous Partition. The Joint Venturers hereby mutually waive any right of partition which they may have with respect to the Joint Venture and any noncash assets of the Joint Venture.

 

XX. Fees and Commissions. Each Joint Venturer hereby represents and warrants to the other that it has not incurred or obligated the Joint Venture for any brokerage, finder's or other similar fees or commissions in connection with the transactions covered by this Agreement or in connection with acquiring the Joint Venture or forming this Joint Venture. Each Joint Venturer hereby agrees to indemnify and hold harmless the other from and against all liabilities, costs, damages and expenses from any breach or alleged breach of the foregoing representation.

 

XXI. Waiver. Failure on the part of either Joint Venturer to complain of any act of the other Joint Venturer or to declare the other Joint Venturer in default, irrespective of how long such failure continues, shall not constitute a waiver by such Joint Venturer of its rights hereunder. No waiver of, or consent to, any breach or default shall be deemed or construed to be a waiver of, or consent to, any future breach or default.

 

XXII. Severability. If any provision of this Agreement or the application thereof shall be determined by a court of competent jurisdiction to be invalid and unenforceable, the remainder of this Agreement and the application of the other provisions herein contained shall not be affected thereby, and all such other provisions shall remain effective and in force and shall be enforced to the fullest extent permitted by law.

 

XXIII. Binding Effect. This Agreement shall inure to the benefit of and be binding upon the Joint Venturers, and their heirs, successors and assigns.

 

XXIV. Duplicate Originals. This Agreement may be executed in duplicate, with each such duplicate to be considered an original for all purposes.

 

XXV. Construction of Agreement. (a) The captions contained in this Agreement are inserted only as a matter of convenience and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provision thereof. (b) As used herein, the word "person" shall include the individuals, corporations, partnerships and other entities of any type. In this Agreement, the use of any gender shall be applicable to all genders, and the singular shall include the plural, and the plural shall include the singular.

 

XXVI. Other Activities of Joint Venturers. Any Joint Venturer may engage in other business ventures of every nature and neither the Joint Venture nor the other Joint Venturer shall have any right in such independent ventures or the income and profits derived therefrom.

 

XXVII. Entire Agreement. This Agreement is intended by the Joint Venturers to be the final expression of their agreement and the complete and exclusive statement of the terms thereof, notwithstanding any representations or statements to the contrary heretofore made.

 

XXVIII. Amendments. This Agreement may be amended by the Parties hereto at any time prior; provided, however, that any amendment must be by an instrument or instruments in writing signed and delivered on behalf of each of the Parties hereto.

 

XXIV. Governing Law; Consent to Personal Jurisdiction. This Agreement will be governed by the laws of the State of Delaware without regard for conflicts of laws principles. Each Joint Venturer hereby expressly consents to the personal jurisdiction of the state and federal courts located in the state of Delaware for any lawsuit filed there against any party to this Agreement by any other party to this Agreement concerning the Joint Venture or any matter arising from or relating to this Agreement.

 

	 
	
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In witness whereof, the Joint Venturers have signed and sealed this Agreement. Executed by the Joint Venturers named above with the intent of being legally bound.

 

	eCrypt Technologies, Inc. 
4004 Sugarloaf Drive 
Austin, TX 78738		DTREDS Consolidated, Inc. 
P.O. Box 20204
Washington, DC 20041
	 		 
	/s/ Brad Lever   	 	/s/ Steve Vento 
	(authorized signature)		(authorized signature) 
	 		 
	Brad Lever 		Steve Vento 
	(Name)	 	(Name)
	 		 
	COO/CFO		COO 
	(Title)	 	(Title)
	 		 
	February 24, 2015		February 24, 2015
	(Date)		(Date)

 

 

 9DR - 12.31.2014 - Ex 10.41 Palmer EA

EXHIBIT 10.41

EXECUTION COPY
EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”) is entered into as of January 1, 2015 (the “Start Date”) as a three (3) year agreement by and between Hospitality Management and Consulting Service, L.L.C., a Nevada limited liability company (the “Company”), and David F. Palmer (the “Executive”), with reference to the following facts:
A.The Company’s parent, Diamond Resorts International, Inc. (“DRII”) and all of its affiliates (collectively, “Diamond”) is headquartered in Las Vegas, Nevada and is a leader in developing, operating, marketing and selling vacation ownership interests.
B.    The Company wishes to employ Executive for the position of President and Chief Executive Officer of DRII, and Executive wishes to be employed in such position, on the terms and conditions set forth in this Agreement, which replaces a prior services agreement between Company and Chautauqua Management, LLC under which Executive served as President and Chief Executive Officer of DRII, dated December 31, 2012 (which is hereby terminated as of the date both parties sign this Agreement).
NOW, THEREFORE, based on the above premises and in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1.Position and Duties.  
1.1    Executive shall be employed by the Company as President and Chief Executive Officer of DRII, reporting to the Board of Directors of DRII.  Executive acknowledges that frequent travel may be necessary in carrying out his duties hereunder.
1.2    Executive shall perform his duties faithfully and to the best of his ability and shall devote his full business time and effort to the performance of his duties hereunder and shall not engage in any other business duties or business pursuits or render any services of a professional nature for pay to any entity or person without the prior written consent of the Compensation Committee of DRII (“Compensation Committee”).  Executive may only participate in or serve on boards or committees of, charitable and community service organizations (or with the advance written approval of the Board, not to be unreasonably withheld, on industry boards or committees), so long as such activities do not interfere or otherwise compete with the discharge of Executive’s duties hereunder. 
2.    Term.  Except as otherwise provided herein or as the parties may otherwise agree in writing, this Agreement shall be effective as of the Start Date and remain in effect for a period of  three (3) years from the Start Date.

	
			
	 
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	Executive
	 
	Company

3.    Compensation.  
3.1    Base Salary:  For all services to be rendered by Executive pursuant to this Agreement, Executive’s annual base salary will be $2,000,000 (Two Million Dollars) per year (the “Base Salary”), payable bi-weekly in accordance with the Company’s normal payroll practices.  It is possible for the Executive’s Base Salary to be increased, after annual performance reviews conducted each January, based on the sole discretion of the Compensation Committee.
3.2    Annual Performance Bonus:  Executive will be eligible to earn an “Annual Performance Bonus” based upon achievement of objectives determined by the Compensation Committee in its discretion, provided they are consistent for similarly situated senior executives of DRII (including the President and CEO and the Executive Vice Presidents) (hereinafter “Similarly Situated Executives”).  The target bonus award will be two hundred percent (200%) of Executive's Base Salary, and the annual bonus may be in a greater amount if so determined by the Compensation Committee.  The Company agrees to pay any prior year bonus that is authorized by the Compensation Committee by March 15th of the following year, for so long as such timing is applicable to Similarly Situated Executives.  
3.3     Equity Incentive Plans:  Executive shall be eligible for continued participation in the Diamond Resorts International, Inc. Incentive Compensation Plan (or any successor plan) and to participate in any other equity option, share grant or similar program established by Diamond for the benefit of its executives, on a basis consistent with Similarly Situated Executives, subject to the terms of the plans under which awards occur and any associated grant agreements.
4.    Other Benefits.
4.1    Executive Health Insurance Package and General Programs.  Executive shall be entitled to participate in Diamond’s Executive Health Insurance Package available to Diamond executives upon Start Date, subject to its terms and conditions as in effect from time to time.  In addition, Executive is entitled to additional benefit programs of the Company or of Diamond for Similarly Situated Executives, if any, to the extent that his/her position, tenure, salary, age, health and other qualifications make him/her eligible to participate in such plans or programs, subject to the rules and regulations applicable thereto.  The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees and executives at any time.
4.2    Expenses.  The Company (or Diamond, as applicable) shall reimburse Executive for reasonable expenses incurred by Executive in the furtherance of or in connection with the performance of Executive’s duties hereunder, consistent with how the Company (or Diamond, as applicable) handles expense guidelines and reimbursement for Similarly Situated Executives, which procedure for all such executives is subject to change from time to time.
5.    Termination.

	
			
	 
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	Executive
	 
	Company

5.1    Termination for Cause.  The Company shall have the right at any time, exercisable immediately upon written notice subject to any available cure periods as set forth before, to terminate Executive’s employment for Cause.  “Cause” shall mean (1) Executive’s negligence or willful misconduct in the performance of Executive’s obligations hereunder, (2) breach by Executive of any provision of this Agreement, (3) any felony indictment or conviction of Executive, including a guilty plea by nolo contendere, (4) a failure of Executive to substantially perform his duties hereunder, (5) fraud, embezzlement or any other illegal or wrongful conduct by Executive upon the Company or Diamond, whether prior or subsequent to the Start Date, (6) Executive’s intentional infliction of any damage of material nature to any property of the Company or Diamond, (7) Executive’s use of illegal narcotics or other illegal substances, (8) Executive’s breach of Diamond policies or the Confidentiality and Non-Competition Agreement (the “Confidentiality Agreement”), including without limitation, sexual harassment and discrimination, and (9) Executive’s failure to comply with laws and regulations which are applicable to the Company or to Diamond.  Any notice of termination pursuant to this Section 5.1 must be in writing, delivered to Executive in the manner set forth in Section 9.1, and shall specify the action or actions constituting “Cause”.  In the case of a breach which is reasonably susceptible to cure, Executive shall have ten business days following Company’s delivery of written notice of termination to cure such breach.  Notwithstanding the foregoing, no breach of paragraphs (3), (5), (6) or (7) above shall be subject to cure by Executive.  Upon termination for Cause, Executive shall be entitled to receive (i) his Base Salary then in effect through the effective date of the termination, (ii) any Annual Performance Bonus earned in the prior year that has been authorized by the Compensation Committee but has not yet been paid, and (iii) benefits through the effective date of the termination.  No other payments or compensation of any kind will be paid.
5.2    Termination Due to Death or Disability.  This Agreement shall automatically terminate upon Executive’s death.  In addition, if Executive is unable to perform his duties by reason of any mental or physical disability or incapacity for a period of ninety (90) days of any one hundred eighty (180) day period, then upon compliance with applicable law (including without limitation, the Americans with Disabilities Act), the Company may terminate Executive’s employment upon ten (10) days’ written notice.  In either such event, Executive will receive (1) his Base Salary then in effect through the effective date of the termination, (2) a pro rata portion of his target Annual Performance Bonus for the calendar year in which the termination takes place (the “Pro Rata Performance Bonus”), and (3) benefits through the effective date of the termination.  No other payments or compensation of any kind will be paid.
5.3    Resignation.  Executive may resign and terminate his employment at any time upon ninety (90) days written notice in which event Executive will receive the same payment as if Executive were terminated for Cause.  No other payments or compensation of any kind will be paid.  This Section does not apply in the event of Executive’s resignation for Good Reason, as defined in Section 5.6 below.
5.4    Termination Without Cause.  The Company shall have the right to terminate Executive’s employment under this Agreement for any reason or for no reason, at any time and shall provide the Executive written notice of said decision.  If Executive is terminated without Cause 

	
			
	 
	3
	 

	Executive
	 
	Company

pursuant to this Section 5.4, subject to (a) the Executive’s continued compliance with each provision of the Confidentiality Agreement and (b) Executive’s execution of a release of all claims against the Company and Diamond (“the Release”), which shall be provided to Executive concurrent with notification of termination and which shall be returned to the Company within 30 days of receipt, Executive will be entitled to receive (1) his Base Salary then in effect to be paid in equal installments monthly for a period of twelve (12) months following the effective date of termination and (2) a payment of a pro rata portion of his target Annual Performance Bonus for the calendar year in which the termination takes place.  Such payments shall be made in accordance with the Company’s payroll procedures; provided that any payments otherwise due within 30 days of termination shall be paid in the first payroll period beginning thereafter.  All such payments will terminate immediately upon any breach of the Confidentiality Agreement, or post-employment covenant within the Agreement, which shall, for purposes hereof, be deemed a material breach.  These payments shall be in addition to the amounts set forth in Section 5.1(i)-(iii).  No other payments or compensation of any kind will be paid unless otherwise provided hereunder.
5.5    Termination Without Cause Following Change in Control.  Notwithstanding the foregoing, if, within six (6) months following a Change in Control, Executive is terminated without Cause pursuant to Section 5.4, subject to (a) Executive’s continued compliance with each provision of the Confidentiality Agreement, and (b) Executive’s execution of the Release, which shall be provided to Executive concurrent with notification of termination and which shall be returned to the Company within 30 days of receipt, Executive will be entitled to receive (1) an amount equal to two (2) years’ Base Salary then in effect and (2) a payment of two (2) years’ target Annual Performance Bonus.  Such amount will be payable in 12 monthly installments commencing on the first day of the month following the effective date of Executive’s termination; provided that any payments otherwise due within 30 days of termination shall be paid in the first payroll period beginning thereafter.  Such payment shall be in lieu of the payments provided under Section 5.4.  All such payments will terminate immediately upon any breach of the Confidentiality Agreement, which shall, for purposes hereof, be deemed a material breach.  These payments shall be in addition to the amounts set forth in Section 5.1(i)-(iii).
For purposes of this Section 5.5 and Section 5.6, a “Change in Control” shall mean (i) the sale, lease, transfer, conveyance or other disposition, in one transaction or a series of related transactions, of all or substantially all of the assets of Diamond and its subsidiaries, taken as a whole, (ii) the sale, transfer, conveyance or other disposition, in one transaction or a series of related transactions, of the outstanding equity securities of Diamond, or (iii) the merger, consolidation, recapitalization or reorganization of Diamond with another Person, in each case in clauses (i) and (ii) above under circumstances in which the direct or indirect holders of the voting power of outstanding equity securities, immediately prior to such transaction, are 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 Exchange Act of 1934, as amended), directly or indirectly through one or more intermediaries, of more than fifty percent (50%) of the voting power of the outstanding 

	
			
	 
	4
	 

	Executive
	 
	Company

equity securities of the surviving or resulting corporation or acquirer, as the case may be, immediately following such transaction.
5.6    Resignation for Good Reason Following Change in Control.  Notwithstanding Section 5.3, at any time within six (6) months following a Change in Control, Executive has the right to resign and terminate his employment for Good Reason (as hereinafter defined) upon prior written notice, which notice must be delivered no later than 60 days following the events giving rise to such termination right.  Upon such resignation, subject to (a) Executive’s continued compliance with each provision of the Confidentiality Agreement and (b) Executive’s execution of a release of all claims against the Company and Diamond (“the Release”), which shall be provided to Executive concurrent with notification of termination and which shall by returned to the Company within 30 days of receipt, Executive will be entitled to receive (1) an amount equal to two (2) years’ Base Salary then in effect and (2) a payment of two (2) years’ target Annual Performance Bonus.  Such amount will be payable in 12 monthly installments commencing on the first day of the month following the effective date of Executive’s resignation; provided that any payments otherwise due within 30 days of termination shall be paid in the first payroll period beginning thereafter.  All such payments will terminate immediately upon any breach of the Confidentiality Agreement or post-employment covenant within the Agreement, which shall, for purposes hereof, be deemed a material breach.  These payments shall be in addition to the amounts set forth in Section 5.1(i)-(iii).
(i)    A resignation shall be deemed to be for “Good Reason” if, within four (4) months after a Change in Control, Executive provides the Company with written notice of any of the following occurrences within thirty (30) days after its first occurrence and the Company fails to cure such conduct within thirty (30) days of the receipt by the Company of written notice by Employee stating the nature of such conduct:  (A) it follows a material reduction of Executive’s duties and responsibilities; (B) it follows Executive’s being required to work solely or substantially at a location more than 50 miles from a location where he has been permitted to work prior to the Change in Control; or (C) it follows a material breach of this Agreement (which shall include, without limitation, a reduction in Executive’s then-effective Base Salary or target Annual Performance Bonus opportunity) by the Company.  Good Reason shall also exist if, as of the effective date of the Change in Control, the remaining term of this Agreement (as such may have been amended or extended) is less than one (1) year, and the Executive’s resignation follows the refusal of the Company (or any successor thereto) to enter into either an extension of this Agreement or a new employment agreement with Executive that provides for an employment term of at least one (1) additional year and provides for Executive’s employment on substantially identical terms and conditions (including compensation and benefits) as contained in this Agreement.
5.7     Expiration.  Expiration of this Agreement at the end of its term does not constitute Termination under any of the provisions of the Agreement.

	
			
	 
	5
	 

	Executive
	 
	Company

6.    Indemnification.  Notwithstanding the foregoing, the Executive will be entitled to indemnification for all claims to the full extent permitted by Company by-laws and applicable law during and after the termination of Executive’s employment.
7.    Advice of Counsel.  Executive acknowledges that he has had the opportunity to be represented by counsel in the negotiation of this Agreement, at his own expense, and is fully aware of his rights and obligations under this Agreement.
8.    Successors.
8.1    Company’s Successors.  This Agreement shall be assigned by the Company to any corporation or other business entity which succeeds to all or substantially all of the business of the Company through merger, consolidation, corporate reorganization or by acquisition of all or substantially all of the assets of the Company and which assumes the Company’s obligations under this Agreement.  The terms and conditions of this Agreement including Exhibit A to this Agreement shall inure to the benefit of and be binding upon and shall be enforceable by any such assignee or successor to the business of the Company.  
8.2    Executive’s Successors.  Executive shall not assign or transfer this Agreement or any right or obligation under this Agreement to any other person or entity.
9.    Notice.
9.1    Manner.  Any notice required or permitted by this Agreement shall be in English and shall be forwarded to the parties by certified mail, return receipt requested, by personal delivery service, or by facsimile, so long as there is evidence of receipt by the other party, under local law, at the following addresses, or at any subsequent addresses given by the parties:
If to Employee:            Hospitality Management and Consulting Service,                             L.L.C.
c/o Diamond Resorts Management, Inc.
10600 West Charleston Blvd 
Las Vegas, Nevada 89135 
Attention:  David F. Palmer 
Tel:  (702) 823-7400 

		
	If to Company:
	Hospitality Management and Consulting Service, L.L.C. 
c/o Diamond Resorts Management, Inc. 
10600 West Charleston Blvd 
Las Vegas, Nevada 89135 
Attention:  Howard S. Lanznar  
Tel:  (702) 823-7675

	
			
	 
	6
	 

	Executive
	 
	Company

Any changes in the above addresses for notice shall be provided to the party to this Agreement pursuant to the above terms within ten (10) days of such change.
9.2    Effectiveness.  Any notice or other communication required or permitted to be given under this Agreement will be deemed given on the day when delivered in person, or the business day after the day on which such notice was mailed in accordance with Section 9.1.
10.    Governing Law/Venue.  This Agreement shall be governed by and construed in accordance with the internal substantive laws, but not the choice of law rules, of the state of Nevada and venue shall be in Clark County, Nevada.  The Company and Executive each hereby irrevocably consent to the exclusive jurisdiction of the courts of the State of Nevada for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement.
11.    Arbitration.  Any dispute between the parties to this Agreement shall be governed by the provisions of Exhibit B:  Agreement to Arbitrate Claims, which exhibit is incorporated herein by this reference, provided that the Company may seek injunctive or equitable relief from any court of competent jurisdiction, as provided in the Confidentiality Agreement.
12.    Severability.  The invalidity or unenforceability of any provision of this Agreement, or any terms hereof, shall not affect the validity or enforceability of any other provision or term of this Agreement.
13.    Confidentiality.  Executive acknowledges that he concurrently is executing the Confidentiality and Non-Competition Agreement in a form attached hereto as Exhibit A attached hereto and incorporated by this reference.
14.    Integration.  This Agreement, the Confidentiality Agreement and any associated indemnification agreements represent the entire agreement and understanding between the parties as to the subject matter herein and supersede all prior or contemporaneous agreements whether written or oral.  No waiver, alteration, or modification of any of the provisions of this Agreement shall be binding unless approved by the Compensation Committee, memorialized in writing and signed by a duly authorized officer of the Company and Executive.
15.    Taxes.  All payments made pursuant to this Agreement shall be subject to withholding of such applicable income and employment taxes as the Company determines to be required by applicable law. Executive shall be solely responsible for all taxes imposed on Executive by reason of the receipt of any amount of compensation or benefits payable to Executive under this Agreement.  Although the payments and benefits provided hereunder are intended to be structured in a manner to avoid the implication of any additional or excise taxes under Sections 409A or 4999 of the Internal Revenue Code (as amended from time to time, the “Code”), in no event whatsoever shall the Company or any of its affiliates have any obligation to pay, mitigate, or protect Executive from any such tax liabilities, including any imposed under Sections 409A and/or 4999.

	
			
	 
	7
	 

	Executive
	 
	Company

Notwithstanding any other provision of this Agreement, if the total severance-related payments and benefits to be paid to the Executive under this Agreement, along with any other payments to the Executive under any other agreement, plan, program, or arrangement, would result in the Executive being subject to the excise tax imposed by Section 4999 of the Code, the Company shall reduce the aggregate payments hereunder to the largest amount which can be paid to the Executive without triggering the excise tax, but only if and to the extent that such reduction would result in the Executive retaining larger aggregate after-tax payments.  The determination of the excise tax and the aggregate after-tax payments to be received by the Executive will be made by the Company after consultation with its advisors and in material compliance with applicable law.  For this purpose, the parties agree that the payments provided for in Section 5 of this Agreement are intended to be reasonable compensation for refraining from performing services after termination of employment (i.e, the Executive’s obligations pursuant to that Section of this Agreement to the maximum extent possible, and if necessary or desirable, the Company will retain a valuator or consultant to determine the amount constituting reasonable compensation.  If payments are to be reduced, to the extent permissible under Section 4999 of the Code, payments will be reduced in a manner that maximizes the after-tax economic benefit to the Executive and to the extent consistent with that objective, in the following order of precedence: (A) first, payments will be reduced in order of those with the highest ratio of value for purposes of the calculation of the parachute payment to projected actual taxable compensation to those with the lowest such ratio, (B) second, cash payments will be reduced before non-cash payments, and (C) third, payments to be made latest in time will be reduced first.  Any reduction will be made in a manner that is intended to avoid a tax being incurred under Code Section 409A, starting in all cases with reductions of payments and benefits that are exempt from Section 409A.
16.    409A Compliance.  If, at the time of Executive’s “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h), Executive is a “specified employee” (within the meaning of Code Section 409A), any benefit as to which Section 409A penalties could be assessed that becomes payable to Executive on account of Executive’s “separation from service” shall be paid to the Executive, without interest thereon, on the date six months and one day after such separation from service.  It is intended that any amounts payable under this Agreement and the Company’s and the Executive’s exercise of authority or discretion hereunder shall comply with and avoid the imputation of any tax, penalty, or interest under Code Section 409A and the regulations and guidance promulgated thereunder (collectively, the “Nonqualified Deferred Compensation Rules”).  This Agreement shall be construed and interpreted consistent with that intent.
With respect to any expenses eligible for reimbursement that are required to be included in Executive’s gross income for federal income tax purposes, such expenses shall be reimbursed to Executive no later than December 31 of the year following the year in which Executive incurs the related expenses.  In no event shall the amount of expenses (or in-kind benefits) eligible for reimbursement in one calendar year affect the amount of expenses (or in-kind benefits) eligible for reimbursement in any other calendar year (except for those medical reimbursements referred to in Section 105(b) of the Internal Revenue 

	
			
	 
	8
	 

	Executive
	 
	Company

Code of 1986), nor shall Executive’s right to reimbursement or in-kind benefits be subject to liquidation or exchange for another benefit. In no event shall any payment under this Agreement that is subject to Code Section 409A be made by the Company (prior to the termination of this Agreement) unless such payment would be classified as a payment upon “separation from service” within the meaning of the Nonqualified Deferred Compensation Rules.  Each payment under this Agreement shall be considered a separate payment for purposes of Treasury Regulation Sections 1.409A-1(b)(4) and 1.409A-2(b)(2).
17.    Counterparts and Facsimile.  This Agreement may be executed in counterparts and by facsimile.
Executive has read this Agreement carefully and understands and accepts the obligations which it imposes upon Executive without reservation.  No other promises or representations have been made to Executive to induce Executive to sign this Agreement.  Executive is signing this Agreement voluntarily and freely.

 
EXECUTIVE
 

____/s/ David F. Palmer_________________________________
David F. Palmer

 
COMPANY
Hospitality Management and Consulting Service, L.L.C.
 
 
 
By:   ________/s/ Howard S. Lanznar__________________
Printed Name:  Howard S. Lanznar 
Title:  EVP & Chief Administrative Officer

	
			
	 
	9
	 

	Executive
	 
	Company

Exhibit A 
Confidentiality and Non-Competition Agreement
We are pleased that you have decided to serve as an employee of Hospitality Management and Consulting Service, L.L.C. (the “Company”).  We are concurrently executing an Employment Agreement with you to serve as an executive of Company’s parent, Diamond Resorts International, Inc. (collectively with all of its affiliates, “Diamond”).  As a condition to our offering you the Employment Agreement and to ensure that you understand and agree with some of our more important policies, we have described them in this Agreement.  Please read this Agreement carefully and then sign the last page if you understand and agree to it.  This is a binding contract.
1.    Confidentiality.  You acknowledge that, in the course of performing your responsibilities under this Agreement, you will form relationships and become acquainted with Confidential Information.  As an employee, you will have access to much of our Confidential Information.  By way of example, our Confidential Information includes information about Diamond’s business, independent contractor relationships, contracts, client relationships, potential customers, existing customer names, phone numbers and addresses, Diamond manuals, sales techniques, registration cards, books, records, letters, forms, customer relationships, marketing information, business plans, financial data, bank information, forecasts, strategies, and information about (or acquired from) our business partners.  We agree that the existence and negotiation of your employment agreement, and any non-public information exchanged in connection therewith, is confidential.  Please note that this is not an exhaustive list of our Confidential Information, and you agree to consult with us in advance if there is any question regarding the confidential nature of any information.  You agree to keep this information strictly confidential.  You may not use or disclose any of it for any purpose other than as necessary for Diamond business.  Furthermore, you agree that if you leave our employ you will continue to treat that information as confidential, and will return all documents and computer discs and files containing that information to us.
2.    Inventions.  We invest significant time and financial resources in the development of our business.  In recognition of this investment, you hereby irrevocably assign to us all interest in any inventions, discoveries, developments, improvements and innovations, whether or not patentable (“Inventions”) which you help develop during your employment with us.  If requested by us, you will execute specific assignments and other documents helpful or necessary to evidence our ownership of such inventions and assist us in obtaining or defending patents for such inventions.  You will promptly disclose in writing to us any inventions you help develop during your employment with us regardless of whether you believe such inventions will be the property of the Company.  We agree to treat such disclosures in confidence.
3.    Covenant Not to Compete.  You agree that our Confidential Information is valuable to us, and the restrictions on your future employment contained in this Agreement are reasonably necessary in order for us to remain competitive in our business and constitute our protectable legal 

	
			
	 
	A-1
	 

	Executive
	 
	Company

interests.  You agree that during the course of your employment with the Company you have learned and will learn trade secrets and valuable Confidential Information of Diamond, have developed and will develop substantial business relationships with specific customers and prospective customers or clients of Diamond and entities doing business with Diamond, including homeowners associations, and have developed and will develop goodwill on behalf of Diamond in every geographic area in which Diamond owns or manages properties or has plans to do so.  You have participated and will participate in specialized training on behalf of Diamond.  You acknowledge and agree that misuse or diversion of the information and relationships you have developed on behalf of Diamond anywhere Diamond owns or manages properties or has plans to do so at the termination of your employment will irreparably injure Diamond.  In consideration of our execution of the Employment Agreement and the compensation payable to you under the Employment Agreement, and in recognition of our heightened need for protection from abuse of relationships formed or Confidential Information garnered, you covenant and agree that during the term of your employment agreement and for one (1) year after termination (excluding your termination without Cause as defined therein), you will not directly or indirectly engage in the business of Diamond, which shall include without limitation, timesharing, club or affiliates that (i) operate a timeshare, interval, points membership or vacation membership resort or (ii) have a marketing or sales office that engages in the business of Diamond, anywhere that Diamond owns or manages properties or has plans to do so.
You further agree that for a period of two (2) years following your separation from the Company, you shall not directly or indirectly, whether for pay or otherwise, alone or with or on behalf of others, (a) solicit or contact for the purpose of providing, or provide (regardless of whether you engaged in solicitations) business services of the same type provided by Diamond to any homeowners association with which you have conducted business or with which you have sought to do business on behalf of Diamond; (b) divert or attempt to divert any homeowners association with which you have conducted business or attempted to conduct business on behalf of Diamond to enter into business relationships with any individuals or entities of the same or similar type as the relationships with which they have conducted with Diamond during your employment with the Company; (c) assist, encourage, or induce any homeowners association with which you have dealt on behalf of Diamond during your employment with the Company to terminate or reduce its business relationship with Diamond; (d) solicit or contact any members, prospective purchasers, guests and customers of Diamond to reduce or terminate their relationship with Diamond or to enter into relationships with individuals or entities performing or offering services in competition with Diamond; (e) provide services to any prospective purchasers, guests and customers of Diamond in competition with Diamond; (f) solicit or recruit (whether as a consultant, employee, or independent contractor) any individual who is or who was in the six (6) months preceding the solicitation or recruitment, a team member/employee of Diamond; (g) assist other individuals or entities to do the acts set forth in this Section.  It 

	
			
	 
	A-2
	 

	Executive
	 
	Company

shall not be a defense to a claim of breach of this provision that any homeowners association, owner, prospective purchaser, or customer first contacted you to seek your services.  These restrictions shall apply in any jurisdiction and location in which Diamond currently conducts or has active plans to conduct business.
Further, following your separation, you agree that you shall not use or disclose any Confidential Information or trade secrets of Diamond without written authorization of Diamond or as required by law and shall not make false or defamatory statements regarding Diamond, its business, and its officers, directors and employees.  To the extent that you have any questions as to whether any of these restrictions apply to any specific employment or business opportunity you wish to consider you shall contact the General Counsel of DRII in writing setting forth the activities in which you wish to engage and seeking a determination of whether Diamond views such proposed activities as being prohibited by this Agreement.  You agree that these prohibitions do not prohibit you from earning a living subject to the obligations contained in this Agreement.
4.    Agreements with Former Employers.  You represent and warrant to the Company that:
		
	(a)
	The performance by you of the obligations under this Agreement will not breach any agreement to keep in confidence proprietary information acquired by you in confidence or in trust prior to your employment by the Company, and during your employment by the Company you will not breach any obligation of confidentiality that you may have to any former employer.

		
	(b)
	You have not brought and will not bring to the Company or use in the performance of your duties at the Company any materials or documents of a former employer that are not generally available to the public or otherwise subject to a duty of confidentiality, unless you have obtained express written authorization from the former employer for their possession and use and delivered a copy of such authorization to the Company.

5.    Duty to Inform Subsequent Employer.  You agree that, if you are no longer employed by us, you will inform any subsequent employer (or client if you engage in consulting work) that you are a party to this Agreement and if requested will provide a copy of this Agreement to such subsequent employer or client.
6.    Records.  Because of the need for confidentiality, we must maintain tight controls over our business records.  Business records are those documents whose primary purpose is to record the actions of Diamond, including marketing and financial matters.  You may remove business records from Diamond premises to the extent necessary to carry out your responsibilities under the Employment Agreement.  Such documents shall be returned to the premises immediately once they are no longer necessary.  All documents must immediately be returned to the Company upon termination of employment.

	
			
	 
	A-3
	 

	Executive
	 
	Company

7.    Company Property.  You agree that if you leave our employ you will promptly return any Diamond property in your possession wherever it may be located.  You also agree to cooperate with and follow the instructions of Diamond and to permit access to professionals retained by Diamond for assistance in removing any digital copies of Diamond documents from the hard drives of computers or electronic data digital storage devices that you use, including flash drives, external hard drives, Personal Data Assistants, cell phones, tablet computers, and other devices.  If you do not promptly return such property, we may exercise all of our legal remedies to recover such property, and you agree to reimburse us for all expenses (including attorneys’ fees and court costs) incurred in connection with the attempt to recover such property.
8.    Injunctive Relief of Breaches.  I understand that any failure by me to perform my duties, obligations and agreements in this document could result in irreparable injury to Diamond.  We both agree that damages would be an inadequate remedy for the Company in the event of breach or threatened breach of this Agreement.  Accordingly, you agree in advance that in addition to the remedies otherwise available to the Company at law, the Company is entitled to receive restraining orders and/or injunctive relief without bond from courts of competent jurisdiction to enforce any of those duties, obligations or agreements.
9.    Arbitration.  All disputes in connection with or arising out of this Agreement shall be subject to the arbitration provisions attached hereto as Exhibit B, which exhibit is incorporated herein by this reference.  The only exception is that either you or we may seek injunctive relieve from any court having jurisdiction.  Both parties consent to exclusive jurisdiction in Clark County, Nevada.
10.    Severability.  If any portion of this Agreement is invalid or unenforceable, or if this Agreement is invalid or unenforceable in any particular circumstance, that fact shall not affect the validity or enforceability of any other provision of this Agreement or its application in any other circumstance.
11.    Governing Law.  Our respective rights and liabilities under this Agreement shall be governed by the laws of the State of Nevada, regardless of the choice of law provisions of Nevada or any other jurisdiction.
	
		
	 

Date:  __________________________ 
 

	Hospitality Management and Consulting Service, L.L.C.  

_________________________________ 
By: 
Its:

I HAVE CAREFULLY READ AND CONSIDERED THE TERMS OF THIS AGREEMENT.  I HAVE ASKED ANY QUESTIONS ABOUT THEM WHICH I MIGHT HAVE HAD AND UNDERSTAND THEIR IMPLICATIONS.  I ALSO UNDERSTAND THAT ANY CHANGES IN THIS AGREEMENT 

	
			
	 
	A-4
	 

	Executive
	 
	Company

MUST BE APPROVED BY THE COMPENSATION COMMITTEE, MEMORIALIZED IN WRITING AND SIGNED BY A DULY AUTHORIZED OFFICER OF THE COMPANY.
	
		
	 
	 

	
		
	Date:  __________________________
	_________________________________ 
David F. Palmer

 
 
DO NOT SIGN THIS AGREEMENT UNLESS YOU UNDERSTAND AND AGREE 
TO ALL OF ITS TERMS.  THIS AGREEMENT CONTAINS AN ARBITRATION CLAUSE.

	
			
	 
	A-5
	 

	Executive
	 
	Company

Exhibit B
Agreement to Arbitrate Claims

Claims Covered by the Agreement
Hospitality Management and Consulting Service, L.L.C. (the “Company”) and I mutually agree to resolve by arbitration, and only by individual arbitration, all claims, whether or not arising out of my employment (or its termination), that the Company may have against me or that I may have against the Company and any other related or affiliated entity or person, including but not limited to parent, subsidiary and affiliated companies and employees or agents of any of them.  I agree that no court or arbitrator shall determine any of my rights or claims on a class, collective or representative basis under any federal, state or local law.  I understand, however, that I retain the right to bring claims in arbitration for myself as an individual.
Except as provided in the section titled “Claims Not Covered by the Agreement”, all claims that, in the absence of this Agreement, could have been brought in court are subject to arbitration, whether the claims derive from common law, statute, regulation, or otherwise, including but not limited to tort claims, contract claims, claims for wages, and claims for discrimination, retaliation and/or harassment.  Except as otherwise provided in this Agreement, both the Company and I agree that neither of us shall initiate or prosecute any lawsuit in any way related to any claim covered by this Agreement, other than a lawsuit seeking temporary equitable relief in aid of arbitration.
Except as provided in this Agreement, the Federal Arbitration Act shall govern the interpretation, enforcement and all proceedings pursuant to this Agreement.  
Claims Not Covered by the Agreement
The following claims are not covered by this Agreement:  claims that as a matter of law cannot be subject to arbitration; claims under an employee benefit or pension plan that specifies a different arbitration procedure; and claims asserted in an existing dispute in which both: (i) I currently am represented by legal counsel, and (ii) counsel has asserted such claims on my behalf.
Arbitration Procedures
     The arbitration will be held under the auspices of Judicial Arbitration & Mediation Services (“J•A•M•S”), in Las Vegas, Nevada.  The Company and I agree that, except as provided in this Agreement, the arbitration shall be held in accordance with its then-current Employment Arbitration Rules & Procedures (and no other J•A•M•S rules), which are currently available at http://www.jamsadr.com/rules-employment-arbitration.  I understand that, upon request, the Company will supply me with a copy of the J•A•M•S 

	
			
	 
	B-1
	 

	Executive
	 
	Company

rules.  The Arbitrator shall apply the substantive law (and the law of remedies, if applicable) of the state in which the claim arose, or federal law, or both, as applicable to the claim(s) asserted.  The Arbitrator is without jurisdiction to apply any different substantive law or law of remedies.  In connection with each arbitration hereunder, the arbitrators shall be bound by the terms of the applicable contracts and the applicable law in making their determinations and shall have no power to vary from the same.  In addition, if the issues being arbitrated include issues of law, the parties agree that the arbitrators shall be lawyers.   
The Company will be responsible for paying any filing fee and the fees and costs of the Arbitrator; provided, however, that if I am the party initiating the claim, I will contribute an amount equal to the filing fee to initiate a claim in the court of general jurisdiction in the state in which I am (or was last) employed by the Company.  
Sole and Entire Agreement
This is the complete agreement of the parties on the subject of arbitration of disputes (except for any arbitration agreement in connection with any pension or benefit plan).  This Agreement supersedes any prior or contemporaneous oral or written understandings on the subject.  No party is relying on any representations, oral or written, on the subject of the effect, enforceability or meaning of this Agreement, except as specifically set forth in this Agreement.
Construction and Severability
If any provision of the section entitled “Claims Covered by the Agreement” is determined to be void or unenforceable, then this Agreement shall be of no force or effect, because the parties intended to create an agreement to arbitrate individual disputes only.  If any other provision of this Agreement is determined to be void or unenforceable, in whole or in part, it shall not affect the validity of the remainder of the Agreement.  All other provisions shall remain in full force and effect based on the parties’ mutual intent to create a binding agreement to arbitrate their disputes individually.
Costs of Arbitration  
The costs and expenses of the arbitration, including the arbitrator’s fees shall be paid by the non-prevailing party, as determined by the arbitrators as part of the Final Determination.  In the event the arbitrators are unable to identify the prevailing party as part of the Final Determination, the arbitrators shall allocate the costs and expenses of the arbitration, including the arbitrators’ fees, in their sole discretion.
Satisfaction of Award

	
			
	 
	B-2
	 

	Executive
	 
	Company

  If any party fails to pay the amount of the award, if any, assessed against it within thirty (30) calendar days of the delivery to such party of the Final Determination, the unpaid amount shall bear interest from the date of such delivery at the lesser of (i) the prime lending rate announced by Citibank N.A., plus three percent (3%) and (ii) the maximum rate permitted by applicable usury laws.  In addition, such party shall promptly reimburse the other party for any and all costs or expenses of any nature or kind whatsoever (including attorneys’ fees) incurred in seeking to collect such award or to enforce any Final Determination.
Confidentiality of Proceedings  
The parties hereto agree that all of the mediation and arbitration proceedings provided for herein, including any notice of claim, the Notice of Arbitration, the submissions of the parties, and the Final Determination issued by the arbitrators, shall be confidential and that no such party shall disclose such confidential information; provided, however, no party shall have an obligation hereunder to keep confidential any matter if and to the extent disclosure thereof is required by applicable law, regulation, court order, fiduciary duty, existing contractual obligation, or accounting rule or custom, as determined by legal counsel or accountants to such party, as applicable; provided, further, that this provision shall not prevent the party prevailing in the arbitration from submitting the Final Determination to a court for the purpose of enforcing the award, subject to comparable confidentiality provisions if the court agrees.
Voluntary Agreement
I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT; THAT I UNDERSTAND ITS TERMS; THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY AND ME RELATING TO THE SUBJECTS COVERED IN THE AGREEMENT ARE CONTAINED IN IT; AND THAT I HAVE ENTERED INTO THE AGREEMENT VOLUNTARILY AND NOT IN RELIANCE ON ANY PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER THAN THOSE CONTAINED IN THIS AGREEMENT ITSELF AND THE DOCUMENTS THAT ACCOMPANIED ITS DISTRIBUTION TO ME.
I UNDERSTAND THAT I AM GIVING UP MY RIGHT TO A JURY TRIAL.
I FURTHER ACKNOWLEDGE THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO DISCUSS THIS AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE AVAILED MYSELF OF THAT OPPORTUNITY TO THE EXTENT I WISH TO DO SO.

	
			
	 
	B-3
	 

	Executive
	 
	Company

	
		
	Date:  __________________________
	_________________________________

 
 
 

	
			
	 
	B-4
	 

	Executive
	 
	Company

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