Document:

exv10w2

Exhibit 10.2

Execution Copy

SECOND AMENDED AND RESTATED PURCHASE AGREEMENT

          This SECOND AMENDED AND RESTATED PURCHASE AGREEMENT (this “Agreement”), dated as of August 31,
2010, is by and among DIAMOND RESORTS FINANCE HOLDING COMPANY, a Delaware corporation (the
“Seller”), and DIAMOND RESORTS DEPOSITOR 2008 LLC, a Delaware limited liability company (the
“Depositor”), and their respective permitted successors and assigns, and hereby amends and restates
in its entirety that certain amended and restated purchase agreement, dated as of July 16, 2010
(the “A/R Purchase Agreement”), among the parties thereto, which amended and restated in its
entirety that certain purchase agreement, dated as of November 3, 2008 (the “Original Purchase
Agreement”), among the parties thereto.

W I T N E S S E T H:

          WHEREAS, the parties hereto desire to amend and restate in its entirety the A/R Purchase
Agreement as provided herein, and all actions required to do so under the A/R Purchase Agreement
have been taken;

          WHEREAS, pursuant to the A/R Purchase Agreement, the Seller had sold and Depositor had
purchased Timeshare Loans and from time to time, in accordance with the terms hereof;

          WHEREAS, pursuant to the terms hereof, the Seller will sell and the Depositor will purchase
Timeshare Loans;

          WHEREAS, pursuant to the terms hereof, the Seller may, and in certain circumstances, will be
required to, provide Qualified Substitute Timeshare Loans for Timeshare Loans previously sold to
the Depositor hereunder (including, for the avoidance of doubt, Timeshare Loans sold to the
Depositor under the Original Purchase Agreement);

          NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and for other
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto covenant and agree as follows:

          SECTION 1. Definitions; Interpretation. Capitalized terms used but not defined herein
shall have the meanings specified in the Third Amended and Restated Standard Definitions (the
“Standard Definitions”) attached as Annex A to that certain third amended and restated indenture,
dated as of August 31, 2010, by and among Diamond Resorts Issuer 2008 LLC as issuer, Diamond
Resorts Financial Services, Inc. as servicer, Credit Suisse AG, Cayman Islands Branch as agent and
Wells Fargo Bank, National Association as indenture trustee, custodian and back-up servicer (the
“Indenture”). To the extent that the Standard Definitions attached to the Indenture are further
amended from time to time in accordance with the terms of the Indenture, such amended Standard
Definitions shall apply to and be incorporated in this Agreement by reference as though attached
hereto.

          SECTION 2. Acquisition of Timeshare Loans.

1

 

          (a) Timeshare Loans. On each Funding Date or Transfer Date, as the case may be, in
return for the Timeshare Loan Acquisition Price for each Timeshare Loan to be sold on such Funding
Date, the Seller does hereby sell, transfer, assign and grant to the Depositor, without recourse
(except as provided in Section 6 and Section 8 hereof), all of the Seller’s right, title and
interest in and to: (i) each Timeshare Loan listed on the related Borrowing Notice, (ii) the
Receivables in respect of such Timeshare Loans due after the related Cut-Off Date, (iii) the
related Timeshare Loan Documents, (iv) all Related Security in respect of each such Timeshare Loan,
(v) the rights and remedies of the Seller under the distribution and assignment agreements,
contribution and assignment agreements and such other assignments, bills of sale and other transfer
documents executed and delivered in connection with the sale and transfer of such Timeshare Loans,
and (vi) all income, payments, proceeds and other benefits and rights related to any of the
foregoing (the property described in the foregoing clauses (i) through (vi) being referred to as
the “Conveyed Timeshare Property”). Upon such sale, the ownership of each such Timeshare Loan and
all collections allocable to principal and interest thereon due after the related Cut-Off Date and
all other property interests or rights conveyed pursuant to and referenced in this Section 2(a)
shall immediately vest in the Depositor, its successors and assigns. The Seller shall not take any
action inconsistent with such ownership nor claim any ownership interest in any Timeshare Loan for
any purpose whatsoever other than for consolidated financial and federal and state income tax
reporting.

          (b) Delivery of Timeshare Loan Documents. In connection with the sale, transfer,
assignment and conveyance of the Timeshare Loans hereunder, the Depositor hereby directs the Seller
and the Seller hereby agrees to deliver or cause to be delivered, at least five Business Days prior
to each Funding Date or Transfer Date, as the case may be, to the Custodian or the In-Transit
Custodian, as the case may be, all related Timeshare Loan Files and to the Servicer all related
Timeshare Loan Servicing Files.

          (c) Collections. The Seller shall deposit or cause to be deposited all collections in
respect of Timeshare Loans conveyed hereunder that are received by it on or after the related
Cut-Off Date in the Collection Account.

          (d) No Further Obligations. Based on the Seller’s representation and warranty in
clause (oo) of Schedule I, neither the Depositor nor any subsequent assignee of the Depositor shall
have any obligation or liability with respect to any Timeshare Loan nor shall the Depositor or any
subsequent assignee have any liability to any Obligor in respect of any Timeshare Loan. It is the
intention of the parties hereto that no such obligation or liability is being assumed by the
Depositor or any subsequent assignee herewith and any such obligation or liability is hereby
expressly disclaimed.

          SECTION 3. Intended Characterization; Grant of Security Interest. It is the intention
of the parties hereto that each transfer of Timeshare Loans to be made pursuant to the terms hereof
shall constitute a sale by the Seller to the Depositor and not a loan secured by such Timeshare
Loans. In the event, however, that a court of competent jurisdiction were to hold that any such
transfer constitutes a loan and not a sale, it is the intention of the parties hereto that (i) the
Seller shall be deemed to have Granted and does hereby Grant to the Depositor as of the date

2

 

hereof a first priority perfected security interest in all of the Seller’s right, title and
interest in, to and under, whether now owned or existing or hereafter acquired or arising, the
Conveyed Timeshare Property specified in Section 2 hereof and the proceeds thereof, and (ii) this
Agreement shall constitute a security agreement under applicable law. In the event of the
characterization of any such transfer as a loan, the amount of interest payable or paid with
respect to such loan under the terms of this Agreement shall be limited to an amount which shall
not exceed the maximum non-usurious rate of interest allowed by the applicable state law or any
applicable law of the United States permitting a higher maximum non-usurious rate that preempts
such applicable state law, which could lawfully be contracted for, charged or received (the
“Highest Lawful Rate”). In the event any payment of interest on any such loan exceeds the Highest
Lawful Rate, the parties hereto stipulate that: (a) to the extent possible given the term of such
loan, such excess amount previously paid or to be paid with respect to such loan be applied to
reduce the principal balance of such loan, and the provisions thereof immediately be deemed
reformed and the amounts thereafter collectible thereunder reduced, without the necessity of the
execution of any new document, so as to comply with the then applicable law, but so as to permit
the recovery of the fullest amount otherwise called for thereunder and (b) to the extent that the
reduction of the principal balance of, and the amounts collectible under, such loan and the
reformation of the provisions thereof described in the immediately preceding clause (a) is not
possible given the term of such loan, such excess amount will be deemed to have been paid with
respect to such loan as a result of an error and upon discovery of such error or upon notice
thereof by any party hereto such amount shall be refunded by the recipient thereof.

          The characterization of the Seller as “debtor” and the Depositor as “secured party” in any
financing statement required hereunder is solely for protective purposes and shall in no way be
construed as being contrary to the intent of the parties that this transaction be treated as a sale
to the Depositor of the Seller’s entire right, title and interest in and to the Conveyed Timeshare
Property.

          SECTION 4. Conditions Precedent to Acquisition of Timeshare Loans. The obligations of
the Depositor to purchase any Timeshare Loans hereunder shall be subject to the satisfaction of the
following conditions:

          (a) With respect to the Initial Funding Date, all representations and warranties of the Seller
contained in Section 5 hereof and all information provided in the Schedule of Timeshare Loans
attached hereto as Exhibit A shall be true and correct as of the Closing Date, and the Seller shall
have delivered to the Depositor an Officer’s Certificate to such effect.

          (b) With respect to each subsequent Funding Date and each Transfer Date, all representations
and warranties of the Seller contained in Section 5(a) hereof shall be true and correct on the
related Funding Date or Transfer Date, as the case may be, as if made on such date, and all
representations and warranties as to the Timeshare Loans contained in Section 5(b) and all
information provided in the Schedule of Timeshare Loans in respect of the Timeshare Loans
(including the Qualified Substitute Timeshare Loans conveyed on such Transfer Date) shall be true
and correct on the related Funding Date or Transfer Date, as the case may be.

3

 

          (c) On or prior to the Closing Date, a Funding Date or a Transfer Date, as the case may be,
the Seller shall have delivered or shall have caused the delivery of (i) in the case of Eligible
Timeshare Loans (other than Eligible In-Transit Loans) the related Timeshare Loan Files to the
Custodian and the Custodian shall have delivered a Trust Receipt therefor pursuant to the Custodial
Agreement, (ii) in the case of Eligible In-Transit Loans, the related Timeshare Loan Files to the
In-Transit Custodian, and the In-Transit Custodian shall have delivered an In-Transit Trust Receipt
therefor pursuant to the In-Transit Custodial Agreement, (iii) the Timeshare Loan Servicing Files
to the Servicer, (iv) an updated Schedule of Timeshare Loans to the Custodian, the Servicer, the
Depositor, the Indenture Trustee and the Agent, and (v) an updated Schedule of Eligible In-Transit
Loans to the In-Transit Custodian, the Servicer, the Depositor, the Indenture Trustee and the
Agent.

          (d) Each transfer, assignment, sale and grant shall be evidenced by a transfer certificate in
the form attached hereto as Exhibit B. The Seller shall have delivered or caused to be delivered
all other information theretofore required or reasonably requested by the Depositor to be delivered
by the Seller or performed or caused to be performed all other obligations required to be performed
as of the Closing Date, Funding Date or Transfer Date, as the case may be, including all filings,
recordings and/or registrations as may be necessary in the opinion of the Depositor to establish
and preserve the right, title and interest of the Depositor in the related Timeshare Loans.

          (e) On the related Funding Date, the Indenture shall be in full force and effect and no
Funding Termination Event shall have occurred and is continuing.

          (f) Each of the conditions precedent to a Borrowing under the Indenture and the Note Funding
Agreement shall have been satisfied.

          (g) Each Timeshare Loan conveyed on a Funding Date shall be an Eligible Timeshare Loan.

          (h) Each Qualified Substitute Timeshare Loan replacing a Timeshare Loan shall satisfy each of
the criteria specified in the definition of “Qualified Substitute Timeshare Loan” and each of the
conditions herein and in the Indenture for substitution of Timeshare Loans shall have been
satisfied.

          (i) The Seller shall have delivered such other certificates and opinions as shall be
reasonably requested by the Depositor or its assignee.

          SECTION 5. Representations and Warranties and Certain Covenants of the Seller.

          (a) The Seller represents and warrants to the Depositor as of the Amendment Closing Date and
on each Funding Date and Transfer Date (with respect to any Timeshare Loans or Qualified Substitute
Timeshare Loans transferred on such Funding Date or Transfer Date) as follows:

4

 

          (i) Due Incorporation; Valid Existence; Good Standing. The Seller is a corporation
duly organized and validly existing in good standing under the laws of the State of Delaware; and
is duly qualified to do business as a foreign company and in good standing under the laws of each
jurisdiction where the character of its property, the nature of its business or the performance of
its obligations under this Agreement makes such qualification necessary, except where the failure
to be so qualified will not have a material adverse effect on the business of the Seller or its
ability to perform its obligations under this Agreement or any other Transaction Document to which
it is a party or under the transactions contemplated hereunder or thereunder or the validity or
enforceability of any portion of the Conveyed Timeshare Property.

          (ii) Possession of Licenses, Certificates, Franchises and Permits. The Seller holds,
and at all times during the term of this Agreement will hold, all material licenses, certificates,
franchises and permits from all governmental authorities necessary for the conduct of its business,
and has received no notice of proceedings relating to the revocation of any such license,
certificate, franchise or permit, which singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially and adversely affect its ability to
perform its obligations under this Agreement or any other Transaction Document to which it is a
party or under the transactions contemplated hereunder or thereunder or the validity or
enforceability of the Conveyed Timeshare Property.

          (iii) Corporate Authority and Power. The Seller has, and at all times during the term
of this Agreement will have, all requisite corporate power and authority to own its properties, to
conduct its business, to execute and deliver this Agreement and all documents and transactions
contemplated hereunder and to perform all of its obligations under this Agreement and any other
Transaction Document to which it is a party or under the transactions contemplated hereunder or
thereunder. The Seller has all requisite corporate power and authority to acquire, own, transfer
and convey the Conveyed Timeshare Property to the Depositor.

          (iv) Authorization, Execution and Delivery; Valid and Binding. This Agreement and all
other Transaction Documents and instruments required or contemplated hereby to be executed and
delivered by the Seller have been duly authorized, executed and delivered by the Seller and,
assuming the due execution and delivery by, the other party or parties hereto and thereto,
constitute legal, valid and binding agreements enforceable against the Seller in accordance with
their respective terms subject, as to enforceability, to bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the enforceability of creditors’ rights generally
applicable in the event of the bankruptcy, insolvency, or reorganization of the Seller and to
general principles of equity, regardless of whether such enforceability shall be considered in a
proceeding in equity or at law. This Agreement constitutes a valid transfer of the Seller’s
interest in the Conveyed Timeshare Property to the Depositor or the valid creation of a first

5

 

priority perfected security interest in the Conveyed Timeshare Property in favor of the Depositor.

          (v) No Violation of Law, Rule, Regulation, etc. The execution, delivery and
performance by the Seller of this Agreement and any other Transaction Document to which the Seller
is a party do not and will not (A) violate any of the provisions of the certificate of
incorporation or by-laws of the Seller, (B) violate any provision of any law, governmental rule or
regulation currently in effect applicable to the Seller or its properties or by which the Seller or
its properties may be bound or affected, including, without limitation, any bulk transfer laws, (C)
violate any judgment, decree, writ, injunction, award, determination or order currently in effect
applicable to the Seller or its properties or by which the Seller or its properties are bound or
affected, (D) conflict with, or result in a breach of, or constitute a default under, any of the
provisions of any indenture, mortgage, deed of trust, contract or other instrument to which the
Seller is a party or by which it is bound or (E) result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture, mortgage, deed of trust,
contract or other instrument.

          (vi) Governmental Consent. No consent, approval, order or authorization of, and no
filing with or notice to, any court or other Governmental Authority in respect of the Seller is
required which has not been obtained in connection with the authorization, execution, delivery or
performance by the Seller of this Agreement or any of the other Transaction Documents to which it
is a party or under the transactions contemplated hereunder or thereunder, including, without
limitation, the transfer of the Conveyed Timeshare Property and the creation of the security
interest of the Depositor therein pursuant to Section 3 hereof.

          (vii) Defaults. The Seller is not in default under any material agreement, contract,
instrument or indenture to which the Seller is a party or by which it or its properties is or are
bound, or with respect to any order of any court, administrative agency, arbitrator or governmental
body, in each case, which would have a material adverse effect on the transactions contemplated
hereunder or on the business, operations, financial condition or assets of the Seller, and no event
has occurred which with notice or lapse of time or both would constitute such a default with
respect to any such agreement, contract, instrument or indenture, or with respect to any such order
of any court, administrative agency, arbitrator or governmental body.

          (viii) No Material Adverse Effect. Since the end of Diamond Resorts Corporation’s most
recent, audited fiscal year, there has been no Material Adverse Effect with respect to any Diamond
Resorts Entity.

          (ix) Insolvency. The Seller will be solvent at all relevant times prior to, and will
not be rendered insolvent by, the transfer of the Conveyed Timeshare Property hereunder. On the
Amendment Closing Date, or a Funding

6

 

Date or a Transfer Date, as applicable, the Seller will not engage in any business or transaction
for which any property remaining with the Seller would constitute an unreasonably small amount of
capital.

          (x) Pending Litigation or Other Proceedings. There is no pending or, to the best of
the Seller’s knowledge, threatened action, suit, proceeding or investigation before any court,
administrative agency, arbitrator or governmental body against or affecting the Seller which, if
decided adversely, would materially and adversely affect (A) the condition (financial or
otherwise), business or operations of the Seller, (B) the ability of the Seller to perform its
obligations under, or the validity or enforceability of, this Agreement or any other Transaction
Document to which it is a party, (C) any of the Conveyed Timeshare Property or title of the Seller
to any of the Conveyed Timeshare Property, or (D) the Depositor’s or the Indenture Trustee’s
ability to foreclose or otherwise enforce its rights with respect to any of the Conveyed Timeshare
Property, including without limitation the right to revoke or otherwise terminate the Right-to-Use
Agreements and related Right-to-Use Interests, and the rights of the Obligors to use and occupy the
related Timeshare Interest.

          (xi) Information. No document, certificate or report furnished or required
to be furnished by or on behalf of the Seller pursuant to this Agreement, in its capacity as the
Seller, contains or will contain when furnished any untrue statement of a material fact or fails,
or will fail, to state a material fact necessary in order to make the statements contained therein
not misleading. There are no facts known to the Seller which, individually or in the aggregate,
materially adversely affect, or which (aside from general economic trends) may reasonably be
expected to materially adversely affect in the future, the financial condition or assets or
business of the Seller, or which may impair the ability of the Seller to perform its obligations
under this Agreement and any other Transaction Document to which it is a party, which have not been
disclosed herein or therein or in the certificates and other documents furnished to the Depositor
by or on behalf of the Seller pursuant hereto or thereto specifically for use in connection with
the transactions contemplated hereby or thereby.

          (xii) Foreign Tax Liability. The Seller is not aware of any Obligor under a Timeshare
Loan who has withheld any portion of payments due under such Timeshare Loan because of the
requirements of a foreign taxing authority, and no foreign taxing authority has contacted the
Seller concerning a withholding or other foreign tax liability.

          (xiii) Employee Benefit Plan Liability. As of the Amendment Closing Date and each
Funding Date and Transfer Date, as applicable, (i) no “accumulated funding deficiency” (as such
term is defined under ERISA and the Code), whether or not waived, exists with respect to any
“employee pension benefit plan” (as such term is defined under ERISA) sponsored, maintained or
contributed to by the Seller or any of its Affiliates with respect to any plan year beginning prior
to January 1, 2010, and, to the Seller’s knowledge, no event has

7

 

occurred or circumstance exists that may result in an accumulated funding deficiency as of the
last day of any plan year beginning prior to January 1, 2010; (ii) no unpaid “minimum required
contribution” (as such term is defined under ERISA and the Code), whether or not such funding
deficiency is waived, exists with respect to any employee pension benefit plan sponsored,
maintained or contributed to by the Seller or any of its Affiliates with respect to any plan year
beginning after December 31, 2009, and, to the Seller’s knowledge, no event has occurred or
circumstance exists that may result in an unpaid minimum required contribution as of the last day
of the plan year beginning after December 31, 2009 of any such plan; (iii) the Seller and each of
its Affiliates has made all contributions required under each multiemployer plan (as such term is
defined under ERISA) to which the Seller or any of its Affiliates contributes or in which the
Seller or any of its Affiliates participates (a “Seller Multiemployer Plan”); and (iv) neither the
Seller nor any of its Affiliates has withdrawn from any Seller Multiemployer Plan with respect to
which there is any outstanding liability and, to the Seller’s knowledge, no event has occurred or
circumstance exists that presents a risk of the occurrence of any withdrawal from, or the
partition, termination, reorganization or insolvency of, any Seller Multiemployer Plan that could
result in any liability to the Seller.

          (xiv) Taxes. The Seller has filed all tax returns (federal, state and local) which it
reasonably believes are required to be filed and has paid or made adequate provision for the
payment of all taxes, assessments and other governmental charges due from the Seller or is
contesting any such tax, assessment or other governmental charge in good faith through appropriate
proceedings or such failure will not have a material adverse effect on the rights and interests of
the Depositor. The Seller knows of no basis for any material additional tax assessment for any
fiscal year for which adequate reserves have not been established. The Seller intends to pay
all such taxes, assessments and governmental charges when due.

          (xv) Place of Business. The place of business where the Servicer on behalf of the
Seller keeps its records concerning the Timeshare Loans will be 10600 West Charleston Boulevard,
Las Vegas, Nevada 89135 (or such other place specified by the Seller by written notice to the
Depositor and the Indenture Trustee). The principal place of business and chief executive office of
the Seller is located at 10600 West Charleston Boulevard, Las Vegas, Nevada 89135 (or such other
place specified by the Seller by written notice to the Depositor and the Indenture Trustee).

          (xvi) Securities Laws. The Seller is not an “investment company” or a company
“controlled” by an “investment company” within the meaning of the Investment Company Act of 1940,
as amended. No portion of the Timeshare Loan Acquisition Price for each of the Timeshare Loans will
be used by the Seller to acquire any security in any transaction which is subject to Section 13 or
Section 14 of the Securities Exchange Act of 1934, as amended.

8

 

          (xvii) Ownership of the Seller. One hundred percent (100%) of the outstanding capital
stock of the Seller is directly owned (both beneficially and of record) by Diamond Resorts
Corporation, a Maryland corporation. Such capital stock is validly issued, fully paid and
nonassessable, and there are no options, warrants or other rights to acquire membership interests
from the Seller.

          (b) The Seller hereby: (i) represents and warrants that immediately prior to the transfer of
any Timeshare Loan to the Depositor, the Seller had full legal and equitable title to such
Timeshare Loan, free and clear of any liens and encumbrances, and (ii) makes the representations
and warranties contained in Schedule I hereto with respect to each Timeshare Loan, and certain
limited representations and warranties contained in
Schedule II hereto with respect to the Resorts,
such representations and warranties in both clauses (i) and (ii) for the benefit of the Depositor,
the Indenture Trustee for the benefit of the Noteholders and the Agent with respect to each
Timeshare Loan and certain Resorts as of the Closing Date, each Funding Date and each Transfer Date
(with respect to the Timeshare Loans and the Qualified Substitute Timeshare Loans transferred on
such Funding Date or Transfer Date), as applicable.

          (c) It is understood and agreed that the representations and warranties set forth in this
Section 5 shall survive the sale of any Conveyed Timeshare Property to the Depositor and any
assignment of such Conveyed Timeshare Property by the Depositor to the Indenture Trustee for the
benefit of the Noteholders and shall continue until the Notes are paid in full or otherwise
released or discharged. The Seller acknowledges that it has been advised that the Depositor intends
to assign all of its right, title and interest in and to the Conveyed Timeshare Property and its
rights and remedies under this Agreement to the Indenture Trustee for the benefit of the
Noteholders. The Seller agrees that, upon any such assignment, the Indenture Trustee may enforce
directly, without joinder of the Depositor (but subject to any defense that the Seller may have
under this Agreement) all rights and remedies hereunder.

          (d) With respect to any representations and warranties contained in Section 5(a) and Section
5(b) hereof, which are made to the Seller’s knowledge, if it is discovered that any representation
and warranty is inaccurate and such inaccuracy materially and adversely affects the value of a
Timeshare Loan or the interests of the Depositor or any assignee thereof, then notwithstanding the
Seller’s lack of knowledge of the accuracy of such representation and warranty at the time such
representation or warranty was made, such inaccuracy shall be deemed a breach of such
representation or warranty for purposes of the repurchase or substitution obligations described
herein.

          SECTION 6. Repurchases and Substitutions.

          (a) Mandatory Repurchase and Substitution for Breaches of Representations and Warranties.
Upon the receipt of notice by the Seller of a breach of any of the representations and warranties
in Section 5(a) or Section 5(b) hereof which materially and adversely affects the value of a
Timeshare Loan or the interests of the Depositor or any subsequent assignee of the Depositor
(including the Indenture Trustee for the benefit of the Noteholders) therein, the Seller shall
within 30 days of such notice,

9

 

cure in all material respects the circumstance or condition which has caused such representation or
warranty to be incorrect or either: (i) repurchase such Timeshare Loan at the Repurchase Price, or
(ii) substitute one or more Qualified Substitute Timeshare Loans for such Timeshare Loan and pay
the related Substitution Shortfall Amount, if any; provided, that to the extent an Amortization
Event has occurred and is continuing, the Seller shall use its best efforts to repurchase each
Timeshare Loan instead of replacing such Timeshare Loan.

          (b) Deliberately Omitted.

          (c) Deliberately Omitted.

          (d) Payment of Repurchase Prices and Substitution Shortfall Amounts. The Depositor
hereby directs and the Seller hereby agrees to remit all amounts in respect of Repurchase Prices
and Substitution Shortfall Amounts in immediately available funds to the Indenture Trustee. In the
event that more than one Timeshare Loan is substituted pursuant to Section 6(a) hereof on any
Transfer Date, the Substitution Shortfall Amounts and the Loan Balances of Qualified Substitute
Timeshare Loans shall be calculated on an aggregate basis for all substitutions made on such
Transfer Date.

          (e) Schedule of Timeshare Loans. The Depositor hereby directs, and the Seller hereby
agrees, on each date on which a Timeshare Loan has been repurchased, purchased or substituted, to
provide the Depositor and the Indenture Trustee with a revised Schedule of Timeshare Loans
reflecting the removal and/or substitution of such Timeshare Loans and subjecting any Qualified
Substitute Timeshare Loans to the provisions of this Agreement.

          (f) Officer’s Certificate for Qualified Substitute Timeshare Loans. The Seller shall,
on each Transfer Date, certify in writing to the Depositor and the Indenture Trustee that each new
Timeshare Loan meets all the criteria of the definition of “Qualified Substitute Timeshare Loan”
and that (i) the Timeshare Loan Files for such Qualified Substitute Timeshare Loans have been
delivered to the Custodian and (ii) the Timeshare Loan Servicing Files for such Qualified
Substitute Timeshare Loans have been delivered to the Servicer.

          (g) Release. In connection with any repurchase, purchase or substitution of one or
more Timeshare Loans contemplated by this Section 6, upon satisfaction of the conditions contained
in this Section 6, the Depositor shall execute and deliver such releases and instruments of
transfer or assignment presented to it by the Seller, in each case without recourse, as shall be
necessary to vest in the Seller the legal and beneficial ownership of such Timeshare Loans,
provided, however, that with respect to any release of a Timeshare Loan that is substituted by a
Qualified Substitute Timeshare Loan, the Depositor shall not execute and deliver or cause the
execution and delivery of such releases and instruments of transfer or assignment until the Agent
and the Servicer receive a Trust Receipt or an In-Transit Trust Receipt, as the case may be, for
such Qualified Substitute Timeshare Loan. The Depositor shall cause the Custodian or the In-Transit
Custodian, as the case may be, to release the related Timeshare Loan Files to the

10

 

Seller or its designee and the Servicer to release the related Timeshare Loan Servicing Files
to the Seller or its designee; provided, however, that with respect to any Timeshare Loan File or
Timeshare Loan Servicing File related to a Timeshare Loan that has been substituted by a Qualified
Substitute Timeshare Loan, the Depositor shall not cause the Custodian or the In-Transit Custodian,
as the case may be, and the Servicer to release the related Timeshare Loan File and the Timeshare
Loan Servicing File, respectively, until the Agent and the Servicer receive a Trust Receipt or an
In-Transit Trust Receipt, as the case may be, for such Qualified Substitute Timeshare Loan.

          (h) Sole Remedy. It is understood and agreed that the obligations of the Seller to
repurchase or substitute Timeshare Loans contained in Section 6(a) hereof and the obligation of the
Seller to indemnify pursuant to Section 8 hereof shall constitute the sole remedies for the
breaches of any representation or warranty contained in Section 5(a) or Section 5(b) hereof.

          SECTION 7. Additional Covenants of the Seller. The Seller hereby covenants and agrees
with the Depositor as follows:

          (a) The Seller shall comply in all material respects with all applicable laws, rules,
regulations and orders applicable to it and its business and properties.

          (b) The Seller shall preserve and maintain its existence (corporate or otherwise), rights,
franchises and privileges in the jurisdiction of its organization and, if applicable, all necessary
sales finance company licenses.

          (c) On or prior to each Funding Date or a Transfer Date, as applicable, the Seller shall
indicate in its computer files and other records that each Timeshare Loan has been sold to the
Depositor and subsequently pledged to the Indenture Trustee for the benefit of the Noteholders.

          (d) The Seller shall respond to any inquiries with respect to ownership of a Timeshare Loan by
stating that such Timeshare Loan has been sold to the Depositor and that the Depositor is the owner
of such Timeshare Loan and that such Timeshare Loan has been pledged to the Indenture Trustee for
the benefit of the Noteholders.

          (e) On or prior to the Amendment Closing Date, the Seller shall file or cause to be filed, at
its own expense, financing statements in favor of the Depositor with respect to the Conveyed
Timeshare Property meeting the requirements of state law in such manner and in such jurisdictions
as are necessary or appropriate to perfect the acquisition of the Conveyed Timeshare Property by
the Depositor from the Seller, and shall deliver file-stamped copies of such financing statements
to the Depositor and the Indenture Trustee for the benefit of the Noteholders.

          (f) The Seller agrees from time to time, at its expense, promptly to execute and deliver all
further instruments and documents, and to take all further actions, that may be necessary, or that
the Depositor may reasonably request, to perfect, protect or more fully evidence the sale of the
Timeshare Loans, or to enable the Depositor to

11

 

exercise and enforce its rights and remedies hereunder or under any Timeshare Loan including but
not limited to powers of attorney, Uniform Commercial Code financing statements and assignments of
Mortgage and Right-to-Use Agreements and Installment Sale Contracts. The Seller hereby appoints the
Depositor as attorney-in-fact, which appointment is coupled with an interest and is therefore
irrevocable, to act on behalf and in the name of the Seller to enforce obligations of the Seller
hereunder.

          (g) Any change in the legal name of the Seller and any use by it of any trade name, fictitious
name, assumed name or “doing business as” name occurring after the Closing Date shall be promptly
disclosed to the Depositor in writing.

          (h) Upon the discovery or receipt of notice of a breach of any of its representations or
warranties and covenants contained herein, the Seller shall promptly disclose to the Depositor, in
reasonable detail, the nature of such breach.

          (i) The Seller shall immediately transfer to the Depositor or its assignee, as applicable, any
payment it receives in respect of the Conveyed Timeshare Property.

          (j) In the event that the Seller or the Depositor or any assignee of the Depositor should
receive actual notice of any transfer taxes arising out of the transfer, assignment and conveyance
of any Conveyed Timeshare Property, on written demand by the Depositor, or upon the Seller
otherwise being given notice thereof, the Seller shall pay, and otherwise indemnify and hold the
Depositor and any of its assignees harmless, on an after-tax basis, from and against any and all
such transfer taxes.

          (k) The Seller will comply in all material respects with all applicable laws, rules,
regulations and orders and preserve and maintain its corporate existence, rights, franchises,
qualifications and privileges except to the extent that the failure so to comply with such laws,
rules and regulations or the failure so to preserve and maintain such existence, rights,
franchises, qualifications and privileges could not reasonably be expected to materially adversely
affect the collectibility of the Conveyed Timeshare Property or the ability of the Seller to
perform its obligations under this Agreement and any of the Transaction Documents to which it is a
party.

          (l) The Seller will keep its principal place of business and chief executive office and the
office where it keeps its records concerning the Obligor Notes at the address of the Seller listed
herein or, upon 30 days’ prior written notice to the Depositor and the Indenture Trustee, at any
other location in jurisdictions where all actions reasonably requested by the Depositor to protect
and perfect the interest in the Obligor Notes, Right-to-Use Agreements and Installment Sale
Contracts under the applicable Uniform Commercial Code have been taken and completed within 10 days
of such notice. The Seller also will maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records evidencing the Obligor Notes,
Right-to-Use Agreements and Installment Sale Contracts in the event of the destruction of the
originals thereof), and keep and maintain all documents, books, records and other information
reasonably necessary or advisable for the collection of all

12

 

(including, without limitation, records adequate to permit the daily identification of each
Obligor Note, Right-to-Use Agreement and Installment Sale Contract) and all payments made with
regard to the related Conveyed Timeshare Property prior to and on the Closing Date, each Funding
Date or each Transfer Date, as applicable.

          (m) The Seller shall authorize and file such continuation statements and any other documents
reasonably requested by the Depositor or which may be required by law to preserve and protect the
interest of the Depositor hereunder in and to the Conveyed Timeshare Property.

          (n) The Seller agrees from time to time, at its expense, promptly to execute and deliver all
further instruments and documents, and to take all further actions, that may be necessary, or that
the Depositor may reasonably request, to perfect, protect or more fully evidence the Conveyed
Timeshare Property, or to enable the Depositor to exercise and enforce its rights and remedies
hereunder or under any of the other Transaction Documents to which it is a party. The Seller has
delivered to the Custodian a Lost Note Affidavit in the form of Exhibit C hereto in each
instance where it is unable to provide a signed original Obligor Note, and the Depositor agrees
that such Lost Note Affidavit shall be sufficient to satisfy its obligations hereunder.

          (o) The Seller authorizes the Depositor to file continuation statements, and amendments
thereto, relating to the Conveyed Timeshare Property and all payments made with regard to the
Conveyed Timeshare Property without the signature of the Seller where permitted by law. A photocopy
or other reproduction of this Agreement shall be sufficient as a financing statement where
permitted by law. The Depositor confirms that it is not its present intention to file a photocopy
or other reproduction of this Agreement as a financing statement, but reserves the right to do so
if, in its good faith determination, there is at such time no reasonable alternative remaining to
it.

          (p) In the event that the Seller shall have received any insurance proceeds and such proceeds
are not payable to an Obligor, the Seller shall promptly remit such insurance proceeds to the
Indenture Trustee for deposit into the Collection Account.

          SECTION 8. Indemnification.

          (a) The Seller agrees to indemnify the Depositor, the Issuer, the Indenture Trustee, the
Noteholders, the Agent and the Purchasers (each an “Indemnified Party”, collectively, the
“Indemnified Parties”) against any and all claims, losses, liabilities, (including legal fees and
related costs) that such Indemnified Parties may sustain directly or indirectly related to (x) any
inaccuracy or breach of the representations and warranties of the Seller under Section 5 hereof and
(y) a failure by the Seller to perform any of its obligations under the Transaction Documents
(“Indemnified Amounts”) excluding, however: (i) Indemnified Amounts to the extent resulting from
the gross negligence or willful misconduct on the part of such Indemnified Party; (ii) any recourse
for any uncollectible Timeshare Loan not related to a breach of representation or warranty; (iii)
recourse to the Seller for a 60-Day Plus Delinquent Loan; (iv) Indemnified Amounts attributable to
any violation by an Indemnified Party of any requirement of law

13

 

related to an Indemnified Party; or (v) the operation or administration of the Indemnified
Party generally and not related to this Agreement. The Seller shall: (x) promptly notify the
Depositor and the Indenture Trustee if a claim is made by a third party with respect to this
Agreement or the Timeshare Loans, and relating to (i) the failure by the Seller to perform its
duties in accordance with the terms of this Agreement or (ii) a breach of the Seller’s
representations, covenants and warranties contained in this Agreement, and (y) assume (with the
consent of the related Indemnified Party, which consent shall not be unreasonably withheld) the
defense of any such claim and pay all expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment, order or decree which may be entered against it
or the related Indemnified Party in respect of such claim. If the Seller shall have made any
indemnity payment pursuant to this Section 8 and the recipient thereafter collects from another
Person any amount relating to the matters covered by the foregoing indemnity, the recipient shall
promptly repay such amount to the Seller.

          (b) The Seller agrees to pay, and to indemnify, defend and hold harmless the Depositor, the
Issuer, the Indenture Trustee, the Noteholders, the Agent and the Purchasers from, any taxes which
may at any time be asserted with respect to, and as of the date of, the transfer of the Conveyed
Timeshare Property to the Depositor hereunder and the further pledge by the Depositor to the
Issuer, including, without limitation, any sales, gross receipts, general corporation, personal
property, privilege or license taxes (but not including any federal, state or other taxes arising
out of the creation of the Depositor and the issuance of the Notes) and costs, expenses and
reasonable counsel fees in defending against the same, whether arising by reason of the acts to be
performed by the Seller under this Agreement or the Servicer under the Indenture or imposed against
the Depositor, the Issuer, a Noteholder or otherwise. Notwithstanding any other provision of this
Agreement, the obligation of the Seller under this Section 8(b) shall not terminate upon the
resignation or removal of the Servicer pursuant to the Indenture and shall survive any termination
of this Agreement.

          (c) The obligations of the Seller under this Section 8 to indemnify the Indemnified Parties
shall survive the termination of this Agreement and continue until the Notes are paid in full or
otherwise released or discharged.

          SECTION 9. No Proceedings. The Seller hereby agrees that it will not, directly or
indirectly, institute, or cause to be instituted, or join any Person in instituting, against the
Depositor or any Resort, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state bankruptcy or similar law so long as
there shall not have elapsed one year plus one day since the latest maturing Notes issued by the
Issuer.

          SECTION 10. Notices, Etc. All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing and mailed or telecommunicated, or delivered
as to each party hereto, at its address set forth under its name on the signature page hereof or at
such other address as shall be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall not be effective until received by the party to
whom such notice or communication is addressed. To the extent that any

14

 

Purchaser which the Agent has confirmed holds at least a 15% interest in the Notes shall give
written direction to any of the parties hereto that it wishes to directly receive copies of any
notices and other communications that the Agent is entitled to receive hereunder, the parties
hereto agree to comply with such direction.

          SECTION 11. No Waiver; Remedies. No failure on the part of the Seller, the Depositor
or any assignee thereof to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other right. The remedies herein provided
are cumulative and not exclusive of any other remedies provided by law.

          SECTION 12. Binding Effect; Assignability. This Agreement shall be binding upon and
inure to the benefit of the Seller, the Depositor and their respective successors and permitted
assigns. Any assignee shall be an express third party beneficiary of this Agreement, entitled
directly to enforce this Agreement. The Seller may not assign any of its rights and obligations
hereunder or any interest herein without the prior written consent of the Depositor and any of its
assignees. The Depositor may, and intends to, assign all of its rights hereunder to the Issuer and
the Seller consents to any such assignment. This Agreement shall create and constitute the
continuing obligations of the parties hereto in accordance with its terms, and shall remain in full
force and effect until its termination; provided, however, that the rights and remedies with
respect to any breach of any representation and warranty made by the Seller pursuant to Section 5
hereof and the repurchase or substitution and indemnification obligations shall be continuing and
shall survive any termination of this Agreement but such rights and remedies may be enforced only
by the Depositor.

          SECTION
13. Amendments; Consents and Waivers. No modification, amendment or waiver of,
or with respect to, any provision of this Agreement, and all other agreements, instruments and
documents delivered thereto, nor consent to any departure by the Seller from any of the terms or
conditions thereof shall be effective unless it shall be in writing and signed by each of the
parties hereto and the written consent of the Agent on behalf of the Required Purchasers is given
and, to the extent the Notes are rated, confirmation from the Rating Agencies that such action will
not result in a downgrade, withdrawal or qualification of any rating assigned to a Class of Notes.
The Depositor shall provide the Agent, the Indenture Trustee, the Noteholders and, to the extent
any Notes are rated, the Rating Agencies with such proposed modifications, amendments or waivers.
Any waiver or consent shall be effective only in the specific instance and for the purpose for
which given. No consent to or demand by the Seller in any case shall, in itself, entitle it to any
other consent or further notice or demand in similar or other circumstances. The Seller
acknowledges that in connection with the intended assignment by the Depositor of all of its right,
title and interest in and to the Conveyed Timeshare Property to the Issuer, the Issuer, as Issuer,
intends to issue the Notes, the proceeds of which will be used by the Issuer to purchase the
Timeshare Loans from the Depositor.

          SECTION 14. Severability. In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision or obligation,
shall not in any way be affected or impaired thereby in any other jurisdiction. Without limiting
the generality of the foregoing, in the event that a Governmental Authority determines that the

15

 

Depositor may not purchase or acquire the Conveyed Timeshare Property, the transactions
evidenced hereby shall constitute a loan and not a purchase and sale, notwithstanding the otherwise
applicable intent of the parties hereto, and the Seller shall be deemed to have granted to the
Depositor as of the date hereof, a first priority perfected security interest in all of the
Seller’s right, title and interest in, to and under, whether now owned or existing, or hereafter
acquired or arising, the Conveyed Timeshare Property and the related property as described in
Section 2 hereof.

          SECTION 15. GOVERNING LAW; CONSENT TO JURISDICTION.

          (A) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATION LAW OF
THE STATE OF NEW YORK).

          (B) THE SELLER AND THE DEPOSITOR HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS
OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN
IN NEW YORK CITY AND EACH WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT
ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO THE ADDRESS SET FORTH ON THE
SIGNATURE PAGE HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER THE SAME
SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. THE SELLER AND THE DEPOSITOR EACH
HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF
ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS
IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION 15 SHALL AFFECT THE RIGHT OF THE SELLER
OR THE DEPOSITOR TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF
ANY OF THEM TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER JURISDICTION.

          SECTION 16. Headings. The headings herein are for purposes of reference only and shall
not otherwise affect the meaning or interpretation of any provision hereof.

          SECTION 17. Execution in Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed shall be deemed to be an original
and both of which when taken together shall constitute one and the same agreement.

[Signatures on next page]

16

 

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

	 	 	 	 	 	 	 	 	 

	 	 	DIAMOND RESORTS FINANCE HOLDING 
COMPANY, as Seller	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ David F. Palmer	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: David F. Palmer	 	 
	 	 	 	 	Title: Executive Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Address:
	 	10600 West Charleston Boulevard	 	 
	 

	 	 	 	 	 	Las Vegas, Nevada 89135	 	 
	 

	 	 	 	Attention:
	 	General Counsel	 	 
	 

	 	 	 	Telephone:
	 	702-823-7560	 	 
	 

	 	 	 	Facsimile:
	 	702-765-8610	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	DIAMOND RESORTS DEPOSITOR 2008 LLC, 
as Depositor	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ David F. Palmer	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name: David F. Palmer	 	 
	 	 	 	 	Title: Executive Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Address:
	 	10600 West Charleston Boulevard	 	 
	 

	 	 	 	 	 	Las Vegas, Nevada 89135	 	 
	 

	 	 	 	Attention:
	 	General Counsel	 	 
	 

	 	 	 	Telephone:
	 	702-823-7560	 	 
	 

	 	 	 	Facsimile:
	 	702-765-8610	 	 

S-1

 

Schedule I

Representations and Warranties as to Timeshare Loans

     (a) All federal, state or local laws, rules or regulations, including, without limitation, those
relating to usury, truth-in-lending, real estate settlement procedure, land sales, the offer and
sale of securities, consumer credit protection and equal credit opportunity or disclosure,
applicable to the Timeshare Loan or the sale of the Timeshare Interest have been complied with in
all material respects such that any violation of any such law, rule or regulation would not impair
the collectibility of such Timeshare Loan. The applicable rescission period has expired.

     (b) Other than an Eligible In-Transit Loan, the Timeshare Loan has cleared escrow.

     (c) The related Obligor has not been released, in whole or in part, from any of its material
obligations in respect of the Timeshare Loan. The applicable Obligor Note, Right-to-Use Agreement
or Installment Sale Contract has not been satisfied, canceled, rescinded or subordinated, in whole
or in part, and no instrument has been executed that would effect any such satisfaction, release,
cancellation, subordination or rescission.

     (d) The sale of the Timeshare Interest has not been canceled by the applicable Obligor or any
Originator. Any statutory or other applicable cancellation or rescission period related to the sale
of the Timeshare Interest has expired. The Timeshare Interest purchased by the applicable Obligor
has not been surrendered in accordance with the terms of the relevant Purchase Contract.

     (e) Each of the related Mortgage, Purchase Contract, Installment Sale Contract, Installment Sale
Notice, Obligor Note or Right-to-Use Agreement, and each other document in the related Timeshare
Loan File is genuine and the legal, valid and binding obligation of the applicable Obligor, is
enforceable in accordance with its terms (except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, or other similar laws affecting the enforcement of
creditors’ rights generally and by general principles of equity, regardless of whether such
enforceability shall be considered in a proceeding in equity or at law), and is not subject to any
dispute, right of setoff, recoupment, counterclaim, or defense of any kind, whether arising out of
transactions concerning such Timeshare Loan or otherwise, and no such right has been asserted with
respect thereto.

     (f) Other than with respect to an Eligible In-Transit Loan, all of the related Timeshare Loan
Servicing Files for such Timeshare Loan have on or prior to the Funding Date (or the related
Transfer Date) been obtained by the Servicer and all the related Timeshare Loan Files are in the
possession of the Custodian, the Custodian has issued a Trust Receipt (as defined in the Custodial
Agreement) therefor and no Material Exceptions (as defined in the Custodial Agreement) have been
cited by the Custodian. With respect to an Eligible In-Transit Loan, all of the related Timeshare
Loan Servicing Files for such Timeshare Loan have on or prior to the Funding Date (or the related
Transfer Date) been obtained by the Servicer and all the related Timeshare Loan Files are in the
possession of the In-Transit Custodian, the In-Transit Custodian has issued an In-Transit Trust
Receipt (as defined in the In-Transit Custodial Agreement)

Purchase Agreement

Schedule I-1

 

therefor and no In-Transit Material Exceptions (as defined in the In-Transit Custodial Agreement)
have been cited by the In-Transit Custodian.

     (g) The related Obligor Note is payable in United States Dollars.

     (h) The related Obligor has no bona fide claim against any Originator or affiliate thereof, or any
defense, set off or counterclaim.

     (i) Such Timeshare Loan is not more than 30 days delinquent (without giving effect to any
applicable grace period) on any payment of principal or interest as of the related Cut-Off Date.

     (j) The aggregate amount owing from the related Obligor with respect to all Securitized Timeshare
Loans does not exceed $100,000 in the aggregate.

     (k) The related Obligor Note evidences a fully amortizing debt obligation, with fixed monthly
payments for a term not exceeding 180 months.

     (l) The related Obligor Note may be prepaid in full without penalty.

     (m) The related Obligor has been instructed to remit all payments to the Centralized Lockbox
Account or such other lockbox account(s) at Approved Financial Institutions that are subject to a
Deposit Account Control Agreement approved by the Agent.

     (n) The related Obligor is not (i) a Person (other than an individual) that is affiliated with or
employed by Diamond Resorts Corporation or any of its Affiliates, including the Servicer, or (ii) a
Governmental Authority.

     (o) [Reserved]

     (p) The applicable assignment of Mortgage, Installment Sale Contract, Installment Sale Notice, or
Right-to-Use Agreement and the endorsement of the related Obligor Note constitutes a duly executed,
legal, valid, binding and enforceable assignment or endorsement, as the case may be, of such
related Mortgage, related Installment Sale Contract, related Installment Sale Notice, related
Right-to-Use Agreement and related Obligor Note, and all monies due or to become due thereunder,
and all proceeds thereof.

     (q) All of the condominium and apartment units related to the Timeshare Loans in the Resorts are
located in buildings whose construction has been completed and certificate of occupancy has been
issued, in the manner required by applicable state and local laws.

     (r) In the case of an Obligor Note secured by a Mortgage or an Installment Sale Contract, the
related Timeshare Property constitutes a fee interest in real property at one of the Resorts. The
related Mortgage has been duly filed and recorded with all appropriate governmental authorities in
all jurisdictions in which such related Mortgage is required to be filed and recorded to create a
valid, binding and enforceable first Lien on the related Timeshare Property and such related
Mortgage creates a valid, binding and enforceable first Lien on the related Timeshare Property,
subject only to Permitted Liens; and the Seller, to the extent

Purchase Agreement

Schedule I-2

 

applicable, is in compliance with such Permitted Liens respecting the right to the use of such
related Timeshare Property. In the case of a Right-to-Use Agreement related to a Timeshare Loan,
the related Timeshare Property, if any, is an apartment or unit at a Resort and the related
Right-to-Use Agreement grants the related Obligor the right to use and occupy one or more
apartments or units at a Resort. The related Right-to-Use Agreement has been duly filed and
recorded with all appropriate governmental authorities in all jurisdictions in which such related
Right-to-Use Agreement is required to be filed and recorded to enable the Depositor and its assigns
to enforce the revocation and termination rights granted in the Right-to-Use Agreement. In the case
of an Installment Sale Contract, the related Installment Sale Notice has been recorded in the
appropriate jurisdiction to give notice that the holder of such Installment Sale Contract is
obligated to sell the Timeshare Interest upon completion of the Installment Sale Contract.

     (s) Immediately prior to any transfer contemplated pursuant to this Agreement of Timeshare Loans
from the Seller to the Depositor, the Seller will own full legal and equitable title to each such
Timeshare Loan, free and clear of any Lien or ownership interest in favor of any other Person. All
of the Seller’s right, title and interest in and to each such Timeshare Loan has been validly and
effectively transferred to the Seller pursuant to the Purchase Agreement. Immediately prior to any
transfer contemplated pursuant to this Agreement of Timeshare Loans from the Seller to the
Depositor, the Seller will own full legal and equitable title to each such Timeshare Loan, free and
clear of any Lien or ownership interest in favor of any other Person. All of the Seller’s right,
title and interest in and to each such Timeshare Loan has been validly and effectively transferred
to the Depositor pursuant to this Agreement.

     (t) The related Mortgage, Right-to-Use Agreement, Installment Sale Notice or Installment Sale
Contract, as the case may be, contains customary and enforceable provisions so as to render the
rights and remedies of the holder thereof adequate for the practical realization against the
related Timeshare Interest of the benefits of the security interests or other remedies intended to
be provided thereby, including by judicial foreclosure or other applicable remedies. There is no
exemption available to the related Obligor which would interfere with the mortgagee’s right to
foreclose such related Mortgage, if applicable, or the Transferee’s right to enforce its revocation
and termination rights under the related Right-to-Use Agreement other than that which may be
available under applicable bankruptcy, debt relief, homestead statutes or the Servicemembers Relief
Act or a similar, applicable law of the country in which a Resort is located if other than the
United States.

     (u) The Timeshare Loan is not and has not been secured by any collateral except the Lien of the
related Mortgage or Installment Sale Notice or rights and remedies in the related Right-to-Use
Agreement or Installment Sale Contract and Right-to-Use Interest, as the case may be.

     (v) Such Timeshare Loan, if secured by a Mortgage, is covered by a form of lender’s title insurance
policy or commitment issued by a title insurer qualified to do business in the jurisdiction where
the related Timeshare Property is located, insuring the applicable Originator and its successors
and assigns as to the first priority Lien of the related Mortgage in an amount equal to the Loan
Balance of such Timeshare Loan at origination. Such lender’s title insurance policy, if actually
issued, is in full force and effect. No claims have been made under such lender’s title insurance
policy, if any, and no prior holder of such Timeshare Loan, including the

Purchase Agreement

Schedule I-3

 

applicable Originator, has done or omitted to do anything which would impair the coverage of such
lender’s title insurance policy.

     (w) Interest is calculated on each Timeshare Loan on a simple interest basis.

     (x) The proceeds of each Timeshare Loan have been fully disbursed and no Timeshare Loan requires
any additional performance by any Person.

     (y) The terms of each Mortgage, Right-to-Use Agreement, Installment Sale Contract, Installment Sale
Notice and Obligor Note have not been modified in any material respect.

     (z) Each Timeshare Loan secured by a Mortgage or an Installment Sale Contract is principally and
directly secured by an interest in real property.

     (aa) Each Timeshare Loan secured by a Mortgage requires the Obligor to pay all taxes, insurance
premiums and maintenance costs with respect to the related Timeshare Property. Each Timeshare Loan
secured by a Right-to-Use Agreement or Installment Sale Contract requires the Obligor to pay all
maintenance costs with respect to the related Timeshare Property. There are no delinquent taxes,
ground rents, water charges, sewer rents, or assessments outstanding with respect to any of the
Timeshare Properties, nor any other material outstanding Liens affecting the Timeshare Properties,
other than Permitted Liens.

     (bb) No consent, approval, order or authorization of, and no filing with or notice to, any court or
governmental authority in respect of any Obligor is required which has not been obtained in
connection with the transfer of any Timeshare Loans to the Seller or the Depositor or in connection
with the pledge of any Timeshare Loans to the Indenture Trustee.

     (cc) No selection procedures reasonably believed by the Seller to be adverse to the Noteholders
were utilized in selecting any Timeshare Loans.

     (dd) Each Obligor Note constitutes an “instrument” under the Uniform Commercial Code of the
jurisdiction in which such Obligor Note will at all times be located. Each Timeshare Loan which is
not evidenced by an Obligor Note constitutes either “tangible chattel paper” or a “payment
intangible” within the meaning of the Uniform Commercial Code in which such tangible chattel paper
is located, in the case of tangible chattel paper, or within the meaning of the Uniform Commercial
Code of the State of Delaware in the case of a payment intangible. There is no more than one
original executed copy of each Obligor Note, each Right-to-Use Agreement or Installment Sale
Contract.

     (ee) A minimum down payment of 10% of the sale price of the Timeshare Interest securing such
Timeshare Loan has been duly paid, in cash (which cash down payment may, in the case of an Upgraded
Timeshare Loan, be represented by the difference between the sale price and principal payments on
such Timeshare Loan since its date of origination), by the related Obligor.

     (ff) The related Obligor has not previously had any portion of a scheduled payment delinquent for
more than 180 days on a Timeshare Loan.

Purchase Agreement

Schedule I-4

 

     (gg) The Timeshare Loan was originated in compliance with Underwriting Guidelines attached hereto
as Exhibit D (as such Underwriting Guidelines may be amended from time to time in the manner
provided for by the Transaction Documents).

     (hh) Such Timeshare Loan is not more than 30 or more days’ delinquent in making the first scheduled
payment, unless the applicable Obligor has thereafter made at least six consecutive monthly
payments on a timely basis.

     (ii) Such Timeshare Loan, when aggregated with all other Timeshare Loans transferred on the same date shall not cause the weighted average FICO score of the Obligors related to such Timeshare Loans to be less than 700.

     (jj) Such Timeshare Loan, when aggregated with all other Borrowing Base Loans shall not cause the weighted average FICO score of the related Obligors to be less than 675.

     (kk) The Local Counsel Opinion Requirement with respect to the related Resort or Collection has
been satisfied.

     (ll) With respect to any Right-to-Use Loan, all timeshare property and other real estate interests
which are identified as available for use by owners of Right-to-Use Interests is (i) titled in the
name of the Collection Trustee and is held in trust, free and clear of any Lien or ownership
interest in favor of any Person, (ii) is covered by a title insurance policy issued by a title
insurer qualified to do business in the jurisdiction where such timeshare property or other real
estate interest is located and (iii) is related to a Collection.

     (mm) With respect to any Right-to-Use Loan, none of the related Collection Developer, Collection
Trustee and/or Collection Association is in default under the related Collection Trust Agreement or
has caused the ratio of Points to available intervals or units to fall below required levels.

     (nn) With respect to an Installment Sale Contract, the related Local Counsel Opinion Requirement
has been satisfied.

     (oo) No holder of the Timeshare Loan has any existing or future obligations or liabilities with
respect to such Timeshare Loan or the related Obligor.

Purchase Agreement

Schedule I-5

 

Schedule II

Representations and Warranties as to Resorts

     (a) Timeshare Interests.

          (i) The sale, offering for sale and financing of Timeshare Interests (A) do not constitute the
sale, or the offering for sale, of securities subject to registration requirements of the
Securities Act or any state or foreign securities laws, (B) except to the extent that any such
violation(s), either individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect, do not violate Timeshare Laws or any other law of any state or
foreign country in which sales or solicitation of Timeshare Interests occur and (C) except to the
extent that any such violation(s), either individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, do not violate any consumer credit or usury laws
of any state or foreign country in which sales or solicitations of Timeshare Interests occur.
Except to the extent that any such failure(s), either individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, the Diamond Resorts Entities have
not failed to make or cause to be made any registrations or declarations with any Governmental
Authority necessary to the ownership of the Resorts or to the conduct of their business, including
laws and regulations applicable to their business and activities, the operation of the Resorts and
the sale, or offering for sale, of Timeshare Interests. Except to the extent that any such
noncompliance, either individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect, the Diamond Resorts Entities have, to the extent required by their
activities and businesses, complied with all laws and regulations applicable to their businesses
and activities.

          (ii) Schedule III (II(a)(ii)) hereto sets forth, with respect to each Resort, (A) the states and
countries in which Timeshare Interests with respect to such Resort are being sold or marketed, (B)
if such Resort is a Points Based Resort and (C) for each Points Based Resort, the trust or other
entity that is the owner of the real property rights with respect to such Resort. The applicable
Diamond Resorts Entity has filed in each jurisdiction in which such filing is a legal prerequisite
to the marketing of the Timeshare Interests therein all applicable documents with the appropriate
Governmental Authorities required to authorize the sale of Timeshare Interests in such
jurisdictions and has subjected each Resort to certain limitations, restrictions, conditions and
covenants as described in the timeshare declarations and as hereinafter set forth in accordance
with the provisions of any applicable laws, statutes or regulations (such laws, statutes or
regulations and all amendments, modifications or replacements thereof and successors thereto, and
all regulations and guidelines promulgated thereunder or with respect thereto, now or hereafter
enacted, being hereinafter collectively referred to as the “Timeshare Laws”), except for any
failure to make such filings or any failure to subject each Resort to certain limitations,
restrictions, conditions and covenants that could that are not reasonably be expected to have a
Material Adverse Effect. All material documents used in connection with the creation of the
Timeshare Interests, the sale of the Timeshare Interests and the operation of the Resort as a
timeshare resort, including, without limitation, the Declaration (as hereinafter defined), by-laws
and rules and regulations of the homeowner’s association, the management agreement, the form of
contract of sale and deeds, and all other documents used by the Diamond Resorts Entities in
connection with the sale of Timeshare Interests, and the operation of the Resort as a timeshare

Purchase Agreement

Schedule II-1

 

resort and the regulation, management and administration thereof comply with all Timeshare Laws,
except for any non-compliance that could not reasonably be expected to result in a Material Adverse
Effect. As used herein, the term “Declaration” means the declaration in furtherance of a plan for
subjecting the Resort to a timeshare form of ownership, which Declaration contains covenants,
restrictions, easements, charges and liens and including, without limitation, provisions regarding
the identification of Timeshare Interests and the common areas and the regulation and governance of
the real property comprising the Resort as a timeshare regime.

     (b) Timeshare Interest Exchange Network. The exchange system operated by Diamond Resorts
International Club, Inc. (f/k/a Club Sunterra, Inc.) (d/b/a THE Club) is being operated in
compliance with all applicable Timeshare Laws, except for any non-compliance that could not
reasonably be expected to result in a Material Adverse Effect. To the extent Diamond Resorts
Entities have entered into written agreements with Resort Condominiums International, LLC, Interval
International, Inc. or other exchange networks, such Diamond Resorts Entities are members and
participants pursuant to validly executed and enforceable written agreements in Resort Condominiums
International, LLC, and/or Interval International, Inc. and/or other exchange networks, as
applicable. Such Diamond Resorts Entities have paid all fees and other amounts due and owing under
such agreements and are not otherwise in default in any respect thereunder, except to the extent
that could not reasonably be expected to result in a Material Adverse Effect.

     (c) Common Areas. To the extent that Diamond Resorts Entities are obligated to construct common
areas and amenities, the common areas and amenities appurtenant to sold Timeshare Interests, and
the streets and other off-site improvements contained within the projects, have been completed or a
bond insuring the completion thereof has been obtained, except to the extent that such failure to
complete or post a bond is not reasonably likely to have a Material Adverse Effect, and such
interests in such common areas are free and clear of all Liens except Permitted Liens.

     (d) Homeowners’ Association, Maintenance Fees and Developer Subsidies. All homeowners’ association,
maintenance fees and/or developer subsidies, as applicable, required to be paid by any Diamond
Resorts Entity and which are past due have been paid, except to the extent that such past due fees
do not exceed $3,000,000 in the aggregate.

     (e) Condemnation. No condemnation or other proceeding in the nature of eminent domain has been
commenced or, to any Diamond Resorts Entity’s best knowledge, is threatened or contemplated with
respect to all or any portion of any Resort or for the relocation of roadways providing access to
any Resort.

     (f) Utilities and Public Access. Each Resort has rights of access to public ways and is served by
water, sewer, sanitary sewer and storm drain facilities adequate to service such Resort for its
respective intended uses. All public utilities necessary to the full use and enjoyment of each
Resort for are located either in the public right-of-way abutting such Resort (which are connected
so as to serve such Resort without passing over the property) or in recorded easements serving such
Resort for its current purposes have been completed and dedicated to public use and accepted by all
Governmental Authorities.

Purchase Agreement

Schedule II-2

 

     (g) Use of Property. Each Resort is used exclusively as a timeshare resort, hotel and/or other
appurtenant and related uses.

     (h) Certificate of Occupancy; Licenses. All material certifications, permits, licenses and
approvals, including without limitation, certificates of completion and occupancy permits required
for the legal use, occupancy and operation of each Resort as a timeshare resort or hotel
(collectively, the “Licenses”), have been obtained and are in full force and effect. Each
applicable Diamond Resorts Entity shall keep and maintain all Licenses necessary for the operation
of each Resort as a timeshare resort. The use being made of each Resort is in conformity with the
certificate of occupancy issued for such Resort.

     (i) Flood Zone. None of the improvements on any Resort are located in an area as identified by the
Federal Emergency Management Agency as an area having special flood hazards or, if so located,
flood insurance in commercially reasonable amounts is in full force and effect with respect to each
Resort.

     (j) Physical Condition. Except as set forth on Schedule III (II-(j)), each Resort, including,
without limitation, all buildings, improvements, parking facilities, sidewalks, storm drainage
systems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems,
equipment, elevators, exterior sidings and doors, landscaping, irrigation systems and all
structural components, are in good condition, order and repair in all material respects; there
exists on the Closing Date or any Transfer Date no structural or other material defects or damages
in any Resort, whether latent (to the knowledge of the Diamond Resorts Entities or otherwise; and
no Diamond Resorts Entity has received on the Closing Date or any Transfer Date notice from any
insurance company or bonding company of any defects or inadequacies in any Resort, or any part
hereof, which would materially adversely affect the insurability of the same or cause the
imposition of extraordinary premiums or charges thereon or of any termination or threatened
termination of any policy of insurance or bond.

     (k) Boundaries. All of the improvements which were included in determining the appraised value of
each Resort lie wholly within the boundaries and building restriction lines of such Resort, and no
improvements on adjoining properties encroach upon such Resort, and no easements or other
encumbrances upon the applicable Resort encroach upon any of the improvements, so as to affect the
value or marketability of the applicable Resort except those which are insured against by a title
insurance policy.

     (l) Filing and Recording Taxes. All transfer taxes, deed stamps, intangible taxes or other amounts
in the nature of transfer taxes required to be paid by any Person under applicable legal
requirements currently in effect in connection with the transfer of any Timeshare Property to the
applicable Obligor have been paid.

     (m) Illegal Activity. No portion of any Timeshare Property has been or will be purchased with
proceeds of any illegal activity.

     (n) Embargoed Person. None of the funds or other assets of any Diamond Resorts Entity constitute
property of, or are beneficially owned, directly or indirectly, by any Person subject to trade
restrictions under U.S. law, including, but not limited to, the International

Purchase Agreement

Schedule II-3

 

Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C.
App. I et seq., and any executive orders or regulations promulgated thereunder with the result that
the investment in any Diamond Resorts Entity (whether directly or indirectly), is prohibited by law
or the Notes issued by the Issuer are in violation of law (“Embargoed Person”). No Embargoed Person
has any interest of any nature whatsoever in any Diamond Resorts Entity with the result that the
investment in any Diamond Resorts Entity (whether directly or indirectly), is prohibited by law or
are in violation of law. None of the funds of any Diamond Resorts Entity have been derived from any
unlawful activity with the result that the investment in any Diamond Resorts Entity (whether
directly or indirectly), is prohibited by law or is in violation of law.

     (o) Management Agreements. Each Resort Association which a Diamond Resorts Entity or its Affiliate
currently manages was duly organized and is validly existing. Each agreement to which a Diamond
Resorts Entity or an Affiliate thereof is a party, pursuant to which management services are
currently being performed with respect to a Resort (each, a “Management Agreement”), is in full
force and effect. The applicable Diamond Resorts Entity or an Affiliate thereof has performed in
all material respects all of its obligations under each such Management Agreement.

     (p) Insurance. Each Resort which is currently managed by a Diamond Resorts Entity or an Affiliate
thereof is insured through the applicable Resort Association if there is one, and if not, through a
Diamond Resorts Entity, in the event of fire or other casualty for the full replacement value
thereof, and in the event that the Timeshare Properties should suffer any loss covered by casualty
or other insurance, upon receipt of any Insurance Proceeds, the Associations, or a Diamond Resorts
Entity, are required, during the time such Timeshare Properties are covered by such insurance,
under the applicable governing instruments either to repair or rebuild the portions of the
applicable Resorts or to pay such proceeds to the holders of any Mortgages secured by a timeshare
estate in the portions of the applicable Resorts. Each Resort in the United States which is
currently managed by a Diamond Resorts Entity or an Affiliate thereof and which is located in a
designated flood plain maintains flood insurance in an amount not less than the maximum level
available under the National Flood Insurance Program.

     (q) Litigation. No action, suit, proceeding or investigation is pending or, to the best of the
knowledge of any Representing Party, threatened against any Resort Association or any Resort which
is currently managed by a Diamond Resorts Entity or an Affiliate thereof that, if adversely
determined, would have a material adverse impact on the Resorts, the Timeshare Property or the
value of the Notes.

Purchase Agreement

Schedule II-4

 

Schedule III (II(a)(ii))

Marketing By States and Countries

	 	 	 	 	 	 	 
	 	 	 	 	Point Based	 	If Points Based, Owner of
	Name of Resort	 	Location of Salesl,2,3	 	Resort?	 	Real Property Rights
	Bent Creek Golf Village

	 	Sevier County, TN; DRUSC locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	Cypress Pointe I

	 	Orange County, FL;
DRUSC locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	Cypress Pointe II

	 	Orange County, FL;
DRUSC locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	Daytona Beach Regency

	 	Volusia County;
DRUSC locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	Desert Paradise

	 	Clark County, NV;
DRUSC locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	Flamingo Beach Resort &
Villas

	 	No on-site sales;
DRUSC locations
	 	Yes
	 	First National Trustee
Company (UK) Ltd., as
Trustee through its
subsidiary, Saint Maarten
Title Limited
	 
	 	 	 	 	 	 
	Grand Beach I

	 	Orange County, FL;
DRUSC locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	Grand Beach II

	 	Orange County, FL;
DRUSC locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	Greensprings Vacation
Resort

	 	James City County, VA;
DRUSC locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	The Historic Powhatan
Resort

	 	James City County, VA;
DRUSC locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	Island Links

	 	No on-site sales;
DRUSC locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	Ka’anapali Beach

	 	Maui, HI;
DRHC locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee

Schedule III-1

 

	 	 	 	 	 	 	 
	 	 	 	 	Point Based	 	If Points Based, Owner of
	Name of Resort	 	Location of Salesl,2,3	 	Resort?	 	Real Property Rights
	Lake Tahoe

	 	El Dorado County, CA;
DRUSC and DRCC
locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	London Bridge Resort

	 	No on-site sales;
DRUSC locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	Marquis Villas Resort

	 	No sales at this time
	 	No
	 	NA
	 
	 	 	 	 	 	 
	The Point at Poipu

	 	Kauai, HI; DRHC locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	Polo Towers Suites

	 	Clark County, Nevada;
DRUSC and DRCC
Locations4
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	Polynesian Isles

	 	No on-site sales; DRUSC
Locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	The Ridge on Sedona
Golf

	 	Yavapai County, AZ;
DRUSC locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	Ridge Pointe

	 	No on-site sales; DRUSC
Locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	Royal Dunes at Port
Royal

	 	No sales at this time
	 	No
	 	NA
	 
	 	 	 	 	 	 
	Royal Palm Beach

	 	No on-site sales;
DRUSC locations
	 	Yes
	 	First National Trustee
Company (UK) Ltd., as
Trustee through its
subsidiary, Saint Maarten
Title Limited
	 
	 	 	 	 	 	 
	San Luis Bay Inn

	 	San Luis Obispo County,
CA; DRUSC and DRCC
locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	Scottsdale Links Resort

	 	Maricopa County, AZ;
DRUSC locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	Scottsdale Villa Mirage

	 	No on-site sales; DRUSC
locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee

Schedule III-2

 

	 	 	 	 	 	 	 
	 	 	 	 	Point Based	 	If Points Based, Owner of
	Name of Resort	 	Location of Salesl,2,3	 	Resort?	 	Real Property Rights
	Sedona Springs

	 	No on-site sales;
DRUSC locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	Sedona Summit

	 	Yavapai County, AZ;
DRUSC and DRHC
locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	The Suites at Fall Creek

	 	Taney County, MO;
DRUSC locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	Tahoe Beach & Ski Club

	 	No on-site sales; DRCC
Locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	Villas at Poco Diablo

	 	No on-site sales;
DRUSC locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee
	 
	 	 	 	 	 	 
	Villas at Polo Towers

	 	Clark County, NV;
DRUSC and DRHC
locations4
	 	Yes
	 	First American Trust,
FSB, as Trustee
	 
	 	 	 	 	 	 
	Villas de Santa Fe

	 	No on-site sales; DRUSC
locations
	 	Yes
	 	First American Trust,
FSB, as Trustee
	 
	 	 	 	 	 	 
	Villas of Sedona

	 	No on-site sales; DRUSC
locations
	 	Yes
	 	First American Trust,
FSB,
as Trustee

 

			
	1	 	Diamond Resorts U.S. Collection (“DRUSC”) memberships are currently sold at sales
centers located in the following states: Arizona, California, Florida, Missouri, Nevada, Tennessee,
and Virginia (collectively referred to as “DRUSC locations”). DRUSC is registered, or exempt from
registration or other regulations, to market or sell memberships in the following states: Alabama,
Alaska, Arkansas, Arizona, California, Colorado, District of Columbia, Florida, Georgia, Illinois,
Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri,
Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island,
South Carolina, Tennessee, Texas, Utah, Virginia, Vermont, Washington, Wisconsin, and Wyoming.
	 
	2	 	Diamond Resorts Hawaii Collection (“DRHC”) memberships are currently sold at sales
centers located in the following states: Hawaii (collectively referred to as “DRHC locations”).
DRHC is registered, or exempt from registration or other regulations, to market or sell memberships
in the following states: Alaska, Arizona, California, Georgia, Hawaii, Kansas, Michigan, Nevada,
North Carolina, Texas, Vermont, Wisconsin, and Wyoming.
	 
	3	 	Diamond Resorts California Collection (“DRCC”) memberships are currently sold at sales
centers located in the following states: California (collectively referred to as “DRCC locations”).
DRCC is registered, or exempt from registration or other

Schedule III-3

 

			
	 	 	regulations, to market or sell memberships in the following states: Alaska, California, Georgia,
Kansas, Michigan, North Carolina, Vermont, Washington, Wisconsin and Wyoming.
	 
	4	 	This timeshare plan is registered for sale in Nevada, and some intervals are held by
Diamond Resorts Polo Development, LLC

Schedule III-4

 

Schedule III (II(j))

Physical Condition

	1.	 	The Developer was not the developer of the Poipu Point condominium (completed in
1993); the Ka’anapali Beach Vacation Resort (completed in 1988); The Villas at Polo Towers
(completed in 2006) or Sedona Summit Resort (completed in 2007). As a result, the Association
does not hold any warranties, express or implied, on the Collection accommodations or the
component sites. The resort interests were conveyed to the Trustee “as is.”
	 
	2.	 	Ka’anapali Beach Resort
	 
	 	 	A lawsuit alleging a construction defect by the manufacturer of the rooftop space frame
was filed by the Company or one or more of its affiliates (the “Developer”) in its pursuit
to help the association in the matter of determining whether there are any grounds to seek
relief against the manufacturer of said space frame. Settlement in the amount of $2.465MM
has been reached with the three defendants and the case has been dismissed.
	 
	 	 	Water intrusion issues have also been discovered around the resort, including the sealant
around the entire property, the driveway, porte-cochere and parking structure. The extent
of the damage, recommendations for repair and evaluation of financial responsibility are
currently being considered.
	 
	3.	 	The Point at Poipu
	 
	 	 	It has come to the attention of the Developer that the exterior walls of certain
buildings in the Poipu Point condominium have experienced damage due to water intrusion.
Exterior finishes are experiencing deterioration and distress in the form of delamination,
bulging, and separation of finishes as well as corrosion staining. There has been
significant corrosion of fasteners including screws for sheathing, as well as heavy gage
nuts and bolts for structural connections; corrosion of load path (Simpson) ties;
significant deterioration of underlying gypsum board sheathing due to water saturation; and
decay of wood structural members, primarily glulam members due to water saturation.
	 
	 	 	Investigation indicates all 10 buildings in the Project are affected. The Board of
Directors of the condominium association for Poipu Point is conducting a study to determine
the scope and extent of the damage, and will make additional information available once it
is known. At that time, the condominium Board will also formulate recommendations and
determine what action will be necessary to remedy the damage. Costs will be incurred to
repair damage and to prevent further damage and there may be a

Schedule III-5

 

 

	 	 	special assessment to cover the costs of repair. The amount and nature of any such
assessment will be dependent upon the actual cost to be incurred to repair the damage and
what insurance, if any, may cover this damage. In terms of conducting repair work, it is
contemplated that any required repairs will be staggered so as not to materially impair the
operation of the Project. It is anticipated that repair schedules will occur in such a way
so as to minimize the impact of the ability of the owners to obtain a reservation.
	 
	4.	 	Lake Tahoe Vacation Resort
	 
	 	 	Numerous instances of improper installation or construction techniques by the contractor
have been discovered at Lake Tahoe Vacation Resort. These construction defects have resulted
or may result in some structural defects, including water intrusion in the roof and the
parking garage and in the bathrooms and exterior walls of a significant number of units at
the resort. In order to secure the correction of these defects, the Developer filed an
action against the contractor seeking repairs and in some instances replacement of physical
components of the resort and correction of the effects of any resulting defects and/or water
intrusion. This action settled for $25 million. A plan is currently being developed to make
the necessary repairs to the resort, which will take several years to complete. The use of
the affected units may be temporarily interrupted during the course of making the repairs.
	 
	5.	 	Palm Springs Marquis Villas
	 
	 	 	An unrelated party which is the holder of the master lease and use rights to sixty-three
(63) units at this resort has been in bankruptcy for some time. Diamond Resorts has entered
into a contract to purchase the bankrupt’s interest in this resort and, in the interim has
been managing the resort. The contract gave Diamond Resorts until October 22, 2008 to
receive approval of the Bureau of Indian Affairs for this acquisition. Since the contract
was not timely approved by the BIA, it is possible that either through the lack of funds or
default on the ground lease as a result of the bankruptcy, that Diamond Resorts will not be
able to fulfill reservation requests at the resort.
	 
	6.	 	Daytona Beach Regency Porte Cochere
	 
	 	 	The underside Ceiling of the Porte Cochere fell into the driveway in August 2008. This
ceiling had been repaired in 2004 after damage sustained during the 2004 Hurricanes. The
contractor has been put on notice, The Porte Cochere was demolished and removed as required
by the Fire Dept, at a cost of approx $150K. The estimated cost to replace is approx.
$450K. A claim has been filed with our insurance carrier.
	 
	7.	 	Scottsdale Links
	 
	 	 	There are currently eleven (11) units dedicated to Diamond Resorts U.S. Collection (f/k/a
Club Sunterra Vacations) that are actually not available for guest use and points being
sold against this inventory are not supported because these units are being utilized for
back office operations. In the meantime, Diamond Resorts U.S. Collection Development, LLC
(the “DRUSC”) has used developer space to accommodate owner requests and

Schedule III-6

 

 

	 	 	maintain the one-to-one property to points ratio required by law. DRUSC is currently
evaluating the situation.
	 
	8.	 	Desert Paradise
	 
	 	 	There are currently eight (8) units at Desert Paradise Resort that are dedicated to Diamond
Resorts U.S. Collection (f/k/a Club Sunterra Vacations) that are actually not available for
guest use and points being sold against this inventory are not supported because these
units are being utilized for back office operations. In the meantime, DRUSC has used
developer space to accommodate owner requests and maintain the one-to-one property to
points ratio required by law. DRUSC is currently evaluating the situation.
	 
	9.	 	Suites at Fall Creek 

Bank Erosion:
	 
	 	 	April 9th 2008, Heavy Rains caused Table Rock Lake to swell, forcing the Army Corp of
Engineers to open up all 10 flood gates of Table Rock Dam sending fast moving water down to
Lake Tanney Como. This resulted in high water levels and significant erosion of the banks
behind buildings 7-8.
	 
	 	 	On April 24th, additional storms created more high water and flood gates were opened again.
Extensive damage to the banks were noticed causing concern that there was insufficient
embankment left to properly support several large trees behind buildings 9-12, with these
trees possibly sliding down the embankment and in the process falling on the buildings.
Reservations for Buildings 9-12 were suspended pending the trees being removed. As the area
behind each building was cleared of trees, we inspected the embankment for stress marks,
and were able to reopen buildings 9-12 within 4 days. Buildings 7 and 8 remained offline.
The marina, dock and bait shop sustained heavy damage, and have been removed. The boats
were retrieved from the water prior to sustaining any damage.
	 
	 	 	The insurance carrier was put on notice and a claim filed. Both DRI and the underwriters
retained experts to determine the repair and remediation necessary to secure the buildings,
marina and embankment. To date the underwriters have funded the costs related to the
remediation and reconstruction the damage sustained. Building 8 was placed in service June
30th, 2009. Building 7 will be placed in service in June 2010 upon completion of
a scheduled refurbishment. The marina, dock and bait shop, should be complete by the second
quarter of 2010. While there are a lot of complex issues surrounding this claim, it is
expected that the claim will settle by third quarter 2010.
	 
	 	 	Stair Towers:
	 
	 	 	Building 21: The walkways on each floor of the building constructed with concrete over
wood. The wood is decaying causing the concrete to break down. The stair towers are
attached to the wood through the concrete and cannot be supported. Repairs are in process.

Schedule III-7

 

 

	10.	 	Polo Towers
	 
	 	 	As a result of a recent investigation into a cluster of Legionnaire’s disease cases, the
Southern Nevada Health District (“SNHD”) and the Centers for Disease Control and Prevention
(“CDC”) collected various samples of water and surfaces at Polo Towers. Legionella was found
in samples from 5 rooms. Upon receipt of this information, these rooms were closed until
further notice. SNHD required that a third party engineering firm be retained to survey the
Polo Towers water distribution facility, that an improved plan for control, monitoring and
prevention of Legionella be developed, and that appropriate communication be made to Polo
Towers staff, owners and guests. The 5 rooms have been put back into service. In a letter
dated September 15, 2009 from the SNHD, the SNHD closed its investigation. The Company fully
cooperated with SNHD in this matter.

Schedule III-8

 

 

Exhibit A 

Schedule of Timeshare Loans

(as updated from time to time, as required by the Purchase Agreement)

					
	 	 	 	 	 
	 
	 	
	 	Purchase Agreement

A-l

 

Exhibit B

Form of Timeshare Loan Transfer Certificate

TRANSFER OF TIMESHARE LOANS

PURSUANT TO

PURCHASE AGREEMENT

DIAMOND RESORTS DEPOSITOR 2008 LLC

     This TRANSFER OF TIMESHARE LOANS (this “Subsequent Transfer Certificate”),
dated                     , 200_, is acknowledged by Diamond Resorts Finance Holding
Company, a Delaware corporation (the “Seller”) and Diamond Resorts Depositor 2008 LLC, a Delaware
limited liability company (the “Depositor”). Capitalized terms not defined herein shall have the
meanings assigned to them in or incorporated by reference in that certain Second Amended and
Restated Purchase Agreement, dated as of August 31, 2010, by and between the Seller, as seller and
the Depositor, as purchaser (the “Purchase Agreement”).

     The Seller, concurrently with the execution and delivery hereof, does hereby sell, transfer,
assign and grant to the Depositor, pursuant to Section 2(a) of the Purchase Agreement, and the
Depositor does hereby purchase and accept such transfer, assignment and grant, all right, title and
interest of the Seller in and to (i) the Timeshare Loans listed on the Schedule of Timeshare Loans
attached as Exhibit A to the Purchase Agreement and amended in regard to the Subsequent Timeshare
Loans on the date hereof and (ii) the other Conveyed Timeshare Property related to such Timeshare
Loans.

     This Transfer Certificate sets forth the following additional terms applicable to the
Purchase Agreement in connection with this transfer of the Timeshare Loans:

     Section 1 Definitions

     “Transfer Date” means                    , 200_.

     “Cut-Off Date” means the close of business on                     , 200_.

     Section 2 Ratification of Agreement. As supplemented by this Transfer Certificate,
the Purchase Agreement is in all respects ratified and confirmed and, as so supplemented by this
Transfer Certificate, shall be read, taken and construed as one and the same instrument.

     Section 3 Governing Law. This Transfer Certificate shall be governed by, and
construed in accordance with, the laws of the State of New York (including, without limitation,
Section 5-1401 of the General Obligations Law).

B-1

 

     Section 4 Counterparts. This Transfer Certificate may be executed in
two counterpart copies, which copies taken together shall constitute one instrument.

[Signatures on next page]

B-2

 

     IN WITNESS WHEREOF, the Seller and the Depositor have caused this Transfer Certificate to be
duly executed by their respective officers thereto duly authorized as of the date and year first
above written.

SELLER:

DIAMOND RESORTS FINANCE HOLDING COMPANY

	 	 	 	 	 

	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 

Acknowledged and Agreed:

DEPOSITOR:

DIAMOND RESORTS DEPOSITOR 2008 LLC

	 	 	 	 	 

	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 

B-3

 

Exhibit C 

Form Of Lost Note Affidavit

STATE OF                     

COUNTY OF                     

                         (“Affiant”), on behalf of and as                      of Diamond
Resorts Finance Holding Company, a Delaware corporation (the “Seller”), being duly sworn, deposes
and says:

     1. This Lost Note Affidavit is being delivered by the Affiant pursuant to Section 7(n) of the
Second Amended and Restated Purchase Agreement (the “Agreement”), dated as of August 31, 2010 by
and between the Seller and Diamond Resorts Depositor 2008 LLC, a Delaware limited liability
company, as the purchaser. Unless otherwise defined herein, capitalized terms have the meanings
ascribed to such terms in the Agreement.

     2. That                                                              has issued an
[Obligor Note][Right-to-Use Agreement] [Installment Sale Contract] evidencing a Timeshare
Loan dated                      in the principal amount of $                     [(the
“Original Note”)] [(the “Original Agreement”)] [the “Original
Contract”) to                     .

     3. The [Original Note] [Original Agreement] [Original Contract] has been lost, destroyed,
or stolen so that it cannot be found or produced, and the Seller has not endorsed, assigned, sold,
pledged, hypothecated, negotiated or otherwise transferred the [Original Note][Original
Agreement] [Original Contract] or an interest therein.

     4. That the Seller has made a diligent effort to find the [Original Note][Original Agreement]
[Original Contract].

     5. It
is understood by the Seller that if the [Original Note] [Original Agreement] [Original Contract] is found, that it will surrender
said [Original Note][Original Agreement] [Original Contract] to the Custodian or its permitted successors and assigns
for cancellation.

                                                            

     The foregoing affidavit was sworn to and subscribed before me this            day of                     ,            ,
by                     , as                                          of Diamond
Resorts Finance Holding Company, who is personally known to me or who has produced                                          
 as identification and who did take an Oath.

	 	 	 

	 
	 	 
	 

	 	 
	 
	 	 
	(AFFIX NOTARIAL SEAL)

	 	Notary Public, State of                     
	 
	 	 
	 

	 	(Name)

Commission
Number:                                          My Commission Expires:

					
	 	 	 	 	 
	 
	 	
	 	Purchase Agreement

C-l

 

Exhibit D

Credit Underwriting

D-1

 

POLICY AND PROCEDURE

	 	 	 	 	 

	Subject:

	 	Credit Underwriting
	 	Procedure No.: DRFS-00006
	 
	 	 	 	 
	Scope:

	 	Sales, Contracts, Accounting,
	 	Revision Date: May 27, 2009
	 

	 	Controller, and other resort team	 	 
	 

	 	members	 	 
	 
	 	 	 	 
	Location:

	 	US Sales Centers / DRI Global
	 	Effective: July 31, 2000
	Headquarters
	 	 	 	 

PURPOSE:

This policy establishes guidelines for Credit Underwriting. Any changes to this policy
must be approved by the Chief Financial Officer.

POLICY:

	 	1)	 	It is the objective of DRFS’s (“company”) credit underwriting policy is to be fair
to all applicants and to evaluate all loan applications fairly based on the ability of
the applicant to repay the debt in a timely manner.
	 
	 	2)	 	It is the objective of our contracts and underwriting processes to:

	 	a.	 	produce loans that are conservatively underwritten with appropriate
down payments consistent with the underlying credit risk;
	 
	 	b.	 	operate independent of the sales process;
	 
	 	c.	 	efficiently produce loans free of collateral taints and conflicts; and
	 
	 	d.	 	produce loans in compliance with applicable laws and regulations.

	 	3)	 	Such objectives require a system of controls and checks and balances and will
generate assets with appropriate balance of risk and reward that will well serve all of
the Diamond Resorts constituents. The foregoing policy and processes must be applied
completely and consistently.
	 
	 	4)	 	Prohibition Against Discrimination:
	 
	 	 	 	It is the policy of Diamond Resorts to review each loan on a case-by-case basis, to
determine the creditworthiness of the applicant. In evaluating a credit application,
DRFS will review and consider information that has a demonstrable relationship to the
credit decision. The company shall not take into account or discriminate against any
applicant on a prohibited basis, including discrimination:

	 	a.	 	on the basis of race, color, religion, national origin, sex or marital
status, or age (provided the applicant has the capacity to contract);
	 
	 	b.	 	because all or part of the applicant’s income derives from any public assistance
program; or
	 
	 	c.	 	because the applicant has in good faith exercised any right under the
Consumer Credit Protection Act or any state law upon which an exemption has been
granted under said Act.

Page 1 of 6

 

	 	5)	 	Underwriting Process:
	 
	 	 	 	Diamond Resorts will review each loan application, taking into account the following guidelines
and requirements.

	 	a.	 	All new financed sales are subject to credit underwriting by DRFS.
	 
	 	b.	 	It is the responsibility of the sales site (Quality Assurance Officer or Sales manager)
to advise the customer that the loan request is subject to underwriting approval.
	 
	 	c.	 	The credit underwriting will be authorized by personnel in the DRFS Contracts
Department. (All persons authorized to make credit decisions on behalf of DRFS shall be
granted this authority by the National Contracts Manager.)
	 
	 	d.	 	DRFS management or their designee will approve every financed sale before a loan is
scheduled for escrow close. Such approval will include:

	 	1.	 	a complete and accurate contract that is in compliance with Diamond Resorts policy,
and
	 
	 	2.	 	a credit bureau report for all financed sales, including any transaction for existing
owners; or
	 
	 	3.	 	when a credit report is not available, a Credit Exception Form as described below

	 	 	 	Note: All exceptions will require documentation on a Credit Exception Form, which must
accompany the document file and require signature approval by the VP Client Services, National
Contracts Manager or the Director, Operations.
	 
	 	6)	 	Pender (sale status)

	 	a.	 	If DRFS denies approval of a financed sale, the Sales Center will be advised and the
contract may be returned for remediation. DRFS may classify the sale as a “pender” (see
separate policy), thus allowing up to 60 days for remediation. Sales will be provided 10
days notice prior to expiration of the 60 day “pender” period. Given expiration of the 60
day “pender” period with no resolution, DRFS will effect cancellation of the sale and
direct return of the escrow deposit to the customer
	 
	 	b.	 	Further, any related sales commissions will either be cancelled (if accrued and not
paid) or netted against future commissions (if already paid.)

	 	7)	 	Underwriting Criteria

	 	a.	 	Credit underwriting is performed by reviewing the completed credit application and the
credit bureau report and/or performance history with the company.
	 
	 	b.	 	All financed sales packages must include a completed credit application, signed by all
borrowing parties.
	 
	 	c.	 	A credit report is required for all financed sales, including existing owners.
	 
	 	d.	 	Existing owners

	 	a.	 	For upgrade or add-on transactions of existing owners, a credit report
will be required, although credit may be granted considering their performance
history with Diamond. In the case of an existing delinquency on an existing
Diamond Resorts loan, applicants will be required to resolve this delinquency by
making a separate payment to bring the loan current, i.e., such payment posted to
the account, before they may proceed with the new transaction.
	 
	 	b.	 	No credit score or lack of history requires a minimum 30% down payment.

	 	e.	 	When a credit report / risk score / credit history is not available, a Credit Exception
Form (see Exhibit 1) must be completed with the reason clearly stated as to why the credit
report / risk score / credit history is not available. Either the VP Client Services,
National Contracts Manager or the Director, Operations must provide signature authorization
for any and all exceptions per the Credit Exception Form. The credit report and/or Credit
Exception Form must be included as part of the credit file. A credit exception will not
delay the close of escrow.
	 
	 	f.	 	A minimum 30% down payment is required when no credit report is available.
	 
	 	g.	 	Minimum down payment (see Exhibit 2) in U.S. funds. Diamond Resorts employees or
independent contractors may not contribute to this down payment in any form. The source of
down payment must be the borrower(s). Should the down payment be contributed in whole or
in part by a third party not participating in the credit transaction, the monies must be
accompanied by a letter signed by that party indicating the money is a gift and is not
expected to be repaid.

Page 2 of 6

 

	 	h.	 	No bankruptcy within the previous 12 months period for both deeded inventory and trust
based sales.
More specifically, no approvals for pre-settlement cases; a post-settlement period of 12
months required
unless otherwise approved by the VP Client Services, National Contracts Manager or the
Director,
Operations.
	 
	 	i.	 	Judgments or liens on deeded property sales must be closed or meet the following
criteria:
	 
	 	j.	 	Civil judgments or open public record’s less than 10K will not require
exceptions.
	 
	 	k.	 	Tax liens less than 1K will not require exceptions

	 
	 	l.	 	All other civil
judgments, open public records or tax liens that do not meet this criteria must be approved
by the VP Client Services, National Contract Manager, or the Director of Operations.
	 
	 	m.	 	Civil judgments or liens on trust based sales shall not be a factor in extending credit
for applicant(s) that
otherwise qualifies in accordance with the current credit underwriting policy.

	8)	 	 Exceptions to Policy:
	 
	 	 	It is the expectation of DRFS that this policy will address the vast majority of sales
transactions. However, the company recognizes that this policy cannot address every situation
that is likely to arise in the purchase and lending process. Therefore, the company grants
total authority to the VP Client Services, National Contracts Manager or the Director of
Operations to grant exceptions to this policy on a discretionary basis. Each exception granted
shall be documented in 1) the credit file. Notwithstanding such exception authority, all
transactions must comply with applicable federal and state laws and regulations.

Page 3 of 6

 

REVISION HISTORY

	 	 	 	 	 	 	 
	Date	 	Revision #	 	Modification
	07/31/00

	 	1.0	 	 	New document
	01/19/01

	 	2.0	 	 	Revised
	03/14/01

	 	3.0	 	 	Revised
	03/29/01

	 	4.0	 	 	Revised
	03/30/01

	 	5.0	 	 	Revised
	06/01/01

	 	6.0	 	 	Revised
	08/27/01

	 	7.0	 	 	Revised
	06/01/02

	 	8.0	 	 	Revised
	07/19/02

	 	9.0	 	 	Revised (distributed August 7, 2002)
	01/27/03

	 	10.0	 	 	Revised
	07/11/03

	 	11.0	 	 	Revised
	01/02/04

	 	11.1	 	 	Revised to correct approval permissions
	07/23/04

	 	11.2	 	 	Revised paragraph for Exceptions to Policy
	04/25/05

	 	12.0	 	 	Revisions to interest rates- effective 5/2/05
	01/09/06

	 	13.0	 	 	Revised (effective 6/30/2006)
	04/17/07

	 	14.0	 	 	Added grey paper, adjusted titles
	06/14/07

	 	14.1	 	 	Revised Underwriting criteria: Item 7: Judgments and/or Liens for Deeded Property Sales
	06/14/07

	 	14.2	 	 	Added Underwriting criteria: Item 8: Judgments and/ or Liens Trust for Based Sales
	 
	 	 	 	 	 	 
	06/14/07

	 	14.3	 	 	Added new term — 50% down w/0% interest for 12 month term
	10/26/07

	 	14.5	 	 	Added new term — Tier 1 10% down 180 month term
	11/27/07

	 	14.6	 	 	Revised Tier 1 a/d rate to 14.9% — effective 12/1/07
	06/17/08

	 	14.7	 	 	Update to Diamond Template
	06/18/08

	 	14.8	 	 	Revised — removed 180 month term effective 6/21/08
	09/17/08

	 	14.9	 	 	Revised — Eliminated surepay discount —; Eliminated Grey Paper financing option
	 
	 	 	 	 	 	 
	04/08/09

	 	15.0	 	 	Revised — Tier 1 added 15% @ 16.9%; Tier 1-3 Existing Owners 15% @ 14.9%; 25% @ 13.9%;
added 84, 60 month terms to all options; Effective 4/8/09
	05/27/09

	 	15.1	 	 	Revised — Adjusted FICO limits for Tiers 1-7; Added grey paper for FICO <600;
Credit exceptions automatically place loan as grey paper regardless of FICO score.
Effective: 5/27/2009

Page 4 of 6

 

Exhibit 1

Diamond Resorts Financial Services, Inc.

Credit Exception Form

Resort:    
                
               
       Contract #      
              
       
             
  Sale Date           
          

	 	 	 	 	 

	Purchaser Name(s):
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 

Sales Agent:    
               
              
         Sales Mgr:     
               
         
             QAO:                                         

Credit Information:

Completed credit app: ___ Yes ___ No            FICO Score: _____ Down Pmt %: _____

Source of Down Pmt:                                                    Gift letter required? _____ yes _____ no

Exception Description:

      
                
                
               
               
    
              
             
              
              
               
           
       

     
              
             
             
              
            
              
              
             
              
             
              
       

Exception Justification:

	 

	 

	 

	 

	 

	 

	 

	 

	 

	 

     
              
              
              
              
          
         

	 	 	 	 	 

	Authorization By:
	 	 	 	 
	 

	 	 

Name and Title*
	 	 
	Date:

	 	                                        	 	 

(Note: only the VP Client Services, National Contracts Manager or the Director, Operations
may authorize Credit exceptions. No person receiving monetary benefit from the sale may
approve credit exceptions.)

Page 5 of 6

 

Exhibit 2

EFFECTIVE 5/27/2009

DIAMOND RESORTS INTERNATIONAL®

CREDIT UNDERWRITING/SALES PROGRAM

	 	 	 	 	 	 	 	 	 
	 	 	 	 	DOWN	 	INTEREST	 	TERM
	FICO TIER	 	FICO SCORE	 	PAYMENT %	 	RATE %	 	(months)
	Tier l
	 	>800	 	10.00	 	15.9	 	120, 84, 60
	 
	 	 	 	>14.99	 	14.9	 	120, 84, 60
	 
	 	 	 	>24.99	 	13.9	 	120, 84, 60
	Tier 2
	 	700 – 799	 	10.00	 	17.9	 	120, 84, 60
	 
	 	 	 	>14.99	 	16.9	 	120, 84, 60
	 
	 	 	 	>24.99	 	15.9	 	120, 84, 60
	Tier 1 – 2
	 	>699	 	>49.99	 	12.9	 	120, 84, 60
	Tier 3
	 	650 – 699	 	10.00	 	17.9	 	120, 84, 60
	 
	 	 	 	>14.99	 	16.9	 	120, 84, 60
	 
	 	 	 	>24.99	 	15.9	 	120, 84, 60
	Tier 4
	 	600 – 649	 	>14.99	 	17.9	 	120, 84, 60
	 
	 	 	 	>24.99	 	15.9	 	120, 84, 60
	Tier 5
	 	575 – 599	 	>29.99	 	17.9	 	120, 84, 60
	Tier 6
	 	525 – 574	 	>49.99	 	17.9	 	120, 84, 60
	Tier 7
	 	<525	 	100	 	n/a	 	n/a
	For existing owners add-on, upgrade or wrap:	 	 	 	 	 	 
	Tier 1 – 3
	 	>649	 	10.00	 	15.9	 	120, 84, 60
	 
	 	 	 	>14.99	 	14.9	 	120, 84, 60
	 
	 	 	 	>24.99	 	13.9	 	120, 84, 60

Notes:

	1.	 	Any loan with a FICO score less than 600 will be considered grey paper financing.
Commissions will be paid based on the current grey paper policy of 50% regular commission paid
when sale is made active, 25% of regular commission after 6 timely payments; 25% of regular
commission after 12 timely payments.
	 
	2.	 	Any loan in which a credit exception is granted for any reason will fall into the grey paper
financing category regardless of FICO Score. Commissions will be paid based on the current
grey paper policy of 50% regular commission paid when sale is made active, 25% of regular
commission after 6 timely payments; 25% of regular commission after 12 timely payments.
	 
	3.	 	A minimum 30% down payment is required when no credit report is available. The interest rate
is determined per the actual rate in the above table, utilizing the 575 — 599 FICO SCORE
range, given the level of down payment, i.e., “30.00 -which is currently 17.9%.
	 
	4.	 	For EXISTING OWNERS Tier 1 — 3 option: Down payments must be full cash to qualify for lower
rate. (Equity cannot be applied to down payment amount).
	 
	5.	 	UPGRADES: Can either be paid-in-full or non-paid-in-full subject to Upgrade Contract Policy:
10% down payment on incremental sale amount for existing owners with a FICO >649; interest
rate determined solely per above matrix (equity plus 10% cash down payment used to determine
interest rate for 50% down payment option.) The “no credit report” minimum down payment
requirement of 30% takes precedent over any and all existing owner down payment requirements.
	 
	6.	 	ADD ONS: Must receive 10% down payment for existing owners with a FICO >649. The rate on
the add-on will be per the above table. The “no credit report” minimum down payment
requirement of 30% takes precedent over any and all “existing-owner” down payment
requirements.
	 
	7.	 	WRAPS: Must receive 10% down payment on the incremental sales amount for existing owners with
a FICO >649. The rate on the wrap will be per the above table. The “no credit report”
minimum down payment requirement of 30% takes precedent over any and all “existing-owner” down
payment requirements.
	 
	8.	 	Civil Judgments and Open Public Record’s (including medical bills) must be closed or be less
than $10,000.00 for deeded sales. Civil judgments or liens on trust based sales
shall not be a factor in extending credit for applicants) that otherwise qualifies in
accordance with the current credit underwriting policy.
	 
	9.	 	State and county tax liens must be closed or less than $1,000.
	 
	10.	 	Bankruptcies must be closed for a period of 12 months.
	 
	11.	 	Any financed sale not setup on the ACH, auto debit payment (savings or checking account) plan
at point of sale will result in sales agent(s) commission reduction of 1% point.
	 
	12.	 	Cash-out discount option of 4% off net incremental sales price available at point of sale to
buyers that cash out within 30 days from the sale date

REV. 5-27-09

Page 6 of 6exv10w3

Exhibit 10.3

Execution Copy

DIAMOND RESORTS ISSUER 2008 LLC,

as Issuer

DIAMOND RESORTS FINANCIAL SERVICES, INC.,

as Servicer

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Indenture Trustee, Custodian and Back-Up Servicer

and

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,

as Agent

 

THIRD AMENDED AND RESTATED

INDENTURE

Dated as of August 31, 2010

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION	 	 	3	 
	 
	 	 	 	 	 	 
	SECTION 1.1.

	 	General Definitions
	 	 	3	 
	SECTION 1.2.

	 	Compliance Certificates and Opinions
	 	 	3	 
	SECTION 1.3.

	 	Form of Documents Delivered to Indenture Trustee
	 	 	3	 
	SECTION 1.4.

	 	Acts of Noteholders, etc.
	 	 	4	 
	SECTION 1.5.

	 	Notices; Waiver
	 	 	5	 
	SECTION 1.6.

	 	Effect of Headings and Table of Contents
	 	 	6	 
	SECTION 1.7.

	 	Successors and Assigns
	 	 	6	 
	SECTION 1.8.

	 	GOVERNING LAW
	 	 	6	 
	SECTION 1.9.

	 	Legal Holidays
	 	 	6	 
	SECTION 1.10.

	 	Execution in Counterparts
	 	 	6	 
	SECTION 1.11.

	 	Inspection
	 	 	7	 
	SECTION 1.12.

	 	Survival of Representations and Warranties
	 	 	7	 
	 
	 	 	 	 	 	 
	ARTICLE II. THE NOTES	 	 	7	 
	 
	 	 	 	 	 	 
	SECTION 2.1.

	 	General Provisions
	 	 	7	 
	SECTION 2.2.

	 	[RESERVED]
	 	 	8	 
	SECTION 2.3.

	 	Definitive Notes
	 	 	8	 
	SECTION 2.4.

	 	Registration, Transfer and Exchange of Notes
	 	 	8	 
	SECTION 2.5.

	 	Mutilated, Destroyed, Lost and Stolen Notes
	 	 	10	 
	SECTION 2.6.

	 	Payment of Interest and Principal; Rights Preserved
	 	 	11	 
	SECTION 2.7.

	 	Persons Deemed Owners
	 	 	11	 
	SECTION 2.8.

	 	Cancellation
	 	 	11	 
	SECTION 2.9.

	 	Noteholder Lists
	 	 	12	 
	SECTION 2.10.

	 	Confidentiality
	 	 	12	 
	SECTION 2.11.

	 	Optional Prepayment
	 	 	12	 
	 
	 	 	 	 	 	 
	ARTICLE III. ACCOUNTS; COLLECTION AND APPLICATION OF MONEYS; REPORTS	 	 	13	 
	 
	 	 	 	 	 	 
	SECTION 3.1.

	 	Trust Accounts; Investments by Indenture Trustee
	 	 	13	 
	SECTION 3.2.

	 	Establishment and Administration of the Accounts
	 	 	15	 
	SECTION 3.3.

	 	[RESERVED]
	 	 	16	 
	SECTION 3.4.

	 	Distributions
	 	 	16	 
	SECTION 3.5.

	 	Reports to Noteholders
	 	 	18	 
	SECTION 3.6.

	 	Tax Matters
	 	 	18	 
	 
	 	 	 	 	 	 
	ARTICLE IV. THE TRUST ESTATE	 	 	19	 
	 
	 	 	 	 	 	 
	SECTION 4.1.

	 	Conveyance of Trust Estate/Acceptance by Indenture Trustee
	 	 	19	 
	SECTION 4.2.

	 	Acquisition of Timeshare Loans
	 	 	19	 
	SECTION 4.3.

	 	Additional Timeshare Loans
	 	 	19	 
	SECTION 4.4.

	 	Tax Treatment
	 	 	20	 
	SECTION 4.5.

	 	Further Action Evidencing Assignments
	 	 	21	 
	SECTION 4.6.

	 	Repurchase and Substitution of Timeshare Loans
	 	 	21	 
	SECTION 4.7.

	 	Release of Lien
	 	 	23	 
	SECTION 4.8.

	 	Appointment of Custodian
	 	 	24	 
	SECTION 4.9.

	 	Sale of Timeshare Loans
	 	 	24	 

ii

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE V. SERVICING OF TIMESHARE LOANS	 	 	24	 
	 
	SECTION 5.1.

	 	Appointment of Servicer; Servicing Standard
	 	 	24	 
	SECTION 5.2.

	 	Payments on the Timeshare Loans
	 	 	25	 
	SECTION 5.3.

	 	Duties and Responsibilities of the Servicer
	 	 	26	 
	SECTION 5.4.

	 	Servicer Events of Default
	 	 	30	 
	SECTION 5.5.

	 	Accountings; Statements and Reports
	 	 	31	 
	SECTION 5.6.

	 	Records
	 	 	33	 
	SECTION 5.7.

	 	Fidelity Bond; Errors and Omissions Insurance
	 	 	33	 
	SECTION 5.8.

	 	Merger or Consolidation of the Servicer
	 	 	33	 
	SECTION 5.9.

	 	Sub-Servicing
	 	 	34	 
	SECTION 5.10.

	 	Servicer Resignation
	 	 	34	 
	SECTION 5.11.

	 	Fees and Expenses
	 	 	34	 
	SECTION 5.12.

	 	Access to Certain Documentation
	 	 	35	 
	SECTION 5.13.

	 	No Offset
	 	 	35	 
	SECTION 5.14.

	 	Cooperation
	 	 	35	 
	SECTION 5.15.

	 	Indemnification, Third Party Claim
	 	 	35	 
	SECTION 5.16.

	 	Back-Up Servicer and Successor Servicer
	 	 	36	 
	SECTION 5.17.

	 	Limitation of Liability
	 	 	38	 
	SECTION 5.18.

	 	Recordation
	 	 	38	 
	SECTION 5.19.

	 	St. Maarten Notice
	 	 	39	 
	SECTION 5.20.

	 	DFS Term as Servicer
	 	 	39	 
	 
	 	 	 	 	 	 
	ARTICLE VI. EVENTS OF DEFAULT; REMEDIES	 	 	39	 
	 
	 	 	 	 	 	 
	SECTION 6.1.

	 	[Reserved]
	 	 	39	 
	SECTION 6.2.

	 	Acceleration of Maturity; Rescission and Annulment
	 	 	39	 
	SECTION 6.3.

	 	Remedies
	 	 	41	 
	SECTION 6.4.

	 	Indenture Trustee May File Proofs of Claim
	 	 	42	 
	SECTION 6.5.

	 	Indenture Trustee May Enforce Claims Without Possession of
Notes
	 	 	42	 
	SECTION 6.6.

	 	Allocation of Money Collected
	 	 	43	 
	SECTION 6.7.

	 	Limitation on Suits
	 	 	44	 
	SECTION 6.8.

	 	Unconditional Right of Noteholders to Receive Principal and
Interest
	 	 	44	 
	SECTION 6.9.

	 	Restoration of Rights and Remedies
	 	 	44	 
	SECTION 6.10.

	 	Rights and Remedies Cumulative
	 	 	44	 
	SECTION 6.11.

	 	Delay or Omission Not Waiver
	 	 	45	 
	SECTION 6.12.

	 	Control by Agent
	 	 	45	 
	SECTION 6.13.

	 	Waiver of Events of Default
	 	 	45	 
	SECTION 6.14.

	 	Undertaking for Costs
	 	 	46	 
	SECTION 6.15.

	 	Waiver of Stay or Extension Laws
	 	 	46	 
	SECTION 6.16.

	 	Sale of Trust Estate
	 	 	46	 
	SECTION 6.17.

	 	Action on Notes
	 	 	48	 
	SECTION 6.18.

	 	Performance and Enforcement of Certain Obligations
	 	 	48	 
	 
	 	 	 	 	 	 
	ARTICLE VII. THE INDENTURE TRUSTEE	 	 	48	 
	 
	 	 	 	 	 	 
	SECTION 7.1.

	 	Certain Duties
	 	 	48	 

iii

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	SECTION 7.2.

	 	Notice of Events of Default and Amortization Events
	 	 	50	 
	SECTION 7.3.

	 	Certain Matters Affecting the Indenture Trustee
	 	 	50	 
	SECTION 7.4.

	 	Indenture Trustee Not Liable for Notes or Timeshare Loans 
	 	 	51	 
	SECTION 7.5.

	 	Indenture Trustee May Own Notes
	 	 	51	 
	SECTION 7.6.

	 	Indenture Trustee’s Fees and Expenses
	 	 	51	 
	SECTION 7.7.

	 	Eligibility Requirements for Indenture Trustee
	 	 	52	 
	SECTION 7.8.

	 	Resignation or Removal of Indenture Trustee
	 	 	52	 
	SECTION 7.9.

	 	Successor Indenture Trustee
	 	 	53	 
	SECTION 7.10.

	 	Merger or Consolidation of Indenture Trustee
	 	 	54	 
	SECTION 7.11.

	 	Appointment of Co-Indenture Trustee or Separate Indenture
Trustee
	 	 	54	 
	SECTION 7.12.

	 	Note Registrar Rights
	 	 	56	 
	SECTION 7.13.

	 	Authorization
	 	 	56	 
	 
	 	 	 	 	 	 
	ARTICLE VIII. COVENANTS	 	 	56	 
	 
	 	 	 	 	 	 
	SECTION 8.1.

	 	Payment of Principal and Interest
	 	 	56	 
	SECTION 8.2.

	 	Maintenance of Office or Agency; Chief Executive Office
	 	 	56	 
	SECTION 8.3.

	 	Money for Payments to Noteholders to be Held in Trust
	 	 	56	 
	SECTION 8.4.

	 	Existence; Merger; Consolidation, etc.
	 	 	57	 
	SECTION 8.5.

	 	Protection of Trust Estate; Further Assurances
	 	 	57	 
	SECTION 8.6.

	 	Additional Covenants
	 	 	58	 
	SECTION 8.7.

	 	Taxes
	 	 	59	 
	SECTION 8.8.

	 	Treatment of Notes as Debt for Tax Purposes
	 	 	59	 
	SECTION 8.9.

	 	Hedge Agreements
	 	 	59	 
	SECTION 8.10.

	 	Further Instruments and Acts
	 	 	60	 
	 
	 	 	 	 	 	 
	ARTICLE IX. SUPPLEMENTAL INDENTURES	 	 	60	 
	 
	 	 	 	 	 	 
	SECTION 9.1.

	 	[Reserved]
	 	 	60	 
	SECTION 9.2.

	 	Supplemental Indentures
	 	 	60	 
	SECTION 9.3.

	 	Execution of Supplemental Indentures
	 	 	60	 
	SECTION 9.4.

	 	Effect of Supplemental Indentures
	 	 	60	 
	SECTION 9.5.

	 	Reference in Notes to Supplemental Indentures
	 	 	60	 
	 
	 	 	 	 	 	 
	ARTICLE X. BORROWINGS	 	 	61	 
	 
	 	 	 	 	 	 
	SECTION 10.1.

	 	Optional Borrowings
	 	 	61	 
	 
	 	 	 	 	 	 
	ARTICLE XI. SATISFACTION AND DISCHARGE	 	 	61	 
	 
	 	 	 	 	 	 
	SECTION 11.1.

	 	Satisfaction and Discharge of Indenture
	 	 	61	 
	SECTION 11.2.

	 	Application of Trust Money
	 	 	63	 
	SECTION 11.3.

	 	Trust Termination Date
	 	 	63	 
	 
	 	 	 	 	 	 
	ARTICLE XII. REPRESENTATIONS AND WARRANTIES	 	 	63	 
	 
	 	 	 	 	 	 
	SECTION 12.1.

	 	Representations and Warranties of the Issuer
	 	 	63	 
	SECTION 12.2.

	 	Representations and Warranties of the Initial Servicer
	 	 	65	 
	SECTION 12.3.

	 	Representations and Warranties of the Indenture Trustee and
Back-Up Servicer
	 	 	67	 
	SECTION 12.4.

	 	Multiple Roles
	 	 	69	 
	 
	 	 	 	 	 	 

iv

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE XIII. MISCELLANEOUS	 	 	69	 
	 
	 	 	 	 	 	 
	SECTION 13.1.

	 	Statements Required in Certificate or Opinion
	 	 	69	 
	SECTION 13.2.

	 	Notices
	 	 	69	 
	SECTION 13.3.

	 	No Proceedings
	 	 	71	 
	SECTION 13.4.

	 	Limitation of Liability
	 	 	72	 
	SECTION 13.5.

	 	Entire Agreement
	 	 	72	 
	SECTION 13.6.

	 	Severability of Provisions
	 	 	72	 
	SECTION 13.7.

	 	Indulgences; No Waivers
	 	 	72	 
	SECTION 13.8.

	 	Benefit of Indenture
	 	 	73	 
	 
	 	 	 	 	 	 
	ARTICLE XIV. NON-PETITION AND NON-RECOURSE	 	 	73	 
	 
	 	 	 	 	 	 
	SECTION 14.1.

	 	Limited Recourse Against Structured Purchaser
	 	 	73	 
	SECTION 14.2.

	 	No Bankruptcy Petition Against Structured Purchaser
	 	 	73	 
	 
	 	 	 	 	 	 
	EXHIBIT A Form of Note	 	 	 	 
	EXHIBIT B Form of Investor Representation Letter	 	 	 	 
	EXHIBIT C Collection Policy	 	 	 	 
	EXHIBIT D Form of Monthly Servicer Report	 	 	 	 
	EXHIBIT E Form of Servicer’s Officer’s Certificate	 	 	 	 
	EXHIBIT F Form of Record Layout for Data Conversion	 	 	 	 
	EXHIBIT G Form of St. Maarten Notice	 	 	 	 
	EXHIBIT H Form of Additional Timeshare Loan Supplement	 	 	 	 
	 
	ANNEX A Third Amended and Restated Standard Definitions	 	 	 	 

v

 

THIRD AMENDED AND RESTATED INDENTURE

     This THIRD AMENDED AND RESTATED INDENTURE (this “Indenture”), dated as of August 31, 2010, is
among Diamond Resorts Issuer 2008 LLC, a Delaware limited liability company, as issuer (the
“Issuer”), Diamond Resorts Financial Services, Inc. (“DFS”), a Nevada corporation, as servicer (the
“Servicer”), Wells Fargo Bank, National Association, a national banking association, as trustee
(the “Indenture Trustee”), as custodian (the “Custodian”) and as back-up servicer (the “Back-Up
Servicer”) and Credit Suisse AG, Cayman Islands Branch, as agent of the Purchasers pursuant to the
Note Funding Agreement (the “Agent”) and hereby amends and restates in its entirety that certain
second amended and restated indenture, dated as of July 16, 2010 (the “Second A/R Indenture”),
among the parties thereto, which amended and restated in its entirety that certain amended and
restated indenture, dated as of March 27, 2009 (the “Amended and Restated Indenture”), among the
parties thereto, which amended and restated in its entirety that certain indenture, dated as of
November 3, 2008 (the “Original Indenture”), among the parties thereto.

RECITALS OF THE ISSUER

     WHEREAS, the parties hereto desire to amend and restate in its entirety the Second A/R
Indenture as provided herein, and all actions required to do so under the Second A/R Indenture have
been taken;

     WHEREAS, the Issuer had duly authorized the execution and delivery of the Original Indenture
to provide for the issuance of a single class of variable funding notes designated the Diamond
Resorts Issuer 2008 LLC, Variable Funding Notes (the “Original Notes”);

     WHEREAS, the Issuer had duly authorized the execution and delivery of the Amended and Restated
Indenture to provide for the issuance of a single class of variable funding notes designated the
Diamond Resorts Issuer 2008 LLC, Variable Funding Notes (the “A/R Notes”) and the exchange of the
Original Notes for the A/R Notes;

     WHEREAS, the Issuer had duly authorized the execution and delivery of the Second A/R Indenture
to provide for the issuance of a single class of variable funding notes designated the Diamond
Resorts Issuer 2008 LLC, Variable Funding Notes (the “Second A/R Notes”) and the exchange of the
A/R Notes for the Second A/R Notes

     WHEREAS, the Issuer has duly authorized (a) the execution and delivery of this Indenture to
provide for the issuance of a single class of variable funding notes designated the Diamond Resorts
Issuer 2008 LLC, Variable Funding Notes (the “Notes”) and (b) the exchange of the Second A/R Notes
for the Notes;

     WHEREAS, the Notes will evidence Borrowings made from time to time prior to the Facility
Termination Date by the Issuer in accordance with the terms described herein and in the Note
Funding Agreement;

     WHEREAS, the Servicer has agreed to service and administer the Timeshare Loans securing the
Notes and the Back-Up Servicer has agreed to, among other things, service and administer the
Timeshare Loans if the Servicer shall no longer be the Servicer hereunder;

1

 

     WHEREAS, the Agent, as nominee of the Purchasers shall, as the registered Noteholder of the
Notes, be entitled to exercise certain rights and remedies under this Indenture; and

     WHEREAS, all things necessary to make the Notes, when executed by the Issuer and authenticated
and delivered by the Indenture Trustee hereunder, the valid recourse obligations of the Issuer, and
to make this Indenture a valid agreement of the Issuer, in accordance with its terms, have been
done.

     NOW, THEREFORE, THIS INDENTURE WITNESSETH:

     For and in consideration of the premises and the purchase of the Notes by the holders thereof,
it is mutually covenanted and agreed, for the benefit of the Secured Parties, as follows:

GRANTING CLAUSE

     To secure the payment of the principal of and interest on the Notes in accordance with their
terms, the payment of all of the sums payable under this Indenture and the performance of the
covenants contained in this Indenture, the Issuer hereby Grants to the Indenture Trustee, for the
benefit of the Secured Parties, all of the Issuer’s right, title and interest in and to the
following whether now owned or hereafter acquired and any and all benefits accruing to the Issuer
from, (i) the Timeshare Loans, (ii) the Qualified Substitute Timeshare Loans and Additional
Timeshare Loans, if any, (iii) the Receivables in respect of each Timeshare Loan due on and after
the applicable Cut-Off Date, (iv) the related Timeshare Loan Documents, (v) all Related Security in
respect of each Timeshare Loan, (vi) all rights and remedies under the Transfer Agreements, the
Sale Agreement, the Purchase Agreement, any Hedge Agreements, the In-Transit Custodial Agreement
and the Custodial Agreement, (vii) all rights and remedies under the Undertaking Agreement, (viii)
all amounts in or to be deposited to each Trust Account, (ix) any Retained Assets and (x) proceeds
of the foregoing (including, without limitation, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, deposit accounts, Insurance Proceeds,
condemnation awards, rights to payment of any and every kind, and other forms of obligations and
receivables which at any time constitute all or part or are included in the proceeds of any of the
foregoing, including, without limitation, any Retained Asset Proceeds) (collectively, the “Trust
Estate”). Notwithstanding the foregoing, the Trust Estate shall not include any (i) Miscellaneous
Payments and Processing Charges made by an Obligor and (ii) Timeshare Loan released from the lien
of this Indenture in accordance with the terms hereof and any Related Security, Timeshare Loan
Files, income or proceeds related to such released Timeshare Loan.

     Such Grant is made in trust to secure (i) the payment of all amounts due on the Notes in
accordance with their terms, equally and ratably except as otherwise may be provided in this
Indenture, without prejudice, priority, or distinction between any Note by reason of differences in
time of issuance or otherwise, and (ii) the payment of all other sums payable under the Notes and
this Indenture.

     The Indenture Trustee acknowledges such Grant, accepts the trusts hereunder in accordance with
the provisions hereof, and agrees to perform the duties herein required to the best of its ability
and to the end that the interests of the Secured Parties may be adequately and

2

 

effectively protected as hereinafter provided. The Indenture Trustee also acknowledges receipt of
the Second A/R Notes in connection with the authentication and delivery of the Notes.

ARTICLE I.

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

          SECTION 1.1. General Definitions.

     In addition to the terms defined elsewhere in this Indenture, capitalized terms shall have the
meanings given them in the Third Amended and Restated Standard Definitions attached hereto as Annex
A.

          SECTION 1.2. Compliance Certificates and Opinions.

     Upon any written application or request (or oral application with prompt written or electronic
confirmation) by the Issuer to the Indenture Trustee to take any action under any provision of this
Indenture, other than any request that (a) the Indenture Trustee authenticate the Notes specified
in such request, (b) the Indenture Trustee invest moneys in any of the Trust Accounts pursuant to
the written directions specified in such request, or (c) the Indenture Trustee pay moneys due and
payable to the Issuer hereunder to the Issuer’s assignee specified in such request, the Indenture
Trustee may require the Issuer to furnish to the Indenture Trustee an Officer’s Certificate stating
that all conditions precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and that the request otherwise is in accordance with the terms of
this Indenture, and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the case of any such
requested action as to which other evidence of satisfaction of the conditions precedent thereto is
specifically required by any provision of this Indenture, no additional certificate or opinion need
be furnished.

          SECTION 1.3. Form of Documents Delivered to Indenture Trustee.

     In any case where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified by, or covered by
the opinion of, only one such Person, or that they be so certified or covered by only one document,
but one such Person may certify or give an opinion with respect to some matters and one or more
other such Persons as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.

     Any certificate or opinion of an officer of the Issuer delivered to the Indenture Trustee may
be based, insofar as it relates to legal matters, upon an Opinion of Counsel, unless such officer
knows that the Opinion of Counsel with respect to the matters upon which his certificate or opinion
is based is erroneous. Any such officer’s certificate or opinion and any Opinion of Counsel may be
based, insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Issuer as to such factual matters unless such
officer or counsel knows that the certificate or opinion or representations with respect to such
matters is erroneous. Any Opinion of Counsel may be based on the written opinion of other counsel,
in which event such Opinion of Counsel shall be accompanied by a copy of such other

3

 

counsel’s opinion and shall include a statement to the effect that such counsel believes that such
counsel and the Indenture Trustee may reasonably rely upon the opinion of such other counsel.

     Where any Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this Indenture, they may,
but need not, be consolidated and form one instrument.

     Wherever in this Indenture, in connection with any application or certificate or report to the
Indenture Trustee, it is provided that the Issuer shall deliver any document as a condition of the
granting of such application, or as evidence of compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or at the effective
date of such certificate or report (as the case may be), of the facts and opinions stated in such
document shall in such case be conditions precedent to the right of the Issuer to have such
application granted or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the Indenture Trustee’s right to rely upon the truth and accuracy
of any statement or opinion contained in any such document as provided in Section 7.1(b) hereof.

     Whenever in this Indenture it is provided that the absence of the occurrence and continuation
of a Default, Event of Default, Servicer Event of Default or Amortization Event is a condition
precedent to the taking of any action by the Indenture Trustee at the request or direction of the
Issuer, then, notwithstanding that the satisfaction of such condition is a condition precedent to
the Issuer’s right to make such request or direction, the Indenture Trustee shall be protected in
acting in accordance with such request or direction if it does not have knowledge of the occurrence
and continuation of such event. For all purposes of this Indenture, the Indenture Trustee shall not
be deemed to have knowledge of any Default, Event of Default, Servicer Event of Default or
Amortization Event nor shall the Indenture Trustee have any duty to monitor or investigate to
determine whether a Default, Event of Default (other than an Event of Default of the kind described
in Section 6.1(a) hereof), Servicer Event of Default or Amortization Event has occurred unless a
Responsible Officer of the Indenture Trustee shall have actual knowledge thereof or shall have been
notified in writing thereof by the Issuer, the Servicer or any Secured Party.

          SECTION 1.4. Acts of Noteholders, etc.

     (a) Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such Noteholders in person or by
agents duly appointed in writing; and except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the Indenture Trustee
and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the
Noteholders signing such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this Indenture and
(subject to Section 7.1 hereof) conclusive in favor of the Indenture Trustee and the Issuer, if
made in the manner provided in this Section 1.4.

4

 

     (b) The fact and date of the execution by any Person of any such instrument or writing may be
proved by the affidavit of a witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof. Where such execution
is by a signer acting in a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner which the Indenture Trustee deems sufficient.

     (c) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the
holder of any Note shall bind every future holder of the same Note and the holder of every Note
issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in
reliance thereon, whether or not notation of such action is made upon such Note.

     (d) By accepting the Notes issued pursuant to this Indenture, each Noteholder irrevocably
appoints the Indenture Trustee hereunder as the special attorney-in-fact for such Noteholder vested
with full power on behalf of such Noteholder to effect and enforce the rights of such Noteholder
for the benefit of such Noteholder; provided that nothing contained in this Section 1.4(d) hereof
shall be deemed to confer upon the Indenture Trustee any duty or power to vote on behalf of the
Noteholders with respect to any matter on which the Noteholders have a right to vote pursuant to
the terms of this Indenture.

          SECTION 1.5. Notices; Waiver.

     (a) Where this Indenture provides for notice to Noteholders or the Agent of any event, or the
mailing of any report to Noteholders or the Agent, such notice or report shall be sufficiently
given (unless otherwise herein expressly provided) if in writing and mailed, certified mail return
receipt requested, or sent by private courier or confirmed electronically to each Noteholder and
the Agent affected by such event or to whom such report is required to be mailed, at its address as
it appears in the Note Register or in Section 13.2 hereof, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice or the mailing of such
report. In any case where a notice or report to Noteholders or the Agent is mailed, neither the
failure to mail such notice or report, nor any defect in any notice or report so mailed, to any
particular Noteholder or the Agent shall affect the sufficiency of such notice or report with
respect to other Noteholders or the Agent. Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by
Noteholders or the Agent shall be filed with the Indenture Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such waiver.

     (b) In case by reason of the suspension of regular mail service or by reason of any other
cause it shall be impracticable to mail or send notice to Noteholders or the Agent, in accordance
with Section 1.5(a) hereof, of any event or any report to Noteholders or the Agent when such notice
or report is required to be delivered pursuant to any provision of this Indenture,

5

 

then such notification or delivery as shall be made with the approval of the Indenture Trustee
shall constitute a sufficient notification for every purpose hereunder.

     (c) To the extent that any Purchaser which the Agent has confirmed holds at least a 15%
interest in the Notes shall give written direction to any of the parties hereto that it wishes to
directly receive copies of any notices and other communications that the Noteholders or the Agent
is entitled to receive hereunder, the parties hereto agree to comply with such direction.

          SECTION 1.6. Effect of Headings and Table of Contents.

     The Article and Section headings herein and in the Table of Contents are for convenience only
and shall not affect the construction hereof.

          SECTION 1.7. Successors and Assigns.

     All covenants and agreements in this Indenture by each of the parties hereto shall bind its
respective successors and permitted assigns, whether so expressed or not.

          SECTION 1.8. GOVERNING LAW.

     THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW
OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK.
UNLESS MADE APPLICABLE IN A SUPPLEMENT HERETO, THIS INDENTURE IS NOT SUBJECT TO THE TRUST INDENTURE
ACT OF 1939, AS AMENDED, AND SHALL NOT BE GOVERNED THEREBY AND CONSTRUED IN ACCORDANCE THEREWITH.

          SECTION 1.9. Legal Holidays.

     In any case where any Payment Date or the Stated Maturity or any other date on which principal
of or interest on any Note is proposed to be paid shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Notes) such payment need not be
made on such date, but may be made on the next succeeding Business Day with the same force and
effect as if made on such Payment Date, Stated Maturity, or other date on which principal of or
interest on any Note is proposed to be paid, provided that no penalty interest shall accrue for the
period from and after such Payment Date, Stated Maturity, or any other date on which principal of
or interest on any Note is proposed to be paid, as the case may be, until such next succeeding
Business Day.

          SECTION 1.10. Execution in Counterparts.

     This Indenture may be executed in any number of counterparts, each of which so executed shall
be deemed to be an original, but all such counterparts shall together constitute but one and the
same instrument.

6

 

          SECTION 1.11. Inspection.

     The Issuer agrees that, on reasonable prior notice (or, upon the occurrence of a Default,
Event of Default, Amortization Event, without prior notice), it will permit the representatives of
the Indenture Trustee, the Agent, any Noteholder or any Purchaser holding Notes or interests in
the Notes evidencing at least 15% of the aggregate Outstanding Note Balance, during the Issuer’s
normal business hours, to examine all of the books of account, records, reports and other papers
of the Issuer to make copies thereof and extracts therefrom, and to discuss its affairs, finances
and accounts with its designated officers, employees and independent accountants in the presence
of such designated officers and employees (and by this provision the Issuer hereby authorizes its
accountants to discuss with such representatives such affairs, finances and accounts), all at such
reasonable times and as often as may be reasonably requested for the purpose of reviewing or
evaluating the financial condition or affairs of the Issuer or the performance of and compliance
with the covenants and undertakings of the Issuer and the Servicer in this Indenture or any of the
other documents referred to herein or therein. Any expense incident to the exercise by the
Indenture Trustee, the Agent, a Noteholder or a Purchaser during the continuance of any Default,
Event of Default or Amortization Event, of any right under this Section 1.11 shall be borne by the
Issuer. Nothing contained herein shall be construed as a duty of the Indenture Trustee to perform
such inspection.

          SECTION 1.12. Survival of Representations and Warranties.

     The representations, warranties and certifications of the Issuer made in this Indenture or in
any certificate or other writing delivered by the Issuer pursuant hereto shall survive the
authentication and delivery of the Notes hereunder.

ARTICLE II.

THE NOTES

          SECTION 2.1. General Provisions.

     (a) Form of Notes. The Notes shall be designated as the “Diamond Resorts Issuer 2008
LLC, Variable Funding Notes”. The Notes shall be issued in only one class and, together with their
certificates of authentication, shall be in substantially the form
set forth in Exhibit A hereto, with such appropriate insertions, omissions, substitutions and other variations as are
required or are permitted by this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon, as may consistently herewith, be
determined by the officer executing such Notes, as evidenced by such officer’s execution of such
Notes.

     (b) Maximum_Facility Balance and Denominations. The Outstanding Note Balance of the
Notes shall not exceed the Maximum Facility Balance. The Notes shall be issuable only as registered
Notes, without interest coupons, in the denominations of at least $1,000,000 and in integral
multiples of $1,000; provided, however, that the foregoing shall not restrict or prevent
the transfer in accordance with Section 2.4 hereof of any Note with a remaining Outstanding Note
Balance of less than $1,000,000; provided, further, that the foregoing shall not restrict
or prevent the issuance of the Notes on the Amendment Closing Date.

7

 

     (c) Execution,
Authentication, Delivery and Dating. The Second A/R Notes are hereby
exchanged for the Notes. For the avoidance of doubt, the indebtedness evidenced by the Second A/R
Notes remains outstanding and is consolidated with the indebtedness evidenced by the Notes. The
Notes shall be manually executed by an Authorized Officer of the Issuer. Any Note bearing the
signature of an individual who was at the time of execution thereof an Authorized Officer of the
Issuer shall bind the Issuer, notwithstanding that such individual ceases to hold such office
prior to the authentication and delivery of such Note or did not hold such office at the date of
such Note. No Note shall be entitled to any benefit under this Indenture or be valid or obligatory
for any purpose unless there appears on such Note a certificate of authentication substantially in
the form set forth in Exhibit A hereto, executed by the Indenture Trustee by manual
signature, and such certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder. Each Note shall be dated the
date of its authentication. The Notes may from time to time be executed by the Issuer and
delivered to the Indenture Trustee for authentication together with an Issuer Order to the
Indenture Trustee directing the authentication and delivery of such Notes and thereupon the same
shall be authenticated and delivered by the Indenture Trustee in accordance with such Issuer
Order.

          SECTION 2.2. [RESERVED]

          SECTION 2.3. Definitive Notes. The Notes shall only be issued in definitive
form.

          SECTION
2.4. Registration, Transfer and Exchange of Notes.

     (a) Note Register. At all times during the term of this Indenture, there shall be kept
at the Corporate Trust Office a register (the “Note Register”) for the registration, transfer and
exchange of Notes. The Indenture Trustee is hereby appointed “Note Registrar” for purposes of
registering Notes and transfers of Notes as herein provided. The names and addresses of all
Noteholders and the names and addresses of the transferees of any Notes shall be registered in the
Note Register. The Person in whose name any Note is so registered shall be deemed and treated as
the sole owner and Noteholder thereof for all purposes of this Indenture and the Note Registrar,
the Issuer, the Indenture Trustee, the Servicer and any agent of any of them shall not be affected
by any notice or knowledge to the contrary. A Note is transferable or exchangeable only upon the
surrender of such Note to the Note Registrar at the Corporate Trust Office together with an
assignment and transfer (executed by the Holder or his duly authorized attorney), subject to the
applicable requirements of this Section 2.4. Upon request of the Indenture Trustee, the Note
Registrar shall provide the Indenture Trustee with the names and addresses of Noteholders.

     (b) Surrender. Upon surrender for registration of transfer of any Note, subject to the
applicable requirements of this Section 2.4, the Issuer shall execute and the Indenture Trustee
shall duly authenticate in the name of the designated transferee or transferees, one or more new
Notes in denominations of a like aggregate denomination as the Note being surrendered. Each Note
surrendered for registration of transfer shall be canceled and subsequently destroyed by the Note
Registrar. Each new Note issued pursuant to this Section 2.4 shall be registered in the name of any
Person as the transferring Holder may request, subject to the applicable provisions of this Section
2.4. All Notes issued upon any registration of transfer or exchange of Notes shall be

8

 

entitled to the same benefits under this Indenture as the Notes surrendered upon such registration
of transfer or exchange.

     (c) Securities Laws Restrictions. The issuance of the Notes will not be registered or
qualified under the Securities Act or the securities laws of any state. No transfer of any Note by
a Noteholder or the registered holder of a Note may be made unless that transfer is made pursuant
to an effective registration statement under the Securities Act and an effective registration or a
qualification under applicable state securities laws, or is made in a transaction that does not
require such registration or qualification because the transfer satisfies one of the following: (i)
such resale or transfer is in compliance with Rule 144A under the Securities Act, to a person who
the transferor reasonably believes is a Qualified Institutional Buyer (as defined in Rule 144A)
that is purchasing for its own account or for the account of a Qualified Institutional Buyer and to
whom notice is given that such resale or transfer is being made in reliance upon Rule 144A under
the Securities Act and, in the case of the registered holder of a Note, as certified by registered
holder (other than the Agent and its initial transferees) in a letter
in the form of Exhibit B hereto or (ii) pursuant to an exemption from registration under the Securities Act. Each Person
that purchases or otherwise acquires any beneficial interest in a Note shall be deemed, by its
purchase or other acquisition thereof, to have represented, warranted and agreed as provided in the
legends of such Note and shall be deemed to have made the representations, warranties and covenants
set forth with respect to a transferee in the letter attached as Exhibit B hereto. Any
purported transfer of a Note not in accordance with this Section 2.4 shall be null and void and
shall not be given effect for any purpose hereunder. None of the Issuer, the Servicer or the
Indenture Trustee is obligated to register or qualify the Notes under the Securities Act or any
other securities law or to take any action not otherwise required under this Indenture to permit
the transfer of any Note without registration.

     (d) ERISA Considerations. No resale or other transfer of any Note may be made to any
transferee unless (i) such transferee is not, and will not acquire such Note on behalf or with the
assets of, any Benefit Plan or (ii) no “prohibited transaction” under ERISA or Section 4975 of the
Code that is not subject to a statutory, regulatory or administrative exemption and no violation of
any substantially similar provision of federal, state or local law will occur in connection with
such purchaser’s or such transferee’s acquisition, holding or disposition of such Note. In
addition, the Notes may not be purchased by or transferred to any Benefit Plan, or person acting on
behalf of or with assets of any Benefit Plan, unless it represents that it is not sponsored (within
the meaning of Section 3(16)(B) of ERISA) by a Diamond Resorts Entity, the Indenture Trustee or the
Agent, or by any Affiliate of any such Person.

     (e) Transfer Fees, Charges and Taxes. No fee or service charge shall be imposed by the
Note Registrar for its services in respect of any registration of transfer or exchange referred to
in this Section 2.4. The Note Registrar may require payment by each transferor of a sum sufficient
to cover any tax, expense or other governmental charge payable in connection with any such
transfer.

     (f) No Obligation to Register. None of the Issuer, the Indenture Trustee, the Servicer
or the Note Registrar is obligated to register or qualify the Notes under the Securities Act or any
other securities law or to take any action not otherwise required under this Indenture to permit
the transfer of such Notes without registration or qualification. Any such Noteholder desiring to

9

 

effect such transfer shall, and does hereby agree to, indemnify the Issuer, the Indenture Trustee,
the Servicer and the Note Registrar against any loss, liability or expense that may result if the
transfer is not so exempt or is not made in accordance with such federal and state laws.

     (g) Rule 144A Information. The Servicer agrees to cause the Issuer to provide such
information as required under Rule 144A under the Securities Act so as to allow resales of Notes
to Qualified Institutional Buyers in accordance herewith.

     (h) Sole Obligation. The Notes represent the sole obligation of the Issuer payable
from the Trust Estate and do not represent the obligations of the Originator, the Servicer, the
Depositor, the Back-Up Servicer, the Indenture Trustee, the Agent or the Custodian.

     (i) Note Funding Agreement. Notwithstanding anything in this Section 2.4 or elsewhere
in this Indenture or the Notes, the transfer restrictions described herein shall apply only to the
Noteholders and shall not apply to the Purchasers whose rights to transfer interests in the Notes
are governed solely by Section 8 of the Note Funding Agreement.

          SECTION
2.5. Mutilated, Destroyed, Lost and Stolen Notes.

     (a) If any mutilated Note is surrendered to the Indenture Trustee, the Issuer shall execute
and the Indenture Trustee shall authenticate and deliver in exchange therefor a replacement Note
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.

     (b) If there shall be delivered to the Issuer and the Indenture Trustee (i) evidence to their
satisfaction of the destruction, loss or theft of any Note and (ii) such security or indemnity as
may be required by them to save each of them and any agent of either of them harmless then, in the
absence of actual notice to the Issuer or the Indenture Trustee that such Note has been acquired by
a bona fide purchaser, the Issuer shall execute and upon its request the Indenture Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Note, a replacement Note
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.

     (c) In case the final installment of principal on any such mutilated, destroyed, lost or
stolen Note has become or will at the next Payment Date become due and payable, the Issuer in its
discretion may, instead of issuing a replacement Note, pay such Note.

     (d) Upon the issuance of any replacement Note under this Section 2.5, the Issuer or the
Indenture Trustee may require the payment by the Noteholder of a sum sufficient to cover any tax or
other governmental charge that may be imposed as a result of the issuance of such replacement Note.

     (e) Every replacement Note issued pursuant to this Section 2.5 in lieu of any destroyed, lost
or stolen Note, shall constitute an original additional contractual obligation of the Issuer,
whether or not the destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and proportionately with any and
all other Notes duly issued hereunder.

10

 

     (f) The provisions of this Section 2.5 are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Notes.

          SECTION
2.6. Payment of Interest and Principal; Rights Preserved.

     (a) Any installment of interest or principal, payable on any Note that is punctually paid or
duly provided for by or on behalf of the Issuer on the applicable Payment Date shall be paid to the
Person in whose name such Note was registered at the close of business on the Record Date for such
Payment Date by check mailed to the address specified in the Note Register (or, if the Noteholder
is the Agent, at such addresses as the Agent shall specify in writing), or if a Noteholder has
provided wire transfer instructions to the Indenture Trustee at least five Business Days prior to
the applicable Payment Date, upon the request of a Noteholder, by wire transfer of federal funds to
the accounts and numbers specified in the Note Register (or, if the Noteholder is the Agent, at
such accounts and numbers as the Agent shall specify in writing), in each case on such Record Date
for such Person.

     (b) All reductions in the principal amount of a Note effected by payments of installments of
principal made on any Payment Date or prepayment date as set forth in a Prepayment Notice shall be
binding upon all Holders of such Note and of any Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted on such
Note. All payments on the Notes shall be paid without any requirement of presentment, except
that each Holder of any Note shall be deemed to agree, by its acceptance of the same, to surrender
such Note at the Corporate Trust Office prior to receipt of payment of the final installment of
principal of such Note.

          SECTION 2.7. Persons Deemed Owners.

     Prior to due presentment of a Note for registration of transfer, the Issuer, the Indenture
Trustee, and any agent of the Issuer or the Indenture Trustee may treat the registered Noteholder
as the owner of such Note for the purpose of receiving payment of principal of and interest on
such Note and for all other purposes whatsoever, whether or not such Note be overdue, and neither
the Issuer, the Indenture Trustee, nor any agent of the Issuer or the Indenture Trustee shall be
affected by notice to the contrary.

          SECTION 2.8. Cancellation.

     All Notes surrendered for registration of transfer or exchange or following final payment
shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the
Indenture Trustee and shall be promptly canceled by it. The Issuer may at any time deliver to the
Indenture Trustee for cancellation any Notes previously authenticated and delivered hereunder
which the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be
promptly canceled by the Indenture Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes canceled as provided in this Section 2.8, except as expressly permitted by
this Indenture. All canceled Notes held by the Indenture Trustee may be disposed of in the normal
course of its business or as directed by an Issuer Order.

11

 

          SECTION 2.9. Noteholder Lists.

     The Indenture Trustee shall preserve in as current a form as is reasonably practicable the
most recent list available to it of the names and addresses of Noteholders. In the event the
Indenture Trustee no longer serves as the Note Registrar, the Issuer (or any other obligor upon
the Notes) shall furnish to the Indenture Trustee at least five Business Days before each Payment
Date (and in all events in intervals of not more than six months) and at such other times as the
Indenture Trustee may request in writing a list in such form and as of such date as the Indenture
Trustee may reasonably require of the names and addresses of Noteholders.

          SECTION 2.10. Confidentiality.

     The Agent may, in all cases, distribute information obtained pursuant to, or otherwise in
connection with, this Indenture or the other Transaction Documents to the Purchasers. The parties
hereto agree that the Agent (or Purchasers) may disclose such information (i) to its officers,
directors, members, employees, agents, counsel, accountants, auditors, advisors or representatives
who have an obligation to maintain the confidentiality of such information, (ii) to the extent
such information has become available to the public other than as a result of a disclosure by or
through the Noteholder, Agent or such Purchaser, (iii) to the extent such information was
available to the Noteholder, Agent or such Purchaser on a non-confidential basis prior to its
disclosure to the Noteholder, Agent or such Purchaser in connection with this transaction, (iv)
with the consent of the Servicer, (v) to the extent the Noteholder, Agent or such Purchaser should
be (A) required in connection with any legal or regulatory proceeding or (B) requested by any
Governmental Authority to disclose such information; provided, that, in the case of this
clause (v), the Noteholder, the Agent or such Purchaser, as the case may be, will (unless
otherwise prohibited by law or in connection with regular regulatory reviews) notify the Issuer
and the Servicer of its intention to make any such disclosure as early as practicable prior to
making such disclosure and cooperate with the Servicer in connection with any action to obtain a
protective order with respect to such disclosure; or (vi) in the case of a Structured Purchaser,
to any rating agency rating or proposing to rate any commercial paper issued by such Structured
Purchaser or a related Liquidity Institution.

          SECTION 2.11. Optional Prepayment.

     (a) The Issuer may prepay the Notes on any day, in whole or in part, on five Business Days’
prior written notice to the Agent, the Purchasers and the Indenture Trustee (or such lesser notice
period as shall be acceptable to the Agent, the Purchasers and the Indenture Trustee) (such notice,
a “Prepayment Notice”) in accordance with Section 2.2 of the Note Funding Agreement, provided that
the Issuer pays, subject to Section 3.2(b) hereof, on the date of prepayment, the amounts set forth
in the Note Funding Agreement.

     (b) The applicable Prepayment Notice shall state (i) the principal amount of Notes to be paid
and (ii) the Aggregate Loan Balance, as of the close of business on the day immediately preceding
the date on which such Prepayment Notice is delivered, of the Borrowing Base Loans to be released
under Section 4.7 hereof at the time of the prepayment of the Notes, with the Aggregate Loan
Balance in an amount such that, after giving effect to such release and prepayment, the Outstanding
Note Balance shall not exceed the product of (i) 0.70 and (ii) the

12

 

Aggregate Loan Balance, as of the close of business on the day immediately preceding the date on
which such Prepayment Notice is delivered, of the Borrowing Base Loans minus the Excluded Loan
Balance. Reference is made to Section 4.7 hereof for the conditions to and procedure for the
release of the Timeshare Loans and the Related Security in connection with any such prepayment.

     (c) Upon prepayment of the Notes in accordance with subsection (a) above, the Issuer shall
modify any Hedge Agreements accordingly.

ARTICLE III.

ACCOUNTS; COLLECTION AND APPLICATION OF MONEYS; REPORTS

          SECTION 3.1. Trust Accounts; Investments by Indenture Trustee.

     (a) The Indenture Trustee has established and shall maintain at the Corporate Trust Office in
the name of the Indenture Trustee for the benefit of the Noteholders as provided in this Indenture,
the Trust Accounts, which accounts shall be Eligible Bank Accounts. From time to time, the
Indenture Trustee shall establish, to the extent required under this Indenture, accounts in the
name of the Indenture Trustee for the benefit of the Secured Parties, which accounts shall be
Eligible Bank Accounts.

     Subject
to the further provisions of this Section 3.1(a) hereof, the Indenture Trustee
shall, upon receipt or upon transfer from another account, as the case may be, deposit into such
Trust Accounts all amounts received by it which are required to be deposited therein in accordance
with the provisions of this Indenture. All such amounts and all investments made with such
amounts, including all income and other gain from such investments, shall be held by the Indenture
Trustee in such accounts as part of the Trust Estate as herein provided, subject to withdrawal by
the Indenture Trustee in accordance with, and for the purposes specified in the provisions of,
this Indenture.

     (b) The Indenture Trustee shall assume that any amount remitted to it in respect of the Trust
Estate is to be deposited into the Collection Account pursuant to Section 3.2(a) hereof.

     (c) None of the parties hereto shall have any right of set-off with respect to any Trust
Account, or any investment therein.

     (d) All or a portion of the amounts in any Trust Account shall be invested and reinvested by
the Indenture Trustee pursuant to an Issuer Order in one or more Eligible Investments. Subject to
the restrictions on the maturity of investments set forth in
Section 3.1(f) hereof, each such
Issuer Order may authorize the Indenture Trustee to make the specific Eligible Investments set
forth therein, to make Eligible Investments from time to time consistent with the general
instructions set forth therein, or to make specific Eligible Investments pursuant to instructions
received in writing or by telegraph or facsimile transmission from the employees or agents of the
Issuer, as the case may be, identified therein, in each case in such amounts as such Issuer Order
shall specify.

     (e) In the event that the Issuer shall have failed to give investment directions to the
Indenture Trustee by 9:30 A.M., New York City time on any Business Day on which there may

13

 

be uninvested cash, the Indenture Trustee shall promptly invest and reinvest the funds then in the
designated Trust Account to the fullest extent practicable in those obligations or securities
described in clause (f) of the definition of “Eligible Investments.” All investments made by the
Indenture Trustee shall mature no later than the maturity date
therefor permitted by Section 3.1(f) hereof.

     (f) No investment of any amount held in any Trust Account shall mature later than the Business
Day immediately preceding the Payment Date which is scheduled to occur immediately following the
date of investment. All income or other gains (net of losses) from the investment of moneys
deposited in any Trust Account shall be deposited by the Indenture Trustee in such account
immediately upon receipt.

     (g) Any investment of any funds in any Trust Account and any sale of any investment held in
such accounts, shall be made under the following terms and conditions:

          (i) each such investment shall be made in the name of the Indenture Trustee, in each
case in such manner as shall be necessary to maintain the identity of such investments as
assets of the Trust Estate;

          (ii) any certificate or other instrument evidencing such investment shall be delivered
directly to the Indenture Trustee and the Indenture Trustee shall have sole possession of
such instrument, and all income on such investment; and

          (iii) the proceeds of any sale of an investment shall be remitted by the purchaser
thereof directly to the Indenture Trustee for deposit in the account in which such
investment was held.

	     (h) If any amounts are needed for disbursement from any Trust Account and sufficient
uninvested funds are not collected and available therein to make such disbursement, in the absence
of an Issuer Order for the liquidation of investments held therein in an amount sufficient to
provide the required funds, the Indenture Trustee shall select and cause to be sold or otherwise
converted to cash a sufficient amount of the investments in such account.

	     (i) The Indenture Trustee shall not in any way be held liable by reason of any insufficiency
in any Trust Account resulting from losses on investments made in accordance with the provisions of
this Section 3.1 including, but not limited to, losses resulting from the sale or depreciation in
the market value of such investments (but the institution serving as Indenture Trustee shall at all
times remain liable for its own obligations, if any, constituting part of such investments). The
Indenture Trustee shall not be liable for any investment made by it in accordance with this Section
3.1 on the grounds that it could have made a more favorable investment or a more favorable
selection for sale of an investment.

	     (j) Each party hereto agrees that each of the Trust Accounts constitutes a “securities
account” within the meaning of Article 8 of the UCC and in such capacity Wells Fargo Bank, National
Association shall be acting as a “securities intermediary” within the meaning of 8-102 of the UCC
and that, regardless of any provision in any other agreement, for purposes of the UCC, the State of
New York shall be deemed to be the “securities intermediary’s jurisdiction” under Section 8-110 of
the UCC. The Indenture Trustee shall be the “entitlement holder” within

14

 

the meaning of Section 8-102(a)(7) of the UCC with respect to the Trust Accounts. In furtherance
of the foregoing, Wells Fargo Bank, National Association, acting as a “securities intermediary,”
shall comply with “entitlement orders” within the meaning of Section 8-102(a)(8) of the UCC
originated by the Indenture Trustee with respect to the Trust Accounts, without further consent by
the Issuer. Each item of property (whether investment property, financial asset, security,
instrument or cash) credited to each Trust Account shall be treated as a “financial asset” within
the meaning of Section 8-102(a)(9) of the UCC. All securities or other property underlying any
financial assets credited to each Trust Account shall be registered in the name of the Indenture
Trustee or indorsed to the Indenture Trustee or in blank and in no case will any financial asset
credited to any Trust Account be registered in the name of the Issuer, payable to the order of the
Issuer or specially indorsed to the Issuer. The Trust Accounts shall be under the sole dominion
and control (as defined in Section 8-106 of the UCC) of the Indenture Trustee and the Issuer shall
have no right to close, make withdrawals from, or give disbursement directions with respect to, or
receive distributions from, the Collection Account except in accordance with Section 3.4 hereof.

     (k) In the event that Wells Fargo Bank, National Association, as securities intermediary, has
or subsequently obtains by agreement, by operation of law or otherwise a security interest in the
Trust Accounts or any security entitlement credited thereto, it hereby agrees that such security
interest shall be subordinate to the security interest created by this Indenture and that the
Indenture Trustee’s rights to the funds on deposit therein shall be subject to Section 3.4 hereof.
The financial assets credited to, and other items deposited to the Trust Accounts will not be
subject to deduction, set-off, banker’s lien, or any other right in favor of any person other than
as created pursuant to this Indenture.

          SECTION
3.2. Establishment and Administration of the Accounts.

     (a) Collection Account. The Indenture Trustee has caused to be established and shall
cause to be maintained an account (the “Collection Account”) for the benefit of the Secured
Parties. The Collection Account shall be an Eligible Bank Account initially established at the
Corporate Trust Office of the Indenture Trustee, bearing the following designation “Diamond
Resorts Issuer 2008 LLC — Collection Account, Wells Fargo Bank, National Association, as
Indenture Trustee for the benefit of the Secured Parties”. The Indenture Trustee on behalf of the
Secured Parties shall possess all right, title and interest in all funds on deposit from time to
time in the Collection Account and in all proceeds thereof. The Collection Account shall be under
the sole dominion and control of the Indenture Trustee for the benefit of the Secured Parties as
their interests appear in the Trust Estate. If, at any time, the Collection Account ceases to be
an Eligible Bank Account, the Indenture Trustee shall within two Business Days establish a new
Collection Account which shall be an Eligible Bank Account, transfer any cash and/or any
investments to such new Collection Account and from the date such new Collection Account is
established, it shall be the “Collection Account”. The Indenture Trustee agrees to promptly
deposit any amounts received by it into the Collection Account. Amounts on deposit in the
Collection Account shall be invested in accordance with Section 3.1 hereof. Withdrawals and
payments from the Collection Account will be made on each Payment Date as provided in Sections
3.3, 3.4 and 6.0 hereof.

15

 

     (b) Prepayment. On any date on which the Notes are prepaid as provided in Section
2.11 hereof and Timeshare Loans are released as provided in Section 4.7 hereof, the Indenture
Trustee shall, if so directed by the Issuer and the Agent, accept funds for deposit into the
Collection Account and deposit such funds into the Collection Account; provided, however, that any
funds received for distribution on a prepayment date must be received in the Collection Account
one Business Day prior to such prepayment date. Any such amount deposited into the Collection
Account for a prepayment shall be used to first make the payments due in connection with such
prepayment and release in accordance with the terms hereof on the prepayment date and any
remaining amounts so deposited shall be paid by the Indenture Trustee as the Indenture Trustee is
instructed in writing by the Agent and the Issuer.

          SECTION 3.3. Amendment Closing Date.

     (a) On the Amendment Closing Date, to the extent of Available Funds on deposit in the
Collection Account and based on written direction from the Servicer, the Indenture Trustee shall
pay the Amendment Closing Date Interest Distribution Amount to the parties set forth in such
written direction from the Servicer.

     (b) On the Amendment Closing Date, the Indenture Trustee is hereby directed to withdraw all
amounts on deposit in the Reserve Account (as defined in the Second A/R Indenture) and distribute
the same to the Issuer or at the Issuer’s direction.

          SECTION 3.4. Distributions.

     So long as the Notes have not been accelerated, (x) on each Payment Date (other than the
Stated Maturity and each Payment Date after the Stated Maturity), to the extent of Available Funds
on deposit in the Collection Account and with respect to the payment in item (ix) below only, to
the extent of Available Funds, in all cases, based on the Monthly Servicer Report, and (y) on and
after the Stated Maturity, to the extent of all funds on deposit in the Collection Account, at the
written direction of the Servicer, the Indenture Trustee shall, make the following disbursements
and distributions to the following parties, in the following order of priority:

          (i) to the Indenture Trustee and the Custodian, ratably based on their respective
entitlements, the Indenture Trustee Fee and the Custodial Fee, respectively, plus any
accrued and unpaid Indenture Trustee Fees and Custodial Fees, respectively, with respect to
prior Payment Dates and all expenses incurred and charged by the Indenture Trustee and the
Custodian during the related Due Period (up to an aggregate cumulative total of $60,000
including all expenses reimbursed on prior Payment Dates pursuant to this clause (ii));

          (ii) to the Qualified Hedge Counterparty, any payments due under any Hedge Agreement,
if any, other than any termination payments with respect to which the Qualified Hedge
Counterparty is the “Defaulting Party” or the sole “Affected Party” (as such terms are
defined in the applicable Hedge Agreement);

          (iii) to the Back-Up Servicer, the Back-Up Servicing Fee, plus any accrued and unpaid
Back-Up Servicing Fees with respect to prior Payment Dates plus any Transition

16

 

Expenses incurred during the related Due Period (up to an aggregate cumulative total of $100,000);

          (iv) to the Servicer, the Servicing Fee, plus any accrued and unpaid Servicing Fees with
respect to prior Payment Dates; provided, however, that immediately after receipt of such
Servicing Fee, the Servicer shall remit the Issuer’s portion of any then due and owing Lockbox
Bank Fees to each Lockbox Bank;

          (v) to the Agent, any Agent Fees, plus any accrued and unpaid Agent Fees from prior Payment
Dates;

          (vi) to the Agent, as Noteholder and nominee of the Purchasers, all Non-Usage Fees, plus any
accrued and unpaid Non-Usage Fees from prior Payment Dates;

          (vii) to the Agent, as Noteholder and nominee of the Purchasers, the Interest Distribution
Amount, plus any unpaid Interest Distribution Amount from prior Payment Dates;

          (viii) to the Agent, as Noteholder and nominee of the Purchasers, the Principal Distribution
Amount, plus any unpaid Principal Distribution Amount from prior Payment Dates;

          (ix) except if an Amortization Event shall have occurred, to the Agent, as Noteholder on
behalf of each Non-Extending Purchaser, an amount equal to the Non-Extending Principal Reduction
Amount until each Non-Extending Purchaser’s interest in the Notes has been reduced to zero;

          (x) to the Agent, as Noteholder and nominee of the Purchasers, to the extent applicable,
amounts specified by the Agent as payable pursuant the Note Funding Agreement (including but not
limited to Sections 2.3, 6.1, 6.2, 6.3 and/or 6.5 thereof);

          (xi) to the Qualified Hedge Counterparty, any payments in respect of the Hedge Agreements not
paid in (ii) above;

          (xii) if an Amortization Event shall have occurred, to the Agent, as Noteholder and nominee
of the Purchasers, all remaining Available Funds, until the Outstanding Note Balance has been
reduced to zero;

          (xiii) to the Indenture Trustee, the Custodian and the Back-Up Servicer, any expenses not
paid pursuant to clause (i) or (iii) above, as applicable;

          (xiv) except if an Amortization Event shall have occurred, to the Agent, as Noteholder on
behalf of each Non-Extending Purchaser, an amount equal to 90% of its ratable share (calculated,
without giving effect to payments made on such Payment Date, as a percentage, the numerator of
which is such Non-Extending Purchaser’s Outstanding Note Balance and the denominator of which is
the Outstanding Note Balance of the Notes) of the remaining Available Funds in reduction of each
Non-Extending Purchaser’s interest in the Notes; and

17

 

          (xv) to the Issuer, any remaining amounts.

          SECTION 3.5. Reports to Noteholders.

     On each Payment Date the Indenture Trustee shall account to the Agent, the Issuer and each
Noteholder (i) the portion of payments then being made which represents principal and the amount
which represents interest, and (ii) the amounts on deposit in each Trust Account and identifying
the investments included therein. The Indenture Trustee may satisfy its obligations under this
Section 3.5 by making available electronically the Monthly Servicer Report to the Agent, the
Noteholders, and the Issuer; provided, however, the Indenture Trustee shall have no
obligation to provide such information described in this Section 3.5 until it has received the
requisite information from the Issuer or the Servicer. On or before the 5th day prior to the final
Payment Date with respect to the Notes, the Indenture Trustee shall send notice of such Payment
Date to the Agent and the Noteholders. Such notice shall include a statement that if such Notes
are paid in full on the final Payment Date, interest shall cease to accrue as of the day
immediately preceding such final Payment Date.

     The Indenture Trustee may make available to the Agent, the Noteholders and the Purchasers,
via the Indenture Trustee’s Internet Website, the Monthly Servicer Report available each month
and, with the consent or at the direction of the Issuer, such other information regarding the
Notes and/or the Timeshare Loans as the Indenture Trustee may have in its possession, but only
with the use of a password provided by the Indenture Trustee. The Indenture Trustee will make no
representation or warranties as to the accuracy or completeness of such documents and will assume
no responsibility therefor.

     The
Indenture Trustee’s Internet Website shall be initially located at www.CTSLink.com or at such other address as shall be specified by the Indenture Trustee from time to time in
writing to the Issuer, the Servicer, the Noteholders, the Purchasers
and the Agent. In connection
with providing access to the Indenture Trustee’s Internet Website, the Indenture Trustee may
require registration and the acceptance of a disclaimer. The Indenture Trustee shall not be liable
for the dissemination of information in accordance with this
Indenture.

     The Indenture Trustee shall have the right to change the way Monthly Servicer Reports are
distributed in order to make such distribution more convenient and/or more accessible to the above
parties and the Indenture Trustee shall provide timely and adequate notification to all above
parties regarding any such changes.

     Notwithstanding any other provision of this Indenture, the Indenture Trustee shall comply with
all federal income tax withholding and information requirements with respect to payments of
interest to Noteholders. If the Indenture Trustee does withhold any amount from an interest
payment, pursuant to federal income tax withholding requirements, the Indenture Trustee shall
indicate the amount withheld to the Noteholder.

          SECTION 3.6. Tax Matters. The Indenture Trustee, on behalf of the Issuer,
shall comply with all requirements of the Code and applicable Treasury Regulations and applicable
state and local law with respect to the withholding from any distributions made by it

18

 

to any Noteholder of any applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.

     Annually (and more often, if required by applicable law), the Indenture Trustee shall
distribute to the Noteholders any Form 1099 or similar information returns required by applicable
tax law to be distributed to the Noteholders and the Purchasers. The Paying Agent shall prepare or
cause to be prepared all such information for distribution by the Indenture Trustee to the
Noteholders and the Purchasers.

ARTICLE IV.

THE TRUST ESTATE

          SECTION 4.1. Conveyance of Trust Estate/Acceptance by Indenture Trustee.

     (a) The Indenture Trustee hereby acknowledges the conveyance by the Issuer of the assets
constituting the Trust Estate. The Indenture Trustee shall hold the Trust Estate in trust for the
benefit of the Secured Parties, subject to the terms and provisions hereof. In connection with any
transfer of Timeshare Loans to the Issuer, the Issuer will deliver or cause to be delivered (i) to
the Custodian or the In-Transit Custodian, as the case may be, the Timeshare Loan Files and (ii) to
the Servicer, the Timeshare Loan Servicing Files.

     (b) The
Indenture Trustee shall perform its duties under this Section 4.1 and hereunder on
behalf of the Trust Estate and for the benefit of the Secured Parties in accordance with the terms
of this Indenture and applicable law and, in each case, taking into account its other obligations
hereunder, but without regard to:

     (i) any relationship that the Indenture Trustee or any Affiliate of the Indenture
Trustee may have with an Obligor;

     (ii) the ownership of any Note by the Indenture Trustee or any Affiliate of the
Indenture Trustee;

     (iii) the Indenture Trustee’s right to receive compensation for its services
hereunder or with respect to any particular transaction; or

     (iv) the ownership, or holding in trust for others, by the Indenture Trustee of any
other assets or property.

          SECTION 4.2. Acquisition of Timeshare Loans.

     The Issuer covenants that, except as provided in Section 4.3 hereof, it shall only acquire
Timeshare Loans in accordance with the provisions of the Sale Agreement and, without limiting the
generality of the Granting Clause, upon any such acquisition, such Timeshare Loans shall be deemed
to be a part of the Trust Estate.

          SECTION 4.3. Additional Timeshare Loans.

19

 

     (a) Subject to the limitations and conditions specified in this Section 4.3, the Issuer
may from time to time identify additional Eligible Timeshare Loans (“Additional Timeshare Loans”)
to be acquired by or Granted to the Issuer on a Transfer Date. Such Additional Timeshare Loans
and the Related Security shall be included in the Trust Estate as provided herein.

     (b) The acquisition or Grant of the Additional Timeshare Loans shall be subject to the
satisfaction of the following conditions:

          (i) at least two Business Days preceding the proposed Transfer Date, the Issuer shall have
delivered to the Agent a schedule of such proposed Additional Timeshare Loans;

          (ii) the Issuer and the Servicer shall execute an Additional Timeshare Loan Supplement
substantially in the form of Exhibit H hereto;

          (iii) the Commitment Expiration Date shall not have occurred and no Amortization Event,
Servicer Event of Default, Event of Default or Default shall have occurred and be continuing or
would occur as a result of the addition of the Timeshare Loans;

          (iv) on or prior to the Transfer Date, the In-Transit Custodian or the Custodian, as
applicable, shall have possession of the related Timeshare Loan File and shall have delivered a
Trust Receipt therefor in accordance with the provisions of the In-Transit Custodial Agreement or
the Custodial Agreement, as applicable;

          (v) the Issuer shall have taken any actions necessary or advisable to maintain the Indenture
Trustee’s perfected security interest in the Trust Estate for the benefit of the Noteholders; and

          (vi) each Additional Timeshare Loan shall be an Eligible Timeshare Loan.

     SECTION 4.4. Tax Treatment.

     (a) The provisions of this Indenture shall be construed in furtherance of the Intended Tax
Characterization (as defined below). The conveyance by the Issuer of the Timeshare Loans to the
Indenture Trustee shall not constitute and is not intended to result in an assumption by the
Indenture Trustee, any Noteholder or Purchaser of any obligation of the Issuer or the Servicer to
the Obligors, the insurers under any insurance policies, or any other Person in connection with the
Timeshare Loans.

     (b) It is the intention of the parties hereto that, with respect to all taxes, the Notes will
be treated as indebtedness to the Noteholders secured by the Timeshare Loans (the “Intended Tax
Characterization”). The Issuer, the Servicer and the Indenture Trustee, by entering into this
Indenture, and each Noteholder by the purchase of a Note, agree to report such transactions for
purposes of all taxes in a manner consistent with the Intended Tax Characterization, unless
otherwise required by applicable law. If the Notes are not properly treated as indebtedness with
respect to all taxes, then the parties intend that they shall constitute interests in a partnership
for such purposes and, in that regard, agree that no election to treat the Issuer in any part as a
corporation under Treasury Regulation section 301.7701-3 shall be made by any Person.

20

 

     (c) The Issuer, the Servicer and the Back-Up Servicer shall take no action inconsistent with
the Indenture Trustee’s interest in the Timeshare Loans and shall indicate or shall cause to be
indicated in its books and records held on its behalf that each Timeshare Loan constituting the
Trust Estate has been assigned to the Indenture Trustee on behalf of the Noteholders.

     SECTION 4.5. Further Action Evidencing Assignments.

     (a) The Issuer and the Servicer each agrees that, from time to time, at its respective
expense, it will promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or appropriate, or that the Servicer or the Indenture Trustee
or Agent may reasonably request, in order to perfect, protect or more fully evidence the security
interest in the Timeshare Loans or to enable the Indenture Trustee to exercise or enforce any of
its rights hereunder. Without limiting the generality of the foregoing, the Issuer will, without
the necessity of a request or upon the request of the Servicer or the Indenture Trustee, execute
and file (or cause to be executed and filed) such financing or continuation statements, or
amendments thereto or assignments thereof, and such other instruments or notices, as may be
necessary or appropriate to create and maintain in the Indenture Trustee a first priority perfected
security interest, at all times, in the Trust Estate, including, without limitation, recording and
filing UCC-1 financing statements, amendments or continuation statements prior to the effective
date of any change of the name, identity or structure or relocation of its chief executive office
or its jurisdiction of formation or any change that would or could affect the perfection pursuant
to any financing statement or continuation statement or assignment previously filed or make any
UCC-1 or continuation statement previously filed pursuant to this Indenture seriously misleading
within the meaning of applicable provisions of the UCC (and the Issuer shall give the Indenture
Trustee at least 30 Business Days prior notice of the expected occurrence of any such
circumstance). The Issuer shall deliver promptly to the Indenture Trustee file-stamped copies of
any such filing.

     (b) (i) The Issuer hereby grants to each of the Servicer and the Indenture Trustee a power of
attorney to execute and file all documents including, but not limited to assignments of Mortgage,
UCC financing statements, amendments or continuation statements, on behalf of the Issuer as may be
necessary or desirable to effectuate the foregoing and any recordation pursuant to Section 5.18
hereof and (ii) the Servicer hereby grants to the Indenture Trustee a power of attorney to execute
and file all documents on behalf of the Servicer as may be necessary or desirable to effectuate the
foregoing; provided, however, that such grant shall not create a duty on the part
of the Indenture Trustee or the Servicer to file, prepare, record or monitor, or any responsibility
for the contents or adequacy of, any such documents.

     SECTION 4.6. Repurchase and Substitution of Timeshare Loans.

     (a) Mandatory Repurchase and Substitution of Timeshare Loans for Breach of Representation
or Warranty. If at any time, any party hereto obtains knowledge, discovers, or is notified by
any other party hereto, that any of the representations and warranties of the Depositor in the Sale
Agreement were incorrect as of the date such representations and warranties were made, then the
party discovering such defect, omission, or circumstance shall promptly notify the other parties to
this Indenture and the Depositor. In the event any representation or warranty of the Depositor is
incorrect as of the date such representation or warranty was made and materially

21

 

and adversely affects the value of a Timeshare Loan or the interests of the Noteholders or
Purchasers therein, then the Issuer and the Indenture Trustee shall require the Depositor, within
30 days after the date it is first notified of, or otherwise discovers such breach, to eliminate
or otherwise cure in all material respects the circumstance or condition which has caused such
representation or warranty to be incorrect or either: (i) repurchase such Defective Timeshare Loan
at the Repurchase Price or (ii) provide one or more Qualified Substitute Timeshare Loans and pay
the Substitution Shortfall Amount, if any; provided, that to the extent an Amortization
Event shall have occurred and is continuing, the Depositor shall use its best efforts to
repurchase each Timeshare Loan instead of replacing such Timeshare Loan. The Indenture Trustee is
hereby appointed attorney-in-fact, which appointment is coupled with an interest and is therefore
irrevocable, to act on behalf and in the name of the Issuer to enforce the Depositor’s repurchase
or substitution obligations if the Depositor has not complied with its repurchase or substitution
obligations under the Sale Agreement within 15 days of the end of the aforementioned 30 day
period.

     (b) Optional Repurchase and Substitution of 60-Day Plus Delinquent Loans. On any date,
pursuant to the Sale Agreement, DFHC shall have the option, but not the obligation, to either: (i)
repurchase a 60-Day Plus Delinquent Loan from the Issuer for a price equal to the Repurchase Price
therefor, or (ii) substitute one or more Qualified Substitute Timeshare Loans for a 60-Day Plus
Delinquent Loan and pay the related Substitution Shortfall Amount, if any.

     (c) [RESERVED]

     (d) Limitation on Optional Repurchases and Substitutions of 60-Day Plus Delinquent
Loans. The aggregate Cut-Off Date Loan Balance of 60-Day Plus Delinquent Loans that may be
repurchased and substituted pursuant to Section 4.6(b) hereof shall be limited on any date to 15%
and 20%, respectively of the highest aggregate Loan Balance of all Timeshare Loans owned by the
Issuer since the Amendment Closing Date, less the aggregate of the Cut-Off Date Loan Balances of
all 60-Day Plus Delinquent Loans previously repurchased or substituted, as applicable, pursuant to
Section 4.6(b) hereof since the Amendment Closing Date. The prepayment of a Timeshare Loan
resulting from an Obligor electing to enter into an Upgraded Timeshare Loan shall not be considered
an exercise by DFHC of the repurchase or substitution option described in Section 4.6(b) hereof.

     (e) Repurchase Prices and Substitution Shortfall Amounts. The Issuer and the Indenture
Trustee shall direct that the Depositor and DFHC to remit all amounts in respect of Repurchase
Prices and Substitution Shortfall Amounts to the Indenture Trustee for deposit in the Collection
Account. In the event that more than one Timeshare Loan is substituted pursuant to any of Sections
4.4(a) through 4.4(c) hereof on any Substitution Date, the Substitution Shortfall Amounts and the
Loan Balances of Qualified Substitute Timeshare Loans shall be calculated on an aggregate basis for
all substitutions made on such Substitution Date.

     (f) Schedule of Timeshare Loans. The Issuer shall cause the Depositor or DFHC, as
applicable, to provide the Indenture Trustee on any date on which a Timeshare Loan is repurchased
or substituted, with a revised Schedule of Timeshare Loans to the Sale Agreement reflecting the
removal of Timeshare Loans and subjecting any Qualified Substitute Timeshare Loans to the
provisions thereof.

22

 

     (g) Officer’s Certificate. No substitution of a Timeshare Loan shall be effective
unless the Issuer and the Indenture Trustee shall have received an Officer’s Certificate from the
Depositor or DFHC, as applicable, indicating that the new Timeshare Loan meets all the criteria of
the definition of “Qualified Substitute Timeshare Loan” and that the Timeshare Loan Files for such
Qualified Substitute Timeshare Loan have been delivered to the Custodian.

     SECTION 4.7. Release of Lien.

     (a) The Issuer shall be entitled to obtain a release from the Lien of the Indenture for any
Timeshare Loan repurchased or substituted pursuant to Section 4.6 hereof: (i) in the case of any
repurchase, after payment of the Repurchase Price of the Timeshare Loan, or (ii) in the case of any
substitution, after payment of the applicable Substitution Shortfall Amount, if any, and the
delivery of the Timeshare Loan Files for the related Qualified Substitute Timeshare Loan to the
Custodian.

     (b) The Issuer shall be entitled to obtain a release from the Lien of the Indenture for any
Timeshare Loan which has been paid in full or for which the assets securing such Timeshare Loan
have been liquidated and remarketed in accordance with the Servicing Standard and all related
recoveries have been deposited to the Collection Account.

     (c) If the Issuer exercises its right to prepay the Notes in whole or in part as provided in
Section 2.11 hereof, the Issuer shall notify the Agent and the Indenture Trustee in writing of the
prepayment date and principal amount of Notes to be prepaid on the prepayment date and the amount
of interest and other amounts due and payable on such date in accordance with this Indenture and
the Note Funding Agreement. On the prepayment date, upon receipt by the Indenture Trustee of all
amounts to be paid to the Noteholders in accordance with this Indenture and the Note Funding
Agreement as a result of such prepayment and the satisfaction of the conditions set forth in the
following paragraphs, then, the Indenture Trustee and the Custodian or the In-Transit Custodian, as
applicable, shall release from the Lien of this Indenture those Timeshare Loans and the Related
Security, all monies due or to become due with respect thereto and all Collections with respect
thereto from and including the last day of the Due Period immediately preceding the date of such
release which the Indenture Trustee and the Custodian or the In-Transit Custodian, as applicable,
are directed to release as described in the following paragraph.

     The Issuer shall provide to the Indenture Trustee and the Custodian or the In-Transit
Custodian, as applicable, a list of the Timeshare Loans which are to be released, shall direct the
Custodian or the In-Transit Custodian, as applicable, to release such Timeshare Loan Files in
accordance with the Custodial Agreement or In-Transit Custodial Agreement, as applicable, and
shall direct the Servicer to delete such Timeshare Loans from the Schedule of Timeshare Loans.

     In addition to receipt by the Indenture Trustee of the principal amount of the Notes to be
prepaid, the interest thereon and other amounts due and payable in connection with such prepayment
and the list of Timeshare Loans to be released, the following conditions shall be met before the
Lien is released under this Section 4.7:

23

 

          (i) except with the prior written consent of the Agent and the Required Purchasers, after
giving effect to such release, no Default, Servicer Event of Default, Amortization Event or Event
of Default shall exist;

          (ii) as determined by the Agent and the Required Purchasers, after giving effect to such
release, the remaining pool of Timeshare Loans in the Trust Estate meet all of the eligibility
criteria set forth in the Transaction Documents; and

          (iii) as determined by the Agent and the Required Purchasers, the Timeshare Loans to be
released from the Lien of this Indenture were not selected in a manner involving any selection
procedures materially adverse to the Noteholders.

     (d) In connection with (a), (b) and (c) above, the Indenture Trustee will execute and deliver
as directed in writing such endorsements and assignments as are provided to it by the Depositor or
the Issuer, in each case without recourse, representation or warranty, as shall be necessary to
vest in the Depositor the legal and beneficial ownership of each repurchased or substituted
Timeshare Loan being released pursuant to this Section 4.7. The Custodian or the In-Transit
Custodian, as applicable, shall release the related Timeshare Loan Files upon receipt of a Request
for Release from the Servicer, substantially in the form of Exhibit B to the Custodial
Agreement or the In-Transit Custodial Agreement, as applicable.

     (e) In connection with the release of Timeshare Loans as set forth in this Section 4.7, the
Issuer and the Servicer shall cooperate in providing the Agent or any Purchaser with reasonably
requested information regarding the Trust Estate.

     SECTION 4.8. Appointment of In-Transit Custodian and Custodian.

          The Indenture Trustee may appoint one or more custodians to hold all of the Timeshare Loan
Files as agent for the Indenture Trustee. Each custodian shall be a depository institution
supervised and regulated by a federal or state banking authority or such other entity approved by
the Agent, shall have combined capital and surplus of at least $10,000,000, shall be qualified to
do business in the jurisdiction in which it holds any Timeshare Loan File and shall not be the
Issuer or an Affiliate of the Issuer. The initial Custodian shall be Wells Fargo Bank, National
Association, pursuant to the terms of the Custodial Agreement. The initial In-Transit Custodian
shall be First American Title Insurance Company, pursuant to the terms of the In-Transit Custodial
Agreement. The Custodial Fees and expenses shall be paid as provided in Section 3.4 hereof. The
In-Transit Custodial Fees shall be paid as provided for in the In-Transit Custodial Agreement.

     SECTION 4.9. Sale of Timeshare Loans.

          The parties hereto agree that none of the Timeshare Loans in the Trust Estate may be sold or
disposed of in any manner except as expressly provided for herein.

ARTICLE V.

SERVICING OF TIMESHARE LOANS

     SECTION 5.1. Appointment of Servicer; Servicing Standard.

24

 

          Subject
to the terms and conditions herein, the Issuer hereby confirms the
appointment of DFS as the initial Servicer hereunder. The Servicer shall service and administer the Timeshare Loans
and perform all of its duties hereunder in accordance with applicable law, the Collection Policy,
the terms of the respective Timeshare Loans and, to the extent consistent with the foregoing, in
accordance with the customary and usual procedures employed by institutions servicing timeshare
loans secured by timeshare estates, or if a higher standard, the highest degree of skill and
attention that the Servicer exercises with respect to comparable assets that the Servicer services
for itself or its Affiliates (the “Servicing Standard”).

     SECTION 5.2. Payments on the Timeshare Loans.

     (a) The Servicer shall, in a manner consistent with the Collection Policy attached hereto as
Exhibit C, direct or otherwise cause the Obligors as to all Timeshare Loans (other than
Obligors paying by means of credit cards) to mail or deposit by electronic means all Receivables
and other payments due thereunder, or to make or credit such payments pursuant to automated
clearing house debit and credit payments or credit card processing, payment, remittance and
collection agreements, directly to the Servicer’s existing centralized collection lockbox account
(the “Centralized Lockbox Account”), which Centralized Lockbox Account shall consist of one or more
accounts maintained by the Servicer at an Approved Financial Institution (each, a “Lockbox Bank”),
acting with the consent, or at the direction, of the Agent (or, if the Indenture Trustee shall have
so required pursuant to Section 5.4(c) hereof, to a Lockbox Bank maintained by the Indenture
Trustee for the benefit of the Noteholders). At all times, the Centralized Lockbox Account shall
be subject to a Deposit Account Control Agreement in form and substance approved by the Agent.
The Centralized Lockbox Account shall initially be maintained at Wachovia Bank, N.A.

     (b) Within one Business Day after receipt of any Receivables or other payments due under the
Timeshare Loans in the Centralized Lockbox Account, the Servicer shall determine and segregate such
Receivables and other payments from any monies or other items in the Centralized Lockbox Account
that do not relate to Receivables or other payments made on the Timeshare Loans, and within one
Business Day thereafter the Servicer shall remit such Receivables and other payments to the
Collection Account. The Servicer is not required to remit any Miscellaneous Payments or Processing
Charges, to the extent received, to the Collection Account.

     (c) Subject to Section 5.2(h) hereof, if, notwithstanding such instructions as provided in
Section 5.2(a) hereof, any such Receivables or other payments are delivered to the Depositor, the
Servicer or to any other Diamond Resorts Entity (an “Erroneous Payee”), the Depositor shall (or
cause the Servicer to) deposit such Receivables or other payments into the Collection Account
within two Business Days following the receipt. Subject to Section 5.2(h) hereof, in the event the
Servicer receives any Receivables or other payments directly from or on behalf of any Obligors, the
Servicer shall receive all such Receivables and other payments in trust for the sole and exclusive
benefit of the Indenture Trustee, and the Servicer shall deliver to the Indenture Trustee for
deposit in the Collection Account all such Receivables and other payments (in the form so received
by the Servicer) within two Business Days, unless the Indenture Trustee shall have notified the
Servicer to deliver such Receivables and other payments elsewhere, in which event such Receivables
and other payments (in the form received) shall be endorsed by the

25

 

Depositor to the Indenture Trustee and delivered to such account as the Indenture Trustee shall
specify within two Business Days of the Servicer’s receipt thereof.

     (d) All interest earned on funds received with respect to Timeshare Loans and any Processing
Charges deposited in accounts of the Servicer or in the Centralized Lockbox Account prior to
deposit to the Collection Account pursuant to Section 5.2(b) hereof shall be deemed to be
additional compensation to the Servicer for the performance of its duties and obligations
hereunder.

     (e) On the Closing Date, the Amendment Closing Date, each Funding Date and each Transfer Date,
the Servicer shall deposit to the Collection Account all Receivables and other payments collected
and received in respect of the Timeshare Loans (other than the amounts described in Section 5.2(d)
hereof) after the related Cut-Off Date.

     (f) Subject to Sections 5.2(b), (c), (d), (g) and (h) hereof, within two Business Days of
receipt, the Servicer shall segregate all Receivables and other payments in respect of the
Timeshare Loans and shall remit such amounts to the Collection Account. In the event that
Miscellaneous Payments or Processing Charges are erroneously deposited in the Collection Account,
the Indenture Trustee shall pay such funds to the Servicer prior to any distributions under Section
3.4 hereof on the next Payment Date as instructed by the Servicer.

     (g) The Servicer shall net out Liquidation Expenses from any Liquidation Proceeds on 60-Day
Plus Delinquent Loans prior to deposit of the net Liquidation Proceeds into the Collection Account
pursuant to Section 5.2(f) hereof. To the extent that the Servicer shall subsequently recover any
portion of such Liquidation Expenses from the related Obligor, the Servicer shall deposit such
amounts into the Collection Account in accordance with Section 5.2(f) hereof.

     (h) With respect to all prepayments in respect of Eligible In-Transit Loans, the Servicer
shall enter into a Master Escrow Agreement with the Title Escrow Agent for the benefit of the Agent
on behalf of the Purchasers. The Master Escrow Agreement shall provide that the Title Escrow Agent
shall remit all amounts received with respect to Eligible In-Transit Loans to the Collection
Account.

     SECTION 5.3. Duties and Responsibilities of the Servicer.

     (a) In addition to any other customary services which the Servicer may perform or may be
required to perform hereunder, the Servicer shall perform or cause to be performed through
sub-servicers, the following servicing and collection activities in accordance with the Servicing
Standard:

     (i) perform standard accounting services and general record keeping services with
respect to the Timeshare Loans;

     (ii) respond to telephone or written inquiries of Obligors concerning the
Timeshare Loans;

26

 

     (iii) keep Obligors informed of the proper place and method for making payment with respect
to the Timeshare Loans;

     (iv) contact Obligors to effect collection and to discourage delinquencies in the payment of
amounts owed under the Timeshare Loans and doing so by any lawful means, including but not limited
to (A) mailing of routine past due notices, (B) preparing and mailing collection letters, (C)
contacting delinquent Obligors by telephone to encourage payment, and (D) mailing of reminder
notices to delinquent Obligors;

     (v) report tax information to Obligors and taxing authorities to the extent required by law;

     (vi) take such other action as may be necessary or appropriate in the discretion of the
Servicer for the purpose of collecting and transferring to the Indenture Trustee for deposit into
the Collection Account all payments received by the Servicer or remitted to any of the Servicer’s
accounts in respect of the Timeshare Loans (except as otherwise expressly provided herein), and to
carry out the duties and obligations imposed upon the Servicer pursuant to the terms of this
Indenture;

     (vii)
in the Servicer’s sole discretion, acquire Nonfinancial Assets on behalf of the Issuer
and to be held as part of the Trust Estate for such period of time as the Servicer deems it
advisable to do so, and to manage, lease or rent, encumber and sell
such Nonfinancial Assets, so
long as the Servicer acts under the reasonable belief that it is doing so in the best interests of
the Issuer, and to deposit any Retained Asset Proceeds in the Collection Account;

     (viii) remarketing Timeshare Interests;

     (ix) arranging for Liquidations of Timeshare Properties and Right-to-Use Interests related to
60-Day Plus Delinquent Loans;

     (x) disposing of Timeshare Interests related to the Timeshare Loans whether following
repossession, foreclosure or otherwise;

     (xi) to the extent requested by the Indenture Trustee, use reasonable best efforts to enforce
the purchase and substitution obligation of the Depositor under the Sale Agreement;

     (xii) not modify, waive or amend the terms of any Timeshare Loan unless a default on such
Timeshare Loan has occurred or is imminent or unless such modification, amendment or waiver will
not: (i) alter the interest rate on or the principal balance of such Timeshare Loan, (ii) shorten
the final maturity of, lengthen the timing of payments of either principal or interest under, or
any other terms of, such Timeshare Loan, (iii) adversely affect the Timeshare Interest underlying
such Timeshare Loan or (iv) reduce materially the likelihood that payments of interest and
principal on such Timeshare Loan will be made when due; provided, however, that the
Servicer may make the modifications, amendments or waivers described in clause (i) through (iv)
above, so long as such modifications, amendments or waivers are not made with respect to more than

27

 

2% of the Timeshare Loans by Aggregate Loan Balance as of the end of the calendar month
prior to such modification, amendment or waiver; provided, further, the Servicer
may grant an extension of the final maturity of a Timeshare Loan if the Servicer, in its
reasonable discretion, determines that (i) such Timeshare Loan is in default or default on
such Timeshare Loan is likely to occur in the foreseeable future, and (ii) the value of
such Timeshare Loan will be enhanced by such extension, provided that the Servicer will not
(a) grant more than one extension per calendar year with respect to a Timeshare Loan, (b)
grant an extension for more than one calendar month with respect to a Timeshare Loan in any
calendar year or (c) grant an extension that would cause the stated maturity of a Timeshare
Loan to be later than 24 months prior to the Stated Maturity;

     (xiii) work with Obligors in connection with any transfer of ownership of a Timeshare
Interest by an Obligor to another Person and the Servicer may consent to the assumption by
such Person of the Timeshare Loan related to such Timeshare Interest; provided,
however, in connection with any such assumption, the rate of interest borne by, the
maturity date of, the principal amount of, the timing of payments of principal and interest
in respect of, and all other material terms of, the related Timeshare Loan shall not be
changed other than as permitted in (xii) above; and

     (xiv) deliver such information and data to the Back-Up Servicer as is required under
the Back-Up Servicing Agreement.

     (b) For so long as a Diamond Resorts Entity controls the Resorts, the Servicer shall use
commercially reasonable best efforts to maintain or cause to maintain the Resorts in good repair,
working order and condition (ordinary wear and tear excepted).

     (c) For so long as a Diamond Resorts Entity controls the Resorts, the manager, related
management contract and master marketing and sale contract (if applicable) for each Resort at all
times shall be reasonably satisfactory to the Agent. For so long as a Diamond Resorts Entity
controls the Association for a Resort, and a Diamond Resorts Entity is the manager, (i) if an
amendment or modification to the related management contract and master marketing and sale contract
materially and adversely affects the Noteholders or the Purchasers, then it may only be amended or
modified with the prior written consent of the Agent, which consent shall not be unreasonably
withheld or delayed and (ii) if an amendment or modification to the related management contract and
master marketing and sale contract does not materially and adversely affect the Noteholders or the
Purchasers, the Servicer shall send a copy of such amendment or modification to the Agent with the
Monthly Report to be delivered subsequent to the effective date of
such amendment or modification.

     (d) In the event any Lien (other than a Permitted Lien) attaches to any Timeshare Loan or
related collateral from any Person claiming from and through a Diamond Resorts Entity which
materially adversely affects the Issuer’s interest in such Timeshare Loan, the Servicer shall,
within the earlier to occur of ten Business Days after receiving notice of such attachment or the
respective lienholders’ action to foreclose on such lien, either (i) cause such Lien to be released
of record, (ii) provide the Indenture Trustee with a bond in accordance with the applicable laws of
the state in which the Timeshare Property is located, issued by a corporate

28

 

surety acceptable to the Agent, in an amount and in form reasonably acceptable to the Agent or
(iii) provide the Agent with such other security as the Agent may reasonably require.

     (e) The Servicer shall: (i) promptly notify the Indenture Trustee, the Purchasers and the
Agent of (A) receiving notice of any claim, action or proceeding which may be reasonably expected
to have a material adverse effect on the Trust Estate, or any material part thereof, and (B) any
action, suit, proceeding, order or injunction of which Servicer becomes aware after the date hereof
pending or threatened against or affecting Servicer or any Affiliate which may be reasonably
expected to have a material adverse effect on the Trust Estate or the Servicer’s ability to service
the same; (ii) at the request of Indenture Trustee with respect to a claim or action or proceeding
which arises from or through the Servicer or one of its Affiliates, appear in and defend, at
Servicer’s expense, any such claim, action or proceeding which would have a material adverse effect
on the Timeshare Loans or the Servicer’s ability to service the same; and (iii) comply in all
respects, and shall cause all Affiliates to comply in all respects, with the terms of any orders
imposed on such Person by any governmental authority the failure to comply with which would have a
material adverse effect on the Timeshare Loans or the Servicer’s
ability to service the same.

     (f) Except as contemplated by the Transaction Documents, the Servicer shall not, and shall not
permit any Person to, encumber, pledge or otherwise grant a Lien (other than in the normal course
of business) or security interest in and to the Reservation System (including, without limitation,
all hardware, software and data in respect thereof) and furthermore agrees, and shall use
commercially reasonable efforts to keep the Reservation System operational, not to dispose of the
same and to allow the Collection the use of, and access to, the Reservation System.

     (g) The Servicer shall (i) notify the Agent and each of the Purchasers ten days prior to any
material amendment or change to the Collection Policy or the Underwriting Guidelines and (ii)
obtain the Agent’s prior written consent (which consent will not be unreasonably withheld or
delayed) for any material amendment or change; provided, that the Servicer may immediately
implement any changes (and provide notice to the Agent subsequent thereto) as may be required under
applicable law from time to time upon the reasonable determination of the Servicer; and
provided, further, that the Servicer shall deliver a copy of any non-material
amendments or changes to the Collection Policy or the Underwriting Guidelines to the Agent, each of
the Purchasers and the Indenture Trustee with the Monthly Servicer Report to be delivered
subsequent to the effective date of such amendments or changes.

     (h) In connection with the Servicer’s duties under (vii), (viii), (ix) and (x) of subsection
(a) above, the Servicer will undertake such duties in the ordinary course in a manner similar and
consistent with (or better than) the manner in which the Servicer sells or markets other Timeshare
Interests it or its Affiliates owns. In addition, in connection with the Servicer’s duties under
(viii), (ix) and (x) of subsection (a) above, the Servicer agrees that it shall remarket and sell
the Timeshare Interests related to the Timeshare Loans owned by the Issuer before it remarkets and
sells Timeshare Interests of the same type owned by the Servicer or any of the Servicer’s
Affiliates (other than Affiliates engaged primarily in Receivables Securitizations).

29

 

     (i) To the extent that any Timeshare Interest related to a 60-Day Plus Delinquent Loan is not
a Retained Asset and is remarketed, or that a Retained Asset is subsequently remarketed or
otherwise sold, the Servicer agrees that it shall require that Liquidation Proceeds be in the form
of cash only.

     (j) The Servicer agrees that, with respect to Timeshare Loan Files related to Eligible
In-Transit Loans, it shall (i) maintain and hold such Timeshare Loan Files for the exclusive
benefit of the Indenture Trustee on behalf of the Noteholders and (ii) shall deliver such
Timeshare Loan Files to the In-Transit Custodian as soon as practicable. Except as approved by the
Agent, the Servicer shall not deliver possession of such Timeshare Loan Files to any Person other
than the In-Transit Custodian.

     (k) Notwithstanding any discretion provided in the Collection Policy, the initial Servicer
hereby covenants that, with respect to a Timeshare Interest underlying a Right-to-Use Loan that is
181 days past due or a Right-to-Use Loan that is less than 181 days past due but for the Servicer
has determined should be “charged-off”, it will re-market such Timeshare Interest within 30 days
from such 181st date or date of determination and deposit the proceeds therefrom into
the Collection Account within such 30-day time period; provided, however, that the foregoing
30-day requirement shall not apply to Right-to-Use Loans that are subject to the (1) the
Servicemembers Civil Relief Act of 2003, (2) where the related Obligor is a debtor in a bankruptcy
case, (3) where the related Obligor has demanded a UCC foreclosure or (4) where the related
Obligor is a Foreign Obligor (other than Canadian Obligors).

     (l) Notwithstanding any discretion provided in the Collection Policy, the initial Servicer
hereby covenants that, with respect to a Timeshare Property underlying a Mortgage Loan that is 181
days past due or a Mortgage Loan that is less than 181 days past due but for the Servicer has
determined should be “charged-off”, it will forward the Mortgage Loan to outside legal counsel to
commence foreclosure proceedings and it will re-market such Timeshare Property within 30-days
following completion of foreclosure date and deposit the proceeds therefrom into the Collection
Account within such 30-day time period.

     SECTION 5.4. Servicer Events of Default.

     (a) If any Servicer Event of Default shall have occurred and not been waived hereunder, the
Indenture Trustee may, and upon notice from the Agent shall, terminate, on behalf of the
Noteholders, by notice in writing to the Servicer, all of the rights and obligations of the
Servicer, as Servicer under this Indenture.

     (b) If any Authorized Officer of the Servicer shall have knowledge of the occurrence of a
default by the Servicer hereunder, the Servicer shall promptly notify the Indenture Trustee, the
Issuer, the Agent and each Purchaser, and shall specify in such notice the action, if any, the
Servicer is taking in respect of such default. Unless consented to by the Agent, neither the Issuer
nor the Indenture Trustee may waive any Servicer Event of Default.

     (c) If any Servicer Event of Default shall have occurred and not been waived hereunder, the
Indenture Trustee shall direct and the Servicer shall cause to be delivered notices to the Obligors
related to the Timeshare Loans instructing such Obligors to remit payments in

30

 

respect thereof to a lockbox account specified by the Indenture Trustee, such lockbox to be
maintained as an Eligible Bank Account for the benefit of the Noteholders. The Indenture Trustee
shall cause to be established a lockbox account in accordance with Section 3.1 hereof.

     SECTION 5.5. Accountings; Statements and Reports.

     (a) Monthly Servicer Report. Not later than the fourth Business Day preceding a
Payment Date, the Servicer shall deliver to the Issuer, the Indenture Trustee, the Back-Up
Servicer, the Qualified Hedge Counterparty, each Purchaser and the Agent a report (the “Monthly
Servicer Report”) substantially in the form of Exhibit D hereto, detailing certain activity
relating to the Timeshare Loans. The Monthly Servicer Report shall be completed with the
information specified therein for the related Due Period and shall contain such other information
as may be reasonably requested by the Issuer, the Indenture Trustee, any Purchaser or the Agent in
writing at least five Business Days prior to the date on which the Servicer is required to deliver
the Monthly Servicer Report. Each such Monthly Servicer Report shall be accompanied by an
Officer’s Certificate of the Servicer in the form of Exhibit E hereto, certifying the accuracy of
the computations reflected in such Monthly Servicer Report. The Servicer agrees to consult and
cooperate with the Agent in the preparation of the Monthly Servicer Report.

     (b) Certification as to Compliance. The Servicer shall deliver to the Issuer, the
Indenture Trustee, the Agent and each Purchaser, an Officer’s Certificate on or about December 31
of each year commencing in 2010: (i) to the effect that a review of the activities of the
Servicer’s performance under this Indenture during 2010 and each following year for so long as the
Indenture is in effect has been made under the supervision of the officers executing such Officer’s
Certificate with a view to determining whether during such period the Servicer had performed and
observed all of its obligations under this Indenture, and either (A) stating that based on such
review no Servicer Event of Default is known to have occurred and is continuing, or (B) if such a
Servicer Event of Default is known to have occurred and is continuing, specifying such Servicer
Event of Default and the nature and status thereof, and (ii) describing in reasonable detail to his
knowledge any occurrence in respect of any Timeshare Loan which would be of adverse significance to
a Person owning such Timeshare Loan.

     (c) Annual Accountants’ Reports. Within 120 days of the Servicer’s fiscal year end
commencing with the end of the 2010 fiscal year, the Servicer shall:

     (i) cause a firm of independent public accountants or other diligence firm approved by
the Agent to furnish a certificate or statement (and the Servicer shall provide a copy of
such certificate or statement to the Issuer, the Indenture Trustee and the Agent), to the
effect that such firm has performed certain procedures with respect to the Servicer’s
servicing controls and procedures for the previous fiscal year and that, on the basis of
such firms’ procedures, conducted substantially in compliance with standards established by
the American Institute of Certified Public Accountants, nothing has come to the attention of
such firm indicating that the Servicer has not complied with the minimum servicing standards
identified in the Uniform Single Attestation Program for Mortgage Bankers established by the
Mortgage Bankers Association of America

31

 

     (“USAP”), except for such significant exceptions or errors that, in the opinion of such
firm, it is required to report;

     (ii) cause a firm of independent public accountants or other diligence firm approved
by the Agent to furnish a certificate or statement to the Issuer, the Indenture Trustee and
the Agent, to the effect that such firm has (A) read this Indenture, (B) has performed
certain procedures, in accordance with USAP, with respect to the records and calculations
set forth in the Monthly Servicer Reports delivered by the Servicer during the reporting
period and certain specified documents and records relating to the servicing of the
Timeshare Loans and the reporting requirements with respect thereto and (C) on the basis of
such firm’s procedures, certifies that except for such exceptions as such firm shall
believe immaterial and such other exceptions as shall be set forth in such statement, (1)
the information set forth in such Monthly Servicer Reports was correct; and (2) the
servicing and reporting requirements have been conducted in compliance with this Indenture;
and

     (iii) cause a firm of independent public accountants or other diligence firm approved
by the Agent to furnish a certificate or statement to the Issuer, the Indenture Trustee and
the Agent, to the effect that such firm has, using a sample of Timeshare Loans, confirmed
that (A) charge-offs have been made in accordance with the policies of the Servicer and in
accordance with the Transaction Documents, (B) current outstanding Loan Balances are
accurate, (C) remittances to the Trust Accounts are timely and accurate, (D) any automated
clearing house debits have been made properly, and (E) the data from the Monthly Servicer
Reports agree with data in the Servicer’s systems.

In the event such independent public accountants require the Indenture Trustee to agree to the
procedures to be performed by such firm in any of the reports required to be prepared pursuant to
this Section 5.05(c), the Servicer shall direct the Indenture Trustee in writing to so agree; it
being understood and agreed that the Indenture Trustee will deliver such letter of agreement in
conclusive reliance upon the direction of the Servicer, and the Indenture Trustee has not made any
independent inquiry or investigation as to, and shall have no obligation or liability in respect
of, the sufficiency, validity or correctness of such procedures.

     (d) Report on Proceedings and Servicer Event of Default. (i) Promptly upon the
Servicer’s becoming aware of any proposed or pending investigation of it by any Governmental
Authority or any court or administrative proceeding which involves or may involve the possibility
of materially and adversely affecting the properties, business, prospects, profits or conditions
(financial or otherwise) of the Servicer and subsidiaries, as a whole, a written notice specifying
the nature of such investigation or proceeding and what action the Servicer is taking or proposes
to take with respect thereto and evaluating its merits, or (ii) immediately upon becoming aware of
the existence of any condition or event which constitutes a Servicer Event of Default, a written
notice to the Issuer, the Indenture Trustee, the Qualified Hedge Counterparty, each Purchaser and
the Agent describing its nature and period of existence and what action the Servicer is taking or
proposes to take with respect thereto.

     (e) Reports. The initial Servicer will cause to be delivered all reports required to
be delivered by Diamond Resorts Corporation under the Note Funding Agreement.

32

 

     SECTION 5.6. Records.

          The Servicer shall maintain all data for which it is responsible (including, without
limitation, computerized tapes or disks) relating directly to or maintained in connection with the
servicing of the Timeshare Loans (which data and records shall be clearly marked to reflect that
the Timeshare Loans have been Granted to the Indenture Trustee on behalf of the Noteholders and
constitute property of the Trust Estate) at the address specified in Section 13.2 hereof or, upon
15 days’ notice to the Issuer and the Indenture Trustee, at such other place where any Servicing
Officer of the Servicer is located, and shall give the Issuer and the Indenture Trustee or their
authorized agents access to all such information at all reasonable times, upon 72 hours’ written
notice.

     SECTION 5.7. Fidelity Bond; Errors and Omissions Insurance.

          The Servicer shall maintain or cause to be maintained a fidelity bond and errors and
omissions insurance with respect to the Servicer in such form and amount as is customary for
institutions acting as custodian of funds in respect of timeshare loans or receivables on behalf
of institutional investors. Any such fidelity bond or errors and omissions insurance shall be
maintained in a form and amount that would meet the requirements of prudent institutional loan
servicers.

          No provision of this Section 5.7 requiring such fidelity bond and errors and omissions
insurance policy shall diminish or relieve the Servicer from its duties and obligations as set
forth in this Indenture. The Servicer shall be deemed to have complied with this provision if one
of its respective Affiliates has such fidelity bond coverage and errors and omissions insurance
policy which, by the terms of such fidelity bond and such errors and omissions insurance policy,
the coverage afforded thereunder extends to the Servicer. Upon a request of the Indenture Trustee,
the Servicer shall deliver to the Indenture Trustee, a certification evidencing coverage under
such fidelity bond or such errors and omissions insurance policy. Any such fidelity bond or errors
and omissions insurance policy shall not be canceled or reduced without ten days’ prior written
notice to the Indenture Trustee.

     SECTION 5.8. Merger or Consolidation of the Servicer.

     (a) The Servicer shall promptly provide written notice to the Indenture Trustee and the Agent
of any merger or consolidation of the Servicer. The Servicer shall keep in full effect its
existence, rights and franchise as a corporation under the laws of the state of its incorporation
except as permitted herein, and shall obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Indenture or any of the Timeshare Loans and to
perform its duties under this Indenture.

     (b) Any Person into which the Servicer may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Servicer shall be a party, or
any Person succeeding to the business of the Servicer, shall be the successor of the Servicer
hereunder, without the execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding; provided,
however,

33

 

that the successor or surviving Person (i) is a company whose business includes the servicing of
assets similar to the Timeshare Loans and shall be authorized to transact business in the state or
states in which the related Timeshare Properties it is to service are situated; (ii) is a U.S.
Person, and (iii) delivers to the Indenture Trustee (A) an agreement, in form and substance
reasonably satisfactory to the Indenture Trustee and the Noteholders, which contains an assumption
by such successor entity of the due and punctual performance and observance of each covenant and
condition to be performed or observed by the Servicer under this Indenture and (B) an Opinion of
Counsel as to the enforceability of such agreement.

     SECTION 5.9. Sub-Servicing.

     (a) The Servicer may enter into one or more subservicing agreements with a subservicer so long
as any such subservicer must be reasonably acceptable to the Agent. References herein to actions
taken or to be taken by the Servicer in servicing the Timeshare Loans include actions taken or to
be taken by a subservicer on behalf of the Servicer. Any subservicing agreement will be upon such
terms and conditions as the Servicer may reasonably agree and as are not inconsistent with this
Indenture. The Servicer will be responsible for compliance with the Fair Debt Collection Practices
Act and any other applicable laws, rules or regulations by any entity to which the Servicer
delegates its duties. The Servicer shall be solely responsible for any subservicing fees.

     (b) Notwithstanding any subservicing agreement, the Servicer (and the Successor Servicer if it
is acting as such pursuant to Section 5.16 hereof) shall remain obligated and liable for the
servicing and administering of the Timeshare Loans in accordance with this Indenture without
diminution of such obligation or liability by virtue of such subservicing agreement and to the same
extent and under the same terms and conditions as if the Servicer alone were servicing and
administering the Timeshare Loans.

     SECTION 5.10. Servicer Resignation.

          The Servicer shall not resign from the duties and obligations hereby imposed on it under this
Indenture unless and until (a) the Successor Servicer shall have assumed the responsibilities and
obligations of the Servicer hereunder, and (b) the Indenture Trustee shall have received the
consent of the Agent. Upon such resignation, the Servicer shall comply with Section 5.4(b) hereof.

     SECTION 5.11. Fees and Expenses.

          As compensation for the performance of its obligations under this Indenture, the Servicer
shall be entitled to receive on each Payment Date, from amounts on deposit in the Collection
Account and in the priorities described in Section 3.4 hereof, the Servicing Fee and as additional
compensation, the amounts described in Section 5.2(b) hereof. Other than Liquidation Expenses, the
Servicer shall pay all expenses incurred by it in connection with its servicing activities
hereunder.

34

 

     SECTION 5.12. Access to Certain Documentation.

          Upon five Business Days’ prior written notice (or without prior written notice following a
Servicer Event of Default), the Servicer will, from time to time during regular business hours, as
requested by the Issuer, the Indenture Trustee, the Agent or any Purchaser which the Agent has
confirmed holds at least a 15% interest in the Notes and, prior to the occurrence of a Servicer
Event of Default, at the expense of the Issuer, the Indenture Trustee, the Agent or such Purchaser,
and upon the occurrence and continuance of a Servicer Event of Default, at the expense of the
Servicer, permit such Issuer, Indenture Trustee, Agent or Purchaser or its agents or
representatives, as the case may be, (i) to examine and make copies of and abstracts from all
books, records and documents (including, without limitation, computer tapes and disks) in the
possession or under the control of the Servicer relating to the servicing of the Timeshare Loans
serviced by it and (ii) to visit the offices and properties of the Servicer for the purpose of
examining such materials described in clause (i) above, and to discuss matters relating to the
Timeshare Loans with any of the officers, employees or accountants of the Servicer having knowledge
of such matters. Nothing in this Section 5.12 shall affect the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding the Obligors, and the
failure of the Servicer to provide access to information as a result of such obligation shall not
constitute a breach of this Section 5.12.

     SECTION 5.13. No Offset.

          Prior to the termination of this Indenture, the obligations of Servicer under this Indenture
shall not be subject to any defense, counterclaim or right of offset which the Servicer has or may
have against the Issuer, the Indenture Trustee, the Agent or any Purchaser, whether in respect of
this Indenture, any Timeshare Loan or otherwise.

     SECTION 5.14. Cooperation.

          The Indenture Trustee agrees to cooperate with the Servicer in connection with the Servicer’s
preparation of the Monthly Servicer Report, including without limitation, providing account
balances of Trust Accounts and notification of the Events of Default or Amortization Events and
other information of which the Indenture Trustee has knowledge which may affect the Monthly
Servicer Report.

     SECTION 5.15. Indemnification, Third Party Claim.

          The Servicer agrees to indemnify the Issuer, the Indenture Trustee, the Custodian, the
In-Transit Custodian, the Agent and the Purchasers (collectively, the “Indemnified Parties”) from
and against any and all actual damages (excluding economic losses related to the collectibility of
any Timeshare Loan), claims, reasonable attorneys’ fees and related costs, judgments, and any
other costs, fees and expenses that each may sustain (collectively, the “Indemnified Amounts”)
because of the failure of the Servicer to service the Timeshare Loans in accordance with the
Servicing Standard or otherwise perform its obligations and duties hereunder in compliance with
the terms of this Indenture, or because of any act or omission by the Servicer due to its
negligence or willful misconduct in connection with its maintenance and custody of any funds,
documents and records under this Indenture, or its release thereof except as

35

 

contemplated
by this Indenture. The Servicer shall immediately notify the Issuer, the Agent and
the Indenture Trustee if it has knowledge or should have knowledge of a claim made by a third
party with respect to the Timeshare Loans, and, if such claim relates to the servicing of the
Timeshare Loans by the Servicer, assume, with the consent of the Indenture Trustee, the defense of
any such claim and pay all expenses in connection therewith, including counsel fees, and promptly
pay, discharge and satisfy any judgment or decree which may be entered against it. This Section
5.15 shall survive the termination of this Indenture or the resignation or removal of the Servicer
hereunder.

     SECTION 5.16. Back-Up Servicer and Successor Servicer.

     (a) Subject to the terms and conditions herein, the Issuer hereby appoints Wells Fargo Bank,
National Association as the initial Back-Up Servicer hereunder. The Back-Up Servicer shall perform
all of its duties hereunder in accordance with applicable law, the terms of this Indenture, the
respective Timeshare Loans and, to the extent consistent with the foregoing, in accordance with the
customary and usual procedures employed by the Back-Up Servicer with respect to comparable assets
that the Back-Up Servicer services for itself or other Persons. The Back-Up Servicer shall be
compensated for its services hereunder by the Back-Up Servicing Fee.

     (b) Not later than the fourth Business Day preceding a Payment Date (unless otherwise
requested more frequently by the Indenture Trustee), the Servicer shall prepare and deliver to the
Back-Up Servicer: (i) a copy of the Monthly Servicer Report and all other reports and notices, if
any, delivered to the Issuer and the Indenture Trustee (collectively, the “Monthly Reports”); (ii)
a computer file or files stored on compact disc, magnetic tape or provided electronically, prepared
in accordance with the record layout for data conversion attached hereto as Exhibit F and
made a part hereof (the “Tape(s)”); and (iii) a computer file or files stored on compact disc,
magnetic tape or provided electronically containing cumulative payment history for the Timeshare
Loans, including servicing collection notes (the “Collection Reports”). The Tape(s) shall contain
(y) all information with respect to the Timeshare Loans as of the close of business on the last day
of the Due Period necessary to store the appropriate data in the Back-Up Servicer’s system from
which the Back-Up Servicer will be capable of preparing a daily trial balance relating to the data
and (z) an initial trial balance showing balances of the Timeshare Loans as of the last business
day corresponding to the date of the Tape(s) (the “Initial Trial Balance”). The Back-Up Servicer
shall have no obligations as to the Collection Reports other than to insure that they are able to
be opened and read (which it shall determine promptly upon receipt). The Servicer shall give
prompt written notice to the Indenture Trustee, the Back-Up Servicer and the Agent of any
modifications in the Servicer’s servicing systems.

     (c) The Back-Up Servicer shall use the Tape(s) and Initial Trial Balance to ensure that the
Monthly Reports are complete on their face and the following items in such Monthly Reports have
been accurately calculated, if applicable, and reported: (i) the Aggregate Loan Balance, (ii) the
aggregate Outstanding Note Balance, (iii) the payments to be made pursuant to Section 3.4 hereof,
(iv) the Default Level, (v) the Delinquency Level and (vi) Gross Excess Spread Level. The Back-Up
Servicer shall give prompt written notice to the Indenture Trustee and the Agent of any
discrepancies discovered pursuant to its review of the items required by this Section 5.16(c) or if
any of the items in Section 5.16(b) can not be open and read.

36

 

     (d) Other than the duties specifically set forth in this Indenture and those additional
standard reports or services the Servicer or the Indenture Trustee may request of the Back-Up
Servicer from time to time, the Back-Up Servicer shall have no obligation hereunder, including,
without limitation, to supervise, verify, monitor or administer the performance of the Servicer.
The Back-Up Servicer shall have no liability for any action taken or omitted to be taken by the
Servicer.

     (e) From and after the receipt by the Servicer of a written termination notice pursuant to
Section 5.4(a) hereof, the resignation of the Servicer pursuant to Section 5.10 hereof or non-renewal by the Agent pursuant to Section 5.20 hereof, and upon written notice thereof to the
Back-Up Servicer from the Indenture Trustee, all authority and power of the Servicer under this
Indenture, whether with respect to the Timeshare Loans or otherwise, shall pass to and be vested in
the Back-Up Servicer, as the Successor Servicer, on the Assumption Date (as defined in Section
5.16(f) hereof).

     (f) The Servicer shall perform such actions as are reasonably necessary to assist the
Indenture Trustee and the Successor Servicer in such transfer of the Servicer’s duties and
obligations pursuant to Section 5.16(e) hereof. The Servicer agrees that it shall promptly (and in
any event no later than five Business Days subsequent to its receipt of the notice of termination)
provide the Successor Servicer (with costs being borne by the Servicer) with all documents and
records (including, without limitation, those in electronic form) reasonably requested by it to
enable the Successor Servicer to assume the Servicer’s duties and obligations hereunder, and shall
cooperate with the Successor Servicer in effecting the assumption by the Successor Servicer of the
Servicer’s obligations hereunder, including, without limitation, the transfer within two Business
Days to the Successor Servicer for administration by it of all cash amounts which shall at the time
or thereafter received by it with respect to the Timeshare Loans (provided, however, that the
Servicer shall continue to be entitled to receive all amounts accrued or owing to it under this
Indenture on or prior to the date of such termination). If the Servicer fails to undertake such
action as is reasonably necessary to effectuate such transfer of its duties and obligations, the
Indenture Trustee, or the Successor Servicer if so directed by the Indenture Trustee, is hereby
authorized and empowered to execute and deliver, on behalf of and at the expense of the Servicer,
as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things reasonably necessary to effect the purposes of such notice of
termination. Promptly after receipt by the Successor Servicer of such documents and records, the
Successor Servicer will commence the performance of such servicing duties and obligations as
successor Servicer in accordance with the terms and conditions of this Indenture (such date, the
“Assumption Date”), and from and after the Assumption Date the Successor Servicer shall receive the
Servicing Fee and agrees to and shall be bound by all of the provisions of this Article V and any
other provisions of this Indenture relating to the duties and obligations of the Servicer, except
as otherwise specifically provided herein.

     (i) Notwithstanding anything contained in this Indenture to the contrary, the Successor
Servicer is authorized to accept and rely on all of the accounting, records (including
computer records) and work of the Servicer relating to the Timeshare Loans (collectively,
the “Predecessor Servicer Work Product”) without any audit or other examination thereof, and
the Successor Servicer shall have no duty, responsibility,

37

 

obligation or liability for the acts and omissions of the Servicer. If any error,
inaccuracy, omission or incorrect or non-standard practice or procedure (collectively,
“Errors”) exist in any Predecessor Servicer Work Product and such Errors make it materially
more difficult to service or should cause or materially contribute to the Successor
Servicer making or continuing any Errors (collectively, “Continued Errors”), the Successor
Servicer shall have no duty, responsibility, obligation or liability for such Continued
Errors; provided, however, that the Successor Servicer agrees to use its best
efforts to prevent further Continued Errors. In the event that the Successor Servicer
becomes aware of Errors or Continued Errors, the Successor Servicer shall, with the prior
consent of the Agent, use its best efforts to reconstruct and reconcile such data as is
commercially reasonable to correct such Errors and Continued Errors and to prevent future
Continued Errors and shall be entitled to recover its costs thereby.

     (ii) The Successor Servicer shall have: (A) no liability with respect to any
obligation which was required to be performed by the terminated or resigned Servicer prior
to the Assumption Date or any claim of a third party based on any alleged action or
inaction of the terminated or resigned Servicer, (B) no obligation to perform any
repurchase or advancing obligations, if any, of the Servicer, (C) no obligation to pay any
taxes required to be paid by the Servicer, (D) no obligation to pay any of the fees and
expenses of any other party involved in this transaction that were incurred by the prior
Servicer and (E) no liability or obligation with respect to any Servicer indemnification
obligations of any prior Servicer including the original Servicer.

     (g) In the event that Wells Fargo Bank, National Association as the initial Back-Up Servicer
is terminated for any reason, or fails or is unable to act as Back-Up Servicer and/or as Successor
Servicer, the Indenture Trustee may enter into a back-up servicing agreement with a back-up
servicer, and may appoint a successor servicer to act under this Indenture, in either event on such
terms and conditions as are provided herein as to the Back-Up Servicer or the Successor Servicer,
as applicable, or on such other terms and conditions as may be reasonably acceptable to the Agent.

     SECTION 5.17. Limitation of Liability.

          It is expressly understood and agreed by the parties hereto that DFS is executing this
Indenture solely as Servicer and DFS undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture applicable to the Servicer. It is expressly understood
and agreed by the parties hereto that Wells Fargo Bank, National Association, other than in its
capacity as Indenture Trustee, is executing this Indenture solely as Custodian and Back-Up
Servicer, and Wells Fargo Bank, National Association undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture applicable to the Custodian, the
Back-Up Servicer, the Back-Up Servicer as Successor Servicer, and the Indenture Trustee, as the
case may be.

     SECTION 5.18. Recordation.

          The Servicer agrees to cause all evidences of recordation of the original Mortgage and
Installment Sale Notice to be delivered to the Custodian to be held as part of the Timeshare

38

 

Loan Files. After the occurrence of an event which, but for the passage of time or the giving of
notice or both, would constitute an Event of Default, if so directed by the Agent, the Indenture
Trustee shall cause either the Custodian or a third party appointed by the Indenture Trustee to
complete the assignments of mortgage and (at the Servicer’s expense) record such assignments of
mortgage in all appropriate jurisdictions.

     SECTION 5.19 St. Maarten Notice.

          Within 45 days of any Funding Date or any Transfer Date (with respect to a Qualified
Substitute Timeshare Loan), as the case may be, the Servicer shall give notice to each Obligor
under a Timeshare Loan with respect to any Resort in the territory of St. Maarten that such
Timeshare Loan has been transferred and assigned to the Indenture Trustee, in trust, for the
benefit of the Noteholders. Such notice may include any notice or notices that the Issuer’s
predecessors in title to the Timeshare Loan may give to the same Obligor with respect to any
transfers and assignments of the Timeshare Loan by such predecessors. Such notice shall be in the
form attached hereto as Exhibit G, as the same may be amended, revised or substituted by
the Indenture Trustee and the Servicer from time to time.

     SECTION 5.20. DFS Term as Servicer.

          As of the Amendment Closing Date, DFS is engaged as the Servicer hereunder. On the third
Business Day prior to the last day of each calendar month, DFS shall send a written notice (which
may be in electronic mail form) requesting renewal of its engagement as Servicer hereunder for the
following calendar month, such notice shall be delivered to all of the following email addresses:
abcp.monitoring@credit-suisse.com, mark.golombeck@credit-suisse.com and
anita.johal@credit-suisse.com. In response to the foregoing sentence, the Agent may by
written notice (which may be in electronic mail form) to the Vice President of DFS, renew this
Agreement for the following calendar month, in which case, DFS agrees that it shall act as Servicer
for such calendar month. Should the Agent fail to provide a written notice of renewal, it may, at
any time prior to the end of the next calendar month, deliver a notice to DFS that it wishes to
reinstate this Agreement, in which case the engagement of DFS as Servicer hereunder shall be deemed
to have been renewed for such calendar month. In the event that the Agent elects not to renew DFS’
engagement as the Servicer, the Agent shall send prompt written notice thereof (which may be in
electronic mail form) to the Indenture Trustee and the Back-up Servicer. Upon the receipt of such
notice from the Agent (and at no time prior thereto), the Back-up Servicer shall succeed to the
servicing duties and obligations as successor Servicer in accordance with Section 5.16(f) hereof.

ARTICLE VI.

EVENTS OF DEFAULT; REMEDIES

     SECTION 6.1. [Reserved]. 

     SECTION 6.2. Acceleration of Maturity; Rescission and Annulment. 

39

 

     (a) If an Event of Default of the kind specified in clause (e) or clause (f) of the definition
of “Event of Default” occurs, the Notes shall automatically become due and payable at the
Outstanding Note Balance together with all accrued and unpaid interest thereon. If an Event of
Default (other than an Event of Default of the kind described in the preceding sentence) shall
occur and is continuing, the Indenture Trustee shall, upon notice from the Agent, declare the Notes
to be immediately due and payable at the Outstanding Note Balance together with all accrued and
unpaid interest thereon. Upon any such declaration or automatic acceleration, the Outstanding Note
Balance of the Notes together with all accrued and unpaid interest thereon shall become immediately
due and payable without presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Issuer. The Indenture Trustee shall promptly send a notice of any declaration
or automatic acceleration to the Agent and to each Purchaser.

     (b) At any time after such a declaration of acceleration has been made, or after such
acceleration has automatically become effective and before a judgment or decree for payment of the
money due has been obtained by the Indenture Trustee as hereinafter
in this Article provided, the Agent by written notice to the Issuer and the Indenture Trustee, may rescind and annul such
declaration and its consequences if:

     (i) the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to
pay (without duplication):

     (A) all principal due on the Notes which has become due otherwise than
by such declaration of acceleration and interest thereon from the date when
the same first became due until the date of payment or deposit at the
applicable Note Rate,

     (B) all interest due with respect to the Notes and, to the extent that
payment of such interest is lawful, interest upon overdue interest from the
date when the same first became due until the date of payment or deposit at
a rate per annum equal to the applicable Note Rate, and

     (C) all sums paid or advanced by the Indenture Trustee hereunder and
the reasonable compensation, expenses, disbursements, and advances of each
of the Indenture Trustee, the Servicer and the Lockbox Banks, its agents and
counsel;

     and

     (ii)
all Events of Default with respect to the Notes, other than the non-payment of the
Outstanding Note Balance of the Notes which became due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.13 hereof.

No such rescission shall affect any subsequent Event of Default or impair any right consequent
thereon.

40

 

     (c) The Indenture Trustee shall provide notice to the Qualified Hedge Counterparty of the
occurrence of an Event of Default for which it has received written notice and any acceleration of
the Notes hereunder.

     SECTION 6.3. Remedies.

     (a) If an Event of Default with respect to the Notes occurs and is continuing of which a
Responsible Officer of the Indenture Trustee has actual knowledge, the Indenture Trustee shall
immediately give notice to the Agent, each Purchaser, each Noteholder and the Qualified Hedge
Counterparty as set forth in Section 7.2 hereof and shall solicit the Agent for advice. The
Indenture Trustee shall then take such action as so directed by the Agent subject to the provisions
of this Indenture.

     (b) Following any acceleration of the Notes, the Indenture Trustee shall have all of the
rights, powers and remedies with respect to the Trust Estate as are available to secured parties
under the UCC or other applicable law, subject to subsection (d) below. Such rights, powers and
remedies may be exercised by the Indenture Trustee in its own name as trustee of an express trust.

(c) (i) If an Event of Default specified in clause (a) of the definition of “Event of
Default” occurs and is continuing, the Indenture Trustee is authorized to recover judgment
in its own name and as trustee of an express trust against the Issuer for the aggregate
Outstanding Note Balance and interest remaining unpaid with respect to the Notes.

     (ii) If an Event of Default occurs and is continuing, the Indenture Trustee may in its
discretion, and at the instruction of the Agent shall, proceed to protect and enforce its
rights and the rights of the Noteholders by such appropriate judicial or other proceedings
as the Indenture Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper remedy. The
Indenture Trustee shall notify the Issuer, the Agent, the Servicer and the Noteholders of
any such action.

     (d) If the Indenture Trustee shall have received instructions within 45 days from the date
notice pursuant to Section 6.3(a) hereof is first given from the Agent, to the effect that such
Persons approve of or request the liquidation of the Timeshare Loans or upon an Event of Default
set forth in clause (e) or clause (f) of the definition of “Event of Default”, the Indenture
Trustee shall to the extent lawful promptly sell, dispose of or otherwise liquidate the Timeshare
Loans in a commercially reasonable manner and on commercially reasonable terms, which shall include
the solicitation of competitive bids; provided, however, that, upon an Event of Default set
forth in clause (e) or clause (f) of the definition of “Event of Default”, the Agent may notify the
Indenture Trustee that such liquidation shall not occur. The Indenture Trustee may obtain a prior
determination from any conservator, receiver or liquidator of the Issuer that the terms and manner
of any proposed sale, disposition or liquidation are commercially reasonable.

41

 

     SECTION 6.4. Indenture Trustee May File Proofs of Claim.

     (a) In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the
Issuer or the property of the Issuer, the Indenture Trustee (irrespective of whether the principal
of the Notes shall then be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Indenture Trustee shall have made any demand on the Issuer for the
payment of overdue principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise:

     (i) to file and prove a claim for the whole amount of principal and interest owing and
unpaid in respect of the Notes and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Indenture Trustee and any
predecessor Indenture Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee and any predecessor Indenture
Trustee, their agents and counsel) and of the Noteholders allowed in such judicial
proceeding;

     (ii) to collect and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same; and

     (iii) to participate as a member, voting or otherwise, of any official committee of
creditors appointed in such matter;

and any custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Noteholder to make such payments to
the Indenture Trustee and to pay to the Indenture Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee and any predecessor
Indenture Trustee, their agents and counsel, and any other amounts due the Indenture Trustee and
any predecessor Indenture Trustee under Section 7.6 hereof.

     (b) Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize
or consent to or accept or adopt on behalf of any Noteholder, the Agent or any Purchaser any plan
of reorganization, agreement, adjustment or composition affecting the Notes or the rights of any
Noteholder thereof or affecting the Timeshare Loans or the other assets constituting the Trust
Estate or to authorize the Indenture Trustee to vote in respect of the claim of any Noteholder in
any such proceeding.

     SECTION 6.5. Indenture Trustee May Enforce Claims Without Possession of
Notes.

     All rights of action and claims under this Indenture, the Notes, the Timeshare Loans or the
other assets constituting the Trust Estate may be prosecuted and enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Indenture Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after provisions for the
payment of the reasonable compensation, expenses, disbursements and advances of the

42

 

Indenture Trustee and any predecessor Indenture Trustee, their agents and counsel, be for the
benefit of the Noteholders in respect of which such judgment has been recovered, and pursuant to
the priorities contemplated by Section 3.4 hereof.

     SECTION 6.6. Allocation of Money Collected.

     Subject to the following paragraph, if the Notes have been declared, have automatically
become, or otherwise become due and payable following an Event of Default and such declaration or
automatic acceleration has not been rescinded or annulled, any money collected by the Indenture
Trustee in respect of the Trust Estate and any other money that may be held thereafter by the
Indenture Trustee as security for the Notes shall be applied in the following order, at the date
or dates fixed by the Indenture Trustee and, in case of the distribution of such money on account
of principal or interest, without presentment of any Notes:

     (i) to the Indenture Trustee, the Custodian and the Back-Up Servicer, ratably based on
their respective entitlements, any unpaid amounts due under the Indenture;

     (ii) to the Qualified Hedge Counterparty, any payments due to the Hedge Counterparty
under any Hedge Agreement, if any (other than any termination payment with respect to which
the Qualified Hedge Counterparty is the “Defaulting Party” or the sole “Affected Party” (as
such terms are defined in the applicable Hedge Agreement;

     (iii) to the Servicer, any unpaid Servicing Fees; provided, however, that
immediately after receipt of such Servicing Fees, the Servicer shall remit the Issuer’s
portion of any then due and owing Lockbox Bank Fees to each Lockbox Bank;

     (iv) to the Agent, any unpaid Agent Fees;

     (v) to each Purchaser, its Non-Usage Fees;

     (vi) to each Purchaser, its portion of the Interest Distribution Amount;

     (vii) to each Purchaser, all remaining amounts until the Outstanding Note Balance of
the Notes is reduced to zero

     (viii) to each Purchaser, to the extent applicable, all other amounts due and unpaid
under any Transaction Document;

     (ix) to the Hedge Counterparty, any amounts due under the Hedge Agreements not paid
in (ii) above; and

     (x) to the Issuer, any remaining amounts.

     Notwithstanding the foregoing paragraph, if the Notes have become due and payable following an
Event of Default specified in clause (e) or (f) of the definition of “Event of Default” and the
Indenture Trustee shall not have effected a sale of the assets pursuant to Section 6.16 hereof
comprising the Trust Estate, any money collected by the Indenture Trustee in respect of the Trust
Estate shall be applied in accordance with the priorities specified in Section 3.4 hereof.

43

 

     SECTION 6.7. Limitation on Suits.

     No Noteholder, solely by virtue of its status as Noteholder, shall have any right by virtue
or by availing of any provision of this Indenture to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Indenture, unless the Holders of Notes
evidencing not less than 50% of the Outstanding Note Balance of Notes of the Notes then
Outstanding shall have made written request upon the Indenture Trustee to institute such action,
suit or proceeding in its own name as Indenture Trustee hereunder and shall have offered to the
Indenture Trustee such reasonable indemnity as it may require against the cost, expenses and
liabilities to be incurred therein or thereby, and the Indenture Trustee, for 60 days after its
receipt of such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding and no direction inconsistent with such written
request has been given such Indenture Trustee during such 60-day period by the Agent; it being
understood and intended, and being expressly covenanted by each Noteholder with every other
Noteholder and the Indenture Trustee, that no one or more Noteholders shall have any right in any
manner whatever by virtue or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of the Holders of any other of such Notes, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the benefit of all Noteholders. For the
protection and enforcement of the provisions of this Section 6.7, each and every Noteholder and
the Indenture Trustee shall be entitled to such relief as can be given either at law or in equity.

     SECTION 6.8. Unconditional Right of Noteholders to Receive Principal and
Interest.

     Notwithstanding any other provision in this Indenture, other than the provisions hereof
limiting the right to recover amounts due on the Notes to recoveries from the property comprising
the Trust Estate, the Holder of any Note and each Purchaser (as a beneficial holder of a Note)
shall have the absolute and unconditional right to receive payment of the principal of and interest
on such Note as such payments of principal and interest become due, including the Stated Maturity,
and such right shall not be impaired without the consent of such Noteholder or such Purchaser.

     SECTION 6.9. Restoration of Rights and Remedies.

     If the Indenture Trustee or any Noteholder has instituted any proceeding to enforce any right
or remedy under this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Indenture Trustee or to such Noteholder, then and
in every such case, subject to any determination in such proceeding, the Issuer, the Indenture
Trustee and the Noteholders shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Indenture Trustee and the Noteholders
continue as though no such proceeding had been instituted.

     SECTION 6.10. Rights and Remedies Cumulative.

     Except as otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost, or stolen Notes in Section 2.5(f) hereof, no right or remedy herein conferred

44

 

upon or reserved to the Indenture Trustee or to the Noteholders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

     SECTION 6.11. Delay or Omission Not Waiver.

     No delay or omission of the Indenture Trustee or of any Holder of any Note to exercise any
right or remedy accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein. Every right and
remedy given by this Article or by law to the Indenture Trustee or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee or
by the Noteholders, as the case may be.

     SECTION
6.12. Control by Agent.

     Except as may otherwise be provided in this Indenture, until such time as the conditions
specified in Sections 11.1(a)(i) through (iii) hereof have been satisfied in full, the Agent shall
have the right to direct the time, method and place of conducting any proceeding for any remedy
available to the Indenture Trustee, or exercising any trust or power conferred on the Indenture
Trustee, with respect to the Notes. Notwithstanding the foregoing:

     (i) no such direction shall be in conflict with any rule of law or with this
Indenture;

     (ii) the Indenture Trustee shall not be required to follow any such direction which
the Indenture Trustee reasonably believes might result in any personal liability on the
part of the Indenture Trustee for which the Indenture Trustee is not adequately
indemnified; and

     (iii) the Indenture Trustee may take any other action deemed proper by the Indenture
Trustee which is not inconsistent with any such direction; provided that the
Indenture Trustee shall give notice of any such action to the Agent and each Noteholder.

     SECTION 6.13. Waiver of Events of Default.

     (a) The Agent may, by one or more instruments in writing, waive any Event of Default on
behalf of all Noteholders hereunder and its consequences, except a continuing Event of Default:

     (i) in respect of the payment of the principal of or interest on any Note (which may
only be waived by the Holder of such Note), or

     (ii) in respect of a covenant or provision hereof which under Article 9 hereof cannot
be modified or amended without the consent of the Holder of each Outstanding

45

 

Note affected (which only may be waived by the Holders of all Outstanding Notes affected).

     (b) A copy of each waiver pursuant to Section 6.13(a) hereof shall be furnished by the
Issuer to the Indenture Trustee, each Noteholder, each Purchaser and the Agent. Upon any such
waiver, such Event of Default shall cease to exist and shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Event
of Default or impair any right consequent thereon.

     SECTION
6.14. Undertaking for Costs.

     All parties to this Indenture agree (and each Holder of any Note by its acceptance thereof
shall be deemed to have agreed) that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against the Indenture
Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any
party litigant in such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section 6.14 shall not apply to
any suit instituted by the Indenture Trustee or to any suit instituted by the Agent or a Purchaser
for the enforcement of the payment of the principal of or interest on any Note on or after the
maturities for such payments, including the Stated Maturity as applicable.

     SECTION 6.15. Waiver of Stay or Extension Laws.

     The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any
stay or extension law wherever enacted, now or at any time hereafter in force, which may affect
the covenants or the performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants
that it will not hinder, delay or impede the execution of any power herein granted to the
Indenture Trustee, but will suffer and permit the execution of every such power as though no such
law had been enacted.

     SECTION 6.16. Sale of Trust Estate.

     (a) The power to effect any sale of any portion of the Trust Estate pursuant to Section 6.3
hereof shall not be exhausted by any one or more sales as to any portion of the Trust Estate
remaining unsold, but shall continue unimpaired until the entire Trust Estate so allocated shall
have been sold or all amounts payable on the Notes shall have been paid or losses allocated thereto
and borne thereby. The Indenture Trustee may from time to time, upon directions in accordance
with Section 6.12 hereof, postpone any public sale by public announcement made at the time and
place of such sale.

     (b) To the extent permitted by applicable law, the Indenture Trustee shall not sell to a third
party the Trust Estate, or any portion thereof except as permitted under Section 6.3(d) hereof.

46

 

     (c) In connection with a sale of all or any portion of the Trust Estate:

     (i) any one or more of the Noteholders, the Purchasers or the owners of the beneficial
interests in the Issuer may bid for and purchase the property offered for sale, and upon compliance
with the terms of sale may hold, retain, and possess and dispose of such property, without further
accountability, and any Noteholder may, in paying the purchase money therefor, deliver in lieu of
cash any Outstanding Notes or claims for interest thereon for credit in the amount that shall, upon
distribution of the net proceeds of such sale, be payable thereon, and the Notes, in case the
amounts so payable thereon shall be less than the amount due thereon, shall be returned to the
Noteholders after being appropriately stamped to show such partial payment;

     (ii) the Indenture Trustee shall execute and deliver an appropriate instrument of conveyance
prepared by the Servicer transferring its interest without representation or warranty and without
recourse in any portion of the Trust Estate in connection with a sale thereof,

     (iii) the Indenture Trustee is hereby irrevocably appointed the agent and attorney-in-fact of
the Issuer to transfer and convey its interest in any portion of the Trust Estate in connection
with a sale thereof, and to take all action necessary to effect such sale;

     (iv) no purchaser or transferee at such a sale shall be bound to ascertain the Indenture
Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the
application of any moneys; and

     (v) the method, manner, time, place and terms of any, sale of all or any portion of the Trust
Estate shall be commercially reasonable.

47

 

     SECTION 6.17. Action on Notes.

     The Indenture Trustee’s right to seek and recover judgment on the Notes or under this
Indenture or any other Transaction Document shall not be affected by the seeking, obtaining or
application of any other relief under or with respect to this Indenture or any other Transaction
Document. Neither the Lien of this Indenture nor any rights or remedies of the Indenture Trustee
or the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee
against the Issuer or by the levy of any execution under such judgment upon any portion of the
Trust Estate or upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied in accordance with the provisions of this Indenture.

     SECTION 6.18. Performance and Enforcement of Certain Obligations.

     Promptly following a request from the Indenture Trustee, the Issuer shall take all such
lawful action as the Indenture Trustee may request to compel or secure the performance and
observance by the Diamond Resorts Parties of each of their respective obligations to the Issuer
under or in connection with the Sale Agreement and any other Transaction Document and to exercise
any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in
connection with the Sale Agreement or any other Transaction Document to the extent and in the
manner directed by the Indenture Trustee, including the transmission of notices of default on the
part of a Diamond Resorts Party thereunder and the institution of legal or administrative actions
or proceedings to compel or secure performance by the Diamond Resorts Parties of each of their
obligations under the Sale Agreement and the other Transaction Documents.

ARTICLE VII.

THE INDENTURE TRUSTEE

     SECTION 7.1. Certain Duties.

     (a) The Indenture Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Indenture Trustee (including, without limitation, the duties
referred to in Article V hereof during the continuance of a Servicer Event of Default, or a
Servicer Event of Default resulting in the appointment of the Back-Up Servicer as Successor
Servicer pursuant to Article V hereof).

     (b) In the absence of bad faith on its part, the Indenture Trustee may conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Indenture Trustee, the Indenture Trustee shall be
under a duty to examine the same to determine whether or not they conform to the requirements of
this Indenture, provided however, the Indenture Trustee shall not be required to verify or
recalculate the contents thereof.

     (c) In case an Event of Default or a Servicer Event of Default (resulting in the appointment
of the Back-Up Servicer as Successor Servicer) has occurred and is continuing, the

48

 

Indenture Trustee shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent Person would exercise or use
under the circumstances in the conduct of such Person’s own affairs; provided, however,
that no provision in this Indenture shall be construed to limit the obligations of the Indenture
Trustee to provide notices under Section 7.2 hereof.

     (d) The Indenture Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the Noteholders pursuant to
this Indenture, unless such Noteholders shall have offered to the Indenture Trustee reasonable
security or indemnity (which may be in the form of written assurances) against the costs, expenses
and liabilities which might be incurred by it in compliance with such request or direction.

     (e) No provision of this Indenture shall be construed to relieve the Indenture Trustee from
liability for its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

     (i) this Section 7.1(e) shall not be construed to limit the effect of Section 7.1(a)
and (b) hereof;

     (ii) the Indenture Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer unless it shall be proved that the Indenture Trustee shall
have been negligent in ascertaining the pertinent facts; and

     (iii) the Indenture Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the written direction of the
holders of the requisite principal amount of the outstanding Notes, or in accordance with
any written direction delivered to it under Section 6.2(a) hereof, relating to the time,
method and place of conducting any proceeding for any remedy available to the Indenture
Trustee, or exercising any trust or power conferred upon the Indenture Trustee, under this
Indenture.

     (f) Whether or not therein expressly so provided, every provision of this Indenture relating
to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall
be subject to the provisions of this Section 7.1.

     (g) The Indenture Trustee makes no representations or warranties with respect to the Timeshare
Loans.

     (h) Notwithstanding anything to the contrary herein, the Indenture Trustee is not required to
expend or risk its own funds or otherwise incur financial liability in the performance of any of
its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable
grounds to believe that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.

49

 

     SECTION 7.2. Notice of Events of Default and Amortization Events.

     The Indenture Trustee shall promptly (but in any event within three Business Days notify the
Issuer, the Servicer, the Purchasers, the Agent, the Qualified Hedge Counterparty and the
Noteholders upon a Responsible Officer obtaining actual knowledge of any event which constitutes a
Amortization Event, an Event of Default or a Servicer Event of Default or would constitute a
Amortization Event, an Event of Default or a Servicer Event of Default but for the requirement
that notice be given or time elapse or both, provided, however, that this Section 7.2
shall not limit the obligations of the Indenture Trustee to provide notices expressly required by
this Indenture.

     SECTION 7.3. Certain Matters Affecting the Indenture Trustee.

     Subject to the provisions of Section 7.1:

     (a) The Indenture Trustee may rely and shall be protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented by the proper party or
parties;

     (b) Any request or direction of any Noteholders, the Issuer, or the Servicer mentioned herein
shall be in writing;

     (c) Whenever in the performance of its duties hereunder the Indenture Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or omitting any action
hereunder, the Indenture Trustee (unless other evidence be herein specifically prescribed) may, in
the absence of bad faith on its part, rely upon an Officer’s Certificate or Opinion of Counsel;

     (d) The Indenture Trustee may consult with counsel and the advice of such counsel or any
Opinion of Counsel shall be deemed authorization in respect of any action taken, suffered, or
omitted by it hereunder in good faith and in reliance thereon;

     (e) Prior to the occurrence of a Amortization Event, an Event of Default, or a Servicer Event
of Default, or after the curing of all Amortization Events, Events of Default or Servicer Events of
Default which may have occurred, the Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper document, unless requested
in writing so to do by the Agent; provided, however, that if the payment within a
reasonable time to the Indenture Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the reasonable opinion of the Indenture
Trustee, not reasonably assured to the Indenture Trustee by the security afforded to it by the
terms of this Indenture, the Indenture Trustee may require reasonable indemnity against such cost,
expense or liability as a condition to so proceeding. The reasonable expense of every such
examination shall be paid by the Servicer or, if paid by the Indenture Trustee, shall be reimbursed
by the Servicer upon demand;

50

 

     (f) The Indenture Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys or a custodian (which may be
Affiliates of the Indenture Trustee) and the Indenture Trustee shall not be liable for any acts or
omissions of such agents, attorneys or custodians appointed with due care by it hereunder; and

     (g) Delivery of any reports, information and documents to the Indenture Trustee provided for
herein is for informational purposes only (unless otherwise expressly stated) and the Indenture
Trustee’s receipt of such shall not constitute constructive knowledge of any information contained
therein or determinable from information contained therein, including the Servicer’s or the
Issuer’s compliance with any of its representations, warranties or covenants hereunder (as to which
the Indenture Trustee is entitled to rely exclusively on Officers’ Certificates).

     SECTION 7.4. Indenture Trustee Not Liable for Notes or Timeshare Loans.

     (a) The Indenture Trustee makes no representations as to the validity or sufficiency of this
Indenture or any Transaction Document, the Notes (other than the authentication thereof) or of any
Timeshare Loan. The Indenture Trustee shall not be accountable for the use or application by the
Issuer of funds paid to the Issuer in consideration of conveyance of the Timeshare Loans to the
Trust Estate.

     (b) The Indenture Trustee shall have no
responsibility or liability for or with respect to the validity of any security interest in any property securing a Timeshare Loan; the existence or
validity of any Timeshare Loan, the validity of the assignment of any Timeshare Loan to the Trust
Estate or of any intervening assignment; the review of any Timeshare Loan, any Timeshare Loan File,
the completeness of any Timeshare Loan File, the receipt by the Custodian of any Timeshare Loan or
Timeshare Loan File (it being understood that the Indenture Trustee has not reviewed and does not
intend to review such matters); the performance or enforcement of any Timeshare Loan; the
compliance by the Issuer or the Servicer with any covenant or the breach by the Issuer or the
Servicer of any warranty or representation made hereunder or in any Transaction Document or the
accuracy of any such warranty or representation; the acts or omissions of the Issuer, the Servicer
or any Obligor; or any action of the Servicer or the Servicer taken in the name of the Indenture
Trustee.

     (c) If the Indenture Trustee acts as Successor Servicer hereunder, it shall be entitled to the
protections of Section 7.4(b).

     SECTION 7.5. Indenture Trustee May Own Notes.

     The Indenture Trustee in its individual or any other capacity may become the owner or pledgee
of Notes with the same rights as it would have if it were not Indenture Trustee.

     SECTION 7.6. Indenture Trustee’s Fees and Expenses.

     On each Payment Date, the Indenture Trustee shall be entitled to the Indenture Trustee Fee
and reimbursement of Indenture Trustee Expenses in the priority provided in Section 3.4 hereof.

51

 

     SECTION 7.7. Eligibility Requirements for Indenture Trustee.

     Other than the initial Indenture Trustee, the Indenture Trustee hereunder shall at all times
(a) be a corporation, depository institution, national banking association or trust company
organized and doing business under the laws of the United States of America or any state thereof
authorized under such laws to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000, (b) be subject to supervision or examination by federal or state
authority, (c) be capable of maintaining an Eligible Bank Account, (d) have a long-term unsecured
debt rating of not less than “A2” from Moody’s, “A” from S&P or “A” from Fitch and (e) shall be
acceptable to the Agent. If such institution publishes reports of condition at least annually,
pursuant to or to the requirements of the aforesaid supervising or examining authority, then for
the purpose of this Section 7.7, the combined capital and surplus of such institution shall be
deemed to be its combined capital and surplus as set forth in its most recent report of condition
so published. In case at any time the Indenture Trustee shall cease to be eligible in accordance
with the provisions of this Section 7.7, the Indenture Trustee shall resign immediately in the
manner and with the effect specified in Section 7.8 hereof.

     SECTION 7.8. Resignation or Removal of Indenture Trustee.

     (a) The Indenture Trustee may at any time resign and be discharged with respect to the Notes
by giving 60 days’ written notice thereof to the Servicer, the Issuer, the Noteholders, the
Purchasers and the Agent. Upon receiving such notice of resignation, the Issuer shall promptly
appoint a successor Indenture Trustee meeting the requirements of Section 7.7 hereof not objected
to by the Agent within 30 days after prior written notice, by written instrument, in quintuplicate,
one counterpart of which instrument shall be delivered to each of the Issuer, the Servicer, the
successor Indenture Trustee and the predecessor Indenture Trustee. If no successor Indenture
Trustee shall have been so appointed and have accepted appointment within 60 days after the giving
of such notice of resignation, the resigning Indenture Trustee may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.

     (b) If at any time the Indenture Trustee shall cease to be eligible in accordance with the
provisions of Section 7.7 hereof and shall fail to resign after written request therefor by the
Issuer, or if at any time the Indenture Trustee shall be legally unable to act, fails to perform in
any material respect its obligations under this Indenture, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Indenture Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Indenture Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation, then the Agent may direct, and the
Servicer shall follow such direction and remove the Indenture Trustee. If it removes the
Indenture Trustee under the authority of the immediately preceding sentence, the Issuer shall
promptly appoint a successor Indenture Trustee meeting the requirements of Section 7.7 not objected
to by the Agent, within 30 days after prior written notice, by written instrument, one counterpart
of which instrument shall be delivered to each of the Issuer, the Servicer, the Noteholders, each
Purchaser, the Agent, the successor Indenture Trustee and the predecessor Indenture Trustee.

     (c) Any resignation or removal of the Indenture Trustee and appointment of a successor
Indenture Trustee pursuant to any of the provisions of this Section 7.8 shall not

52

 

become effective until acceptance of appointment by the successor Indenture Trustee as
provided in Section 7.9 hereof.

       SECTION 7.9. Successor Indenture Trustee.

     (a) Any successor Indenture Trustee appointed as provided in Section 7.8 hereof shall execute,
acknowledge and deliver to each of the Servicer, the Issuer, the Agent, the Purchasers, the
Noteholders and to its predecessor Indenture Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor Indenture Trustee shall
become effective and such successor Indenture Trustee, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and obligations of its predecessor
hereunder with like effect as if originally named a Indenture Trustee. The predecessor Indenture
Trustee shall deliver or cause to be delivered to the successor Indenture Trustee or its custodian
any Transaction Documents and statements held by it or its custodian hereunder; and the Servicer
and the Issuer and the predecessor Indenture Trustee shall execute and deliver such instruments and
do such other things as may reasonably be required for the full and certain vesting and
confirmation in the successor Indenture Trustee of all such rights, powers, duties and obligations.

     (b) In case of the appointment hereunder of a successor Indenture Trustee with respect to the
Notes, the Issuer, the retiring Indenture Trustee and each successor Indenture Trustee with respect
to the Notes shall execute and deliver an indenture supplemental hereto wherein each successor
Indenture Trustee shall accept such appointment and which (i) shall contain such provisions as
shall be necessary or desirable to transfer and confirm to, and to vest in, each successor
Indenture Trustee all the rights, powers, trusts and duties of the retiring Indenture Trustee with
respect to the Notes to which the appointment of such successor Indenture Trustee relates and (ii)
shall add to or change any of the provisions of this Indenture as shall be necessary to provide for
or facilitate the administration of the Trust Estate hereunder by more than one Indenture Trustee,
it being understood that nothing herein or in such supplemental indenture shall constitute such
Indenture Trustees co-trustees of the same allocated trust and that each such Indenture Trustee
shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts
hereunder administered by any other such Indenture Trustee; and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Indenture Trustee shall
become effective to the extent provided therein and each such successor Indenture Trustee, without
any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Indenture Trustee with respect to the Notes to which the appointment of such
successor Indenture Trustee relates; but, on request of the Issuer or any successor Indenture
Trustee, such retiring Indenture Trustee shall duly assign, transfer and deliver to such successor
Indenture Trustee all property and money held by such retiring Indenture Trustee hereunder with
respect to the Notes of that or those to which the appointment of such successor Indenture Trustee
relates.

     Upon request of any such successor Indenture Trustee, the Issuer shall execute
any and all instruments for more fully and certainly vesting in and confirming to such
successor trustee all such rights, powers and trusts referred to in the preceding paragraph.

53

 

     (c) No successor Indenture Trustee shall accept appointment as provided in this Section 7.9
unless at the time of such acceptance such successor Indenture Trustee shall be eligible under the
provisions of Section 7.7 hereof.

     (d) Upon acceptance of appointment by a successor Indenture Trustee as provided in this
Section 7.9, the Servicer shall mail notice of the succession of such Indenture Trustee hereunder
to each Noteholder at its address as shown in the Note Register. If the Servicer fails to mail such
notice within ten days after acceptance of appointment by the successor Indenture Trustee, the
successor Indenture Trustee shall cause such notice to be mailed at the expense of the Issuer and
the Servicer.

       SECTION 7.10. Merger or Consolidation of Indenture Trustee.

     Any corporation into which the Indenture Trustee may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion or consolidation to
which the Indenture Trustee shall be a party, or any corporation succeeding to the corporate trust
business of the Indenture Trustee, shall be the successor of the Indenture Trustee
hereunder, provided, however, such corporation shall be eligible under the provisions of
Section 7.7 hereof, without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.

       SECTION 7.11. Appointment of Co-Indenture Trustee or Separate Indenture Trustee.

     (a) At any time or times for the purpose of meeting any legal requirement of any jurisdiction
in which any part of the Trust Estate may at the time be located or in which any action of the
Indenture Trustee may be required to be performed or taken, the Indenture Trustee, the Servicer or
the Agent, by an instrument in writing signed by it or them, may appoint, at the reasonable expense
of the Issuer and the Servicer, one or more individuals or corporations to act as separate trustee
or separate trustees or co-trustee, acting jointly with the Indenture Trustee, of all or any part
of the Trust Estate, to the full extent that local law makes it necessary for such separate trustee
or separate trustees or co-trustee acting jointly with the Indenture Trustee to act.
Notwithstanding the appointment of any separate or co-trustee, the Indenture Trustee shall remain
obligated and liable for the obligations of the Indenture Trustee under this Indenture.

     (b) The Indenture Trustee and, at the request of the Indenture Trustee, the Issuer shall
execute, acknowledge and deliver all such instruments as may be required by the legal requirements
of any jurisdiction or by any such separate trustee or separate trustees or co-trustee for the
purpose of more fully confirming such title, rights, or duties to such separate trustee or separate
trustees or co-trustee. Upon the acceptance in writing of such appointment by any such separate
trustee or separate trustees or co-trustee, it, he,
she or they shall be vested with such title to the Trust Estate or any part thereof, and with
such rights, powers, duties and obligations as shall be specified in the instrument of appointment,
and such rights, powers, duties and obligations shall be conferred or imposed upon and exercised or
performed by the Indenture Trustee, or the Indenture Trustee and such separate trustee or separate
trustees or co-trustees jointly with the Indenture Trustee subject to all the terms of this
Indenture, except to the extent that under any law of any jurisdiction in which any particular act
or acts are to be performed the

54

 

Indenture Trustee shall be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations shall be exercised and performed by such separate
trustee or separate trustees or co-trustee, as the case may be. Any separate trustee or separate
trustees or co-trustee may, at any time by an instrument in writing, constitute the Indenture
Trustee its attorney-in-fact and agent with full power and authority to do all acts and things and
to exercise all discretion on its behalf and in its name. In any case any such separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, the title to the Trust
Estate and all assets, property, rights, power duties and obligations and duties of such separate
trustee or co-trustee shall, so far as permitted by law, vest in and be exercised by the Indenture
Trustee, without the appointment of a successor to such separate trustee or co-trustee unless and
until a successor is appointed.

     (c) All provisions of this Indenture which are for the benefit of the Indenture Trustee shall
extend to and apply to each separate trustee or co-trustee appointed pursuant to the foregoing
provisions of this Section 7.11.

     (d) Every additional trustee and separate trustee hereunder shall, to the extent permitted by
law, be appointed and act and the Indenture Trustee shall act, subject to the following provisions
and conditions: (i) all powers, duties and obligations and rights conferred upon the Indenture
Trustee in respect of the receipt, custody, investment and payment of monies shall be exercised
solely by the Indenture Trustee; (ii) all other rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed and exercised or performed by the
Indenture Trustee and such additional trustee or trustees and separate trustee or trustees jointly
except to the extent that under any law of any jurisdiction in which any particular act or acts are
to be performed, the Indenture Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations (including the holding of title to
the Timeshare Properties in any such jurisdiction) shall be exercised and performed by such
additional trustee or trustees or separate trustee or trustees; (iii) no power hereby given to, or
exercisable by, any such additional trustee or separate trustee shall be exercised hereunder by
such trustee except jointly with, or with the consent of, the Indenture Trustee; and (iv) no
trustee hereunder shall be personally liable by reason of any act or omission of any other trustee
hereunder.

     If at any time, the Indenture Trustee shall deem it no longer necessary or prudent in order to
conform to such law, the Indenture Trustee shall execute and deliver all instruments and agreements
necessary or proper to remove any additional trustee or
separate trustee.

     (e) Any request, approval or consent in writing by the Indenture Trustee to any additional
trustee or separate trustee shall be sufficient warrant to such additional trustee or separate
trustee, as the case may be, to take such action as may be so requested, approved or consented to.

     (f) Upon either the appointment of a separate trustee or co-trustee, or the removal of a
separate trustee or co-trustee, the Indenture Trustee shall give prompt notice of such action by
written instrument to each of the Issuer, the Servicer, the Noteholders and the Agent.

55

 

     (g) Notwithstanding any other provision of this Section 7.11, the powers of any additional
trustee or separate trustee shall not exceed those of the Indenture Trustee hereunder.

       SECTION 7.12. Note Registrar Rights.

     So long as the Indenture Trustee is the Note Registrar, the Note Registrar shall be entitled
to the rights, benefits and immunities of the Indenture Trustee as set forth in this Article VII to
the same extent and as fully as though named in place of the Indenture Trustee.

       SECTION 7.13. Authorization.

     The Indenture Trustee is hereby authorized to enter into and perform each of the Transaction
Documents.

ARTICLE VIII.

COVENANTS

       SECTION 8.1. Payment of Principal and Interest.

     The Issuer will cause the due and punctual payment of the principal of and interest on the
Notes in accordance with the terms of the Notes and this Indenture.

       SECTION 8.2. Maintenance of Office or Agency; Chief Executive Office.

     The Issuer will maintain an office or agency in the State of Delaware at 160 Greentree Drive,
Suite 101, Dover, Delaware 19904, where notices and demands to or upon the Issuer in respect of the
Notes and this Indenture may be served.

       SECTION 8.3. Money for Payments to Noteholders to be Held in Trust.

     (a) All payments of amounts due and payable with respect to any Notes that
are to be made from amounts withdrawn from the Trust Accounts pursuant to Section 3.2, Section
3.3, Section 3.4 or Section 6.6 hereof shall be made on behalf of the Issuer by the Indenture
Trustee, and no amounts so withdrawn from the Collection Account for payments of Notes shall be
paid over to the Issuer under any circumstances except as provided in this Section 8.3, in Section
3.4 hereof or Section 6.6 hereof.

     (b) In making payments hereunder, the Indenture Trustee will hold all sums held by it for the
payment of amounts due with respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided
and pay such sums to such Persons as herein provided.

     (c) Except as required by applicable law, any money held by the Indenture Trustee in trust for
the payment of any amount due with respect to any Note and remaining unclaimed for three years
after such amount has become due and payable to the Noteholder shall be discharged from such trust
and, subject to applicable escheat laws, and so long as no Event of Default has occurred and is
continuing, paid to the Issuer upon request; otherwise, such amounts shall be redeposited in the
Collection Account as Available Funds, and such Noteholder shall thereafter,

56

 

as an unsecured general creditor, look only to the Issuer for payment thereof (but only to the
extent of the amounts so paid to the Issuer), and all liability of the Indenture Trustee with
respect to such trust money shall thereupon cease.

       SECTION 8.4. Existence; Merger; Consolidation, etc.

     (a) The Issuer will keep in full effect its existence, rights and franchises as a limited
liability company under the laws of the State of Delaware, and will obtain and preserve its
qualification to do business as a foreign statutory trust in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and enforceability of this
Indenture, the Notes or any of the Timeshare Loans.

     (b) The Issuer shall at all times observe and comply in all material respects with (i) all
laws applicable to it, (ii) all requirements of law in the declaration and payment of distributions
and (iii) all requisite and appropriate formalities in the management of its business and affairs
and the conduct of the transactions contemplated hereby.

     (c) The Issuer shall not (i) consolidate or merge with or into any other Person or convey or
transfer its properties and assets substantially as an entirety to any other Person or (ii)
commingle its assets with those of any other Person.

     (d) The Issuer shall not become an “investment company” or under the “control” of an
“investment company” as such terms are defined in the Investment Company Act of 1940, as amended
(or any successor or amendatory statute), and the rules and regulations thereunder (taking into
account not only the general definition of
the term “investment company” but also any available exceptions to such general definition);
provided, however, that the Issuer shall be in compliance with this Section 8.4 if
it shall have obtained an order exempting it from regulation as an “investment company” so long as
it is in compliance with the conditions imposed in such order.

       SECTION 8.5. Protection of Trust Estate; Further Assurances.

     The Issuer will from time to time execute and deliver all such supplements and amendments
hereto and all such financing statements, continuation statements, instruments of further
assurance, and other instruments, and will take such other action as may be necessary or advisable
to:

     (i) Grant more effectively the assets comprising all or any portion of the Trust
Estate;

     (ii) maintain or preserve the lien of this Indenture or carry out more effectively the
purposes hereof;

     (iii) publish notice of, or protect the validity of, any Grant made or to be made by
this Indenture and perfect the security interest contemplated hereby in favor of the
Indenture Trustee in each of the Timeshare Loans and all other property included in the
Trust Estate; provided, however, that the Issuer shall not be required to
cause the recordation of the Indenture Trustee’s name as lienholder on the related title
documents

57

 

for the Timeshare Properties so long as no Event of Default has occurred and is continuing;

     (iv) enforce or cause the Servicer to enforce any of the Timeshare Loans in accordance
with the Servicing Standard, provided, however, the Issuer will not cause
the Servicer to obtain on behalf of the Indenture Trustee or the Noteholders, any Timeshare
Property or to take any actions with respect to any property the result of which would
adversely affect the interests of the Indenture Trustee or the Noteholders (including, but
not limited to actions which would cause the Indenture Trustee or the related Noteholders
to be considered a holder of title, mortgagee-in-possession, or otherwise, or an “owner” or
“operator” of Timeshare Property not in compliance with applicable environmental statutes);
and

     (v) preserve and defend title to the Timeshare Loans (including the right to receive
all payments due or to become due thereunder), the interests in the Timeshare Properties,
or other property included in the Trust Estate and preserve and defend the rights of the
Indenture Trustee in the Trust Estate (including the right to receive all payments due or
to become due thereunder) against the claims of all Persons and parties other than as
permitted hereunder.

The Issuer, upon the Issuer’s failure to do so, hereby irrevocably designates the Indenture Trustee
and the Servicer, severally, its agents and attorneys-in-fact to execute any financing statement or
continuation statement or assignment of Mortgage required pursuant to this Section
8.5; provided, however, that such designation shall not be deemed to create a duty
in the Indenture Trustee to monitor the compliance of the Issuer with the foregoing covenants, and
provided, further, that the duty of the Indenture Trustee to execute any instrument
required pursuant to this Section 8.5 shall arise only if a Responsible Officer of the Indenture
Trustee has actual knowledge of any failure of the Issuer to comply with the provisions of this
Section 8.5.

       SECTION 8.6. Additional Covenants.

     (a) The Issuer will not:

     (i) sell, transfer, exchange or otherwise dispose of any portion of the Trust Estate
except as expressly permitted by this Indenture;

     (ii) claim any credit on, or make any deduction from, the principal of, or interest
on, any of the Notes by reason of the payment of any taxes levied or assessed upon any
portion of the Trust Estate;

     (iii) (A) permit the validity or effectiveness of this Indenture or any Grant hereby
to be impaired, or permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released from any
covenants or obligations under this Indenture, except as may be expressly permitted hereby,
(B) permit any lien, charge, security interest, mortgage or other encumbrance to be created
on or to extend to or otherwise arise upon or burden the Trust Estate or any part thereof
or any interest therein or the proceeds thereof other than the lien of this

58

 

Indenture, or (C) except as otherwise contemplated in this Indenture, permit the lien of
this Indenture not to constitute a valid first priority security interest in the Trust
Estate; or

     (iv) take any other action or fail to take any actions which may cause the Issuer to
be taxable as (A) an association pursuant to Section 7701 of the Code and the corresponding
regulations, (B) a publicly traded partnership taxable as a corporation pursuant to the
Section 7704 of the Code and the corresponding regulations or (C) a taxable mortgage pool
pursuant to Section 7701(i) of the Code and the corresponding regulations.

     (b) Notice of Events of Default and Amortization Events. Immediately, but in no event
more than three Business Days, upon becoming aware of the existence of any condition or event which
constitutes a Default or an Event of Default, a Servicer Event of Default or a Amortization Event,
the Issuer shall deliver to the Indenture Trustee, the Agent and each Purchaser a written notice
describing its nature and period of existence
and what action the Issuer is taking or proposes to take with respect thereto.

     (c) Report on Proceedings. Promptly upon the Issuer’s becoming aware of (i) any
proposed or pending investigation of it by any governmental authority or agency; or (ii) any
pending or proposed court or administrative proceeding which involves or may involve the
possibility of materially and adversely affecting the properties, business, prospects, profits or
condition (financial or otherwise) of the Issuer, the Issuer shall deliver to the Indenture
Trustee, each Purchaser and the Agent a written notice specifying the nature of such investigation
or proceeding and what action the Issuer is taking or proposes to take with respect thereto and
evaluating its merits.

       SECTION 8.7. Taxes.

     The Issuer shall pay all taxes when due and payable or levied against its assets, properties
or income, including any property that is part of the Trust Estate, except to the extent the Issuer
is contesting the same in good faith and has set aside adequate reserves in accordance with
generally accepted accounting principles for the payment thereof. The Issuer shall be disregarded
for federal income tax purposes.

       SECTION 8.8. Treatment of Notes as Debt for Tax Purposes.

     The Issuer shall treat the Notes as indebtedness for all federal, state and local income and
franchise tax purposes.

       SECTION 8.9. Hedge Agreements.

     The Issuer shall at all times maintain in place, for the benefit of the Secured Parties, Hedge
Agreements which satisfy the Hedge Requirements (after taking into account the addition of the new
Timeshare Loans on such funding date). The Issuer shall cause all payments made by the Hedge
Counterparty thereunder to be paid directly to the Indenture Trustee for deposit into the
Collection Account.

59

 

       SECTION 8.10. Further Instruments and Acts.

     Upon request of the Indenture Trustee, the Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.

ARTICLE IX.

SUPPLEMENTAL INDENTURES

       SECTION 9.1. [Reserved].

       SECTION 9.2. Supplemental Indentures.

     With the written consent of the Agent (and, to the extent such amendment would
have a material adverse effect on it, the Qualified Hedge Counterparty) delivered to the
Issuer and the Indenture Trustee, the Issuer, by a Issuer Order, and the Indenture Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying
in any manner the rights of the Noteholders under this Indenture. The Indenture Trustee shall
promptly deliver to the Agent a copy of any supplemental indenture entered into pursuant to Section
9.2 hereof.

       SECTION 9.3. Execution of Supplemental Indentures.

     In executing, or accepting the additional trusts created by, any supplemental indenture
pursuant to Section 9.2 hereof without the consent of each Holder of the Notes to the execution of
the same, or the modifications thereby of the trusts created by this Indenture, the Indenture
Trustee shall be entitled to receive, and (subject to Section 7.1 hereof) shall be, fully protected
in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall not be obligated
to, enter into any supplemental indenture which affects the Indenture Trustee’s own rights, duties,
obligations, or immunities under this Indenture or otherwise.

       SECTION 9.4. Effect of Supplemental Indentures.

     Upon the execution of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Notes theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.

       SECTION 9.5. Reference in Notes to Supplemental Indentures.

     Notes authenticated and delivered after the execution of any supplemental indenture pursuant
to this Article may, and shall if required by the Indenture Trustee, bear a notation in form
approved by the Indenture Trustee as to any matter provided for in such supplemental indenture. New
Notes so modified as to conform, in the opinion of the Indenture Trustee and the

60

 

Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and
authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes.

ARTICLE X.

BORROWINGS

       SECTION 10.1. Optional Borrowings. On any Business Day prior to the Facility
Termination Date (each a “Funding Date”), and subject to satisfaction of the following conditions,
additional amounts may be borrowed or reborrowed by the Issuer under the Notes (a “Borrowing”) and
from the Committed Purchasers under the Note
Funding Agreement: the Custodian and/or In-Transit Custodian shall have delivered to the Agent
the applicable Trust Receipt (with copies to parties specified in the Custodial Agreement and
In-Transit Custodial Agreement) with respect to the Timeshare Loan Documents related to the
Timeshare Loans being purchased by the Depositor and the Issuer on such Funding Date;

     (ii) no Funding Termination Event has occurred and is continuing and no such event
would result from the conveyance of such Timeshare Loans under the Purchase Agreement and
the Sale Agreement or hereunder;

     (iii) after giving effect to the purchase and transfer of Timeshare Loans by the
Depositor and the Issuer on such Funding Date, the Outstanding Note Balance shall not
exceed the Maximum Facility Balance and each Borrowing shall not exceed the Available
Borrowing Amount;

     (iv) after giving effect to the purchase and transfer of Timeshare Loans by the
Depositor and the Issuer on such Funding Date, the Hedge Requirement shall be satisfied;

     (v) no Authorized Officer of the Indenture Trustee has actual knowledge or has
received notice on or prior to such Funding Date that any conditions to such transfer have
not been fulfilled and the Indenture Trustee shall have received such other documents,
opinions, certificates and instruments as the Indenture Trustee may request;

     (vi) the Servicer shall have delivered to the Agent, each Purchaser and the Indenture
Trustee, a Borrowing Notice; and

     (vii) each of the conditions set forth in the Note Funding Agreement shall have been
satisfied, as certified to the Indenture Trustee, each Purchaser and the Agent in an
Officer’s Certificate of the Issuer.

ARTICLE XI.

SATISFACTION AND DISCHARGE

       SECTION 11.1. Satisfaction and Discharge of Indenture.

     (a) This Indenture shall cease to be of further effect (except as to any surviving rights of
registration of transfer or exchange of Notes herein expressly provided for), and the Indenture
Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when:

61

 

     (i) either:

     (A) all Notes theretofore authenticated and delivered
(other than (1) Notes which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 2.5 hereof and (2)
Notes for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter repaid to the
Issuer or discharged from such trust, as provided in Section 8.3(c) hereof)
have been delivered to the Indenture Trustee for cancellation upon payment
and discharge or the entire indebtedness on such Notes; or

     (B) the final installments of principal on all such Notes not
theretofore delivered to the Indenture Trustee for cancellation (1) have
become due and payable, or (2) will become due and payable at their Stated
Maturity, as applicable within one year, and the Issuer has irrevocably
deposited or caused to be deposited with the Indenture Trustee as trust
funds in trust for the purpose an amount sufficient to pay and discharge
the entire indebtedness on such Notes to the date of such deposit (in the
case of Notes which have become due and payable) or to the Stated Maturity
thereof, upon the delivery of such Notes to the Indenture Trustee for
cancellation,

     (ii) the Issuer and the Servicer have paid or caused to be paid all other sums payable
hereunder by the Issuer and the Servicer to the Indenture Trustee for the benefit of the
Noteholders and the Indenture Trustee, including proceeds of the Timeshare Loans pursuant to
Sections 3.4 or 6.6 hereof;

     (iii) the Issuer and the Servicer have paid or caused to be paid all sums payable by
the Issuer to the Qualified Hedge Counterparty, or sufficient funds have been deposited in
trust to pay such sums to the Qualified Hedge Counterparty;

     (iv) funds held in trust by the Indenture Trustee pursuant to Sections 11.1(a)(i) and
(ii) hereof for the purpose of paying and discharging the entire indebtedness on the Notes
have been applied to such purpose and the rights of all of the Noteholders to receive
payments from the Issuer have terminated;

     (v) following the completion of the actions provided in Sections 11.1(a)(i), (ii) and
(iii) hereof, the Indenture Trustee has delivered to the Issuer all cash, securities and
other property held by it as part of the Trust Estate; and

     (vi) the Issuer has delivered to the Indenture Trustee an Officer’s Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein provided for relating
to the satisfaction and discharge of this Indenture have been complied with.

     (b) Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Indenture Trustee under Section 7.6 hereof and, if money
shall have been

62

 

deposited with the Indenture Trustee pursuant to Section 11.1(a)(i) hereof, the obligations of the
Indenture Trustee under Section 11.2 hereof and Section 8.3(c) hereof shall survive.

       SECTION 11.2. Application of Trust Money.

     Subject to the provisions of Section 8.3(c) hereof, all money deposited with the Indenture
Trustee pursuant to Sections 11.1 and 8.3 hereof shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the payment to the Persons
entitled thereto, of the principal and interest for whose payment such money has been deposited
with the Indenture Trustee.

       SECTION 11.3. Trust Termination Date.

     The Trust Estate created by this Indenture shall be deemed to have terminated on the date that
the Indenture Trustee executes and delivers to the Issuer an instrument (which shall be prepared by
the Servicer) acknowledging that the requirements for satisfaction and discharge of the Indenture
set forth in Section 11.1 have occurred.

ARTICLE XII.

REPRESENTATIONS AND WARRANTIES

       SECTION 12.1. Representations and Warranties of the Issuer.

     The Issuer represents and warrants to the Indenture Trustee, the Servicer, the Agent, the
Purchasers, the Back-Up Servicer and the Noteholders, as of the Amendment Closing Date and on each
day until the discharge of this Indenture, as follows:

     (a) Organization and Good Standing. The Issuer has been duly formed and is validly
existing and in good standing under the laws of the State of Delaware, with power and authority to
own its properties and to conduct its business as such properties shall be currently owned and such
business is presently conducted and has the power and authority to own and convey all of its
properties and to execute and deliver this Indenture and the Transaction Documents and to perform
the transactions contemplated hereby and thereby;

     (b) Binding Obligation. This Indenture and the Transaction Documents to which it is a
party have each been duly executed and delivered on behalf of the Issuer and this Indenture and
each Transaction Document to which it is a party constitutes a legal, valid and binding obligation
of the Issuer enforceable in accordance with its terms except as may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting creditors’ rights and by general principles
of equity;

     (c) No Consents Required. No consent of, or other action by, and no notice to or
filing with, any Governmental Authority or any other party, is required for the due execution,
delivery and performance by the Issuer of this Indenture or any of the Transaction Documents or for
the perfection of or the exercise by the Indenture Trustee, the Agent or the Noteholders of any of
their rights or remedies thereunder which have not been duly obtained;

63

 

     (d) No Violation. The consummation of the transaction contemplated by this Indenture
and the fulfillment of the terms hereof shall not conflict with, result in any material breach of
any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a
default under, the certificate of formation, the operating agreement of the Issuer, or any
indenture, agreement or other instrument to which the Issuer is a party or by which it is bound;
nor result in the creation or imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement or other instrument (other than this Indenture);

     (e) No Proceedings. There is no pending or threatened action, suit or proceeding, nor
any injunction, writ, restraining order or other order of any nature against or affecting the
Issuer, its officers or directors, or the property of the Issuer, in any court or tribunal, or
before any arbitrator of any kind or before or by any Governmental Authority (i) asserting the
invalidity of this Indenture or any of the Transaction Documents, (ii) seeking to prevent the sale
and assignment of any Timeshare Loan or the consummation of any of the transactions contemplated
thereby, (iii) seeking any determination or ruling that might materially and adversely affect (A)
the performance by the Issuer of this Indenture or any of the Transaction Documents or the
interests of the Noteholders or the Purchasers, (B) the validity or enforceability of this
Indenture or any of the Transaction Documents, (C) any Timeshare Loan, or (D) the Intended Tax
Characterization, or (iv) asserting a claim for payment of money adverse to the Issuer or the
conduct of its business or which is inconsistent with the due consummation of the transactions
contemplated by this Indenture or any of the Transaction Documents;

     (f) Issuer Not Insolvent. The Issuer is solvent and will not become insolvent after
giving effect to the transactions contemplated by this Indenture and each of the Transaction
Documents;

     (g) Notes Authorized, Executed, Authenticated, Validly Issued and Outstanding. The
Notes have been duly and validly authorized, and when duly and validly executed and authenticated
by the Indenture Trustee in accordance with the terms of this Indenture and delivered to and paid
for by each Holder as provided herein, will be validly issued and outstanding and entitled to the
benefits hereof.

     (h) Location of Principal Place of Business and Records. The principal place of
business of the Issuer, and the office where the Issuer maintains all of its records is located at
10600 West Charleston Boulevard, Las Vegas, Nevada 89135.

     (i) Enforceability of Transaction Documents. Each of the Transaction
Documents to which it is a party has been duly authorized, executed and delivered by the
Issuer and constitutes the legal, valid and binding obligation of the Issuer, enforceable against
it in accordance with its terms.

     (j) Accuracy of Information. The representations and warranties of the Issuer in the
Transaction Documents are true and correct in all material respects as of the Amendment Closing
Date and, except for representations and warranties expressly made as of a different date, each
Transfer Date.

64

 

     (k) Special Purpose. The Issuer shall engage in no business, and take no actions, with
respect to any other transaction than the transactions contemplated by the Transaction Documents
and will otherwise maintain its existence separate from the Depositor and all other entities as
provided in its organizational documents.

     (l) Treatment Under Uniform Commercial Code. The Receivables constitute “tangible
chattel paper” or “electronic chattel paper” within the meaning of the Relevant UCC.

       SECTION 12.2. Representations and Warranties of the Initial Servicer.

     The initial Servicer hereby represents and warrants as of the Amendment Closing Date, the
following:

     (a) Organization and Authority. The Servicer:

     (i) is a corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada;

     (ii) has all requisite power and authority to own and operate its properties and to
conduct its business as currently conducted and as proposed to be conducted as contemplated
by the Transaction Documents to which it is a party, to enter into the Transaction
Documents to which it is a party and to perform its obligations under the Transaction
Documents to which it is a party; and

     (iii) has made all filings and holds all material franchises, licenses, permits and
registrations which are required under the laws of each jurisdiction in which the
properties owned (or held under lease) by it or the nature of its activities (including its
activities as Servicer hereunder) makes such filings, franchises, licenses, permits or
registrations necessary.

     (b) Place of Business. The address of the principal place of business and chief
executive office of the Servicer is 10600 West Charleston Boulevard, Las Vegas, Nevada 89135 and
there have been no other such locations since September 1, 2008.

     (c) Compliance with Other Instruments, etc. The Servicer is not in violation
of any term of its certificate of incorporation and by-laws. The execution, delivery and
performance by the Servicer of the Transaction Documents to which it is a party do not and will not
(i) conflict with or violate the certificate of incorporation or bylaws of the Servicer, (ii)
conflict with or result in a breach of any of the terms, conditions or provisions of, or constitute
a default under, or result in the creation of any Lien on any of the properties or assets of the
Servicer pursuant to the terms of any instrument or agreement to which the Servicer is a party or
by which it is bound, or (iii) require any consent of or other action by any trustee or any
creditor of, any lessor to or any investor in the Servicer.

     (d) Compliance with Law. The Servicer is in compliance with all statutes, laws and
ordinances and all governmental rules and regulations to which it is subject, the violation of
which, either individually or in the aggregate, could materially adversely affect its business,
earnings, properties or condition (financial or other). The policies and procedures set forth in
the

65

 

Collection Policy and Underwriting Guidelines are in material compliance with all applicable
statutes, laws and ordinances and all governmental rules and regulations. The execution, delivery
and performance of the Transaction Documents to which it is a party do not and will not cause the
Servicer to be in violation of any law or ordinance, or any order, rule or regulation, of any
federal, state, municipal or other governmental or public authority or agency.

     (e) Pending Litigation or Other Proceedings. There is no pending or, to the best of
the Servicer’s knowledge, threatened action, suit, proceeding or investigation before any court,
administrative agency, arbitrator or governmental body against or affecting the Servicer which, if
decided adversely, would materially and adversely affect (i) the condition (financial or
otherwise), business or operations of the Servicer, (ii) the ability of the Servicer to perform its
obligations under, or the validity or enforceability of this Indenture or any other documents or
transactions contemplated under this Indenture, (iii) any property or title of any Obligor to any
Timeshare Property or (iv) the Indenture Trustee’s ability to foreclose or otherwise enforce the
Liens of the Timeshare Loans.

     (f) Taxes. It has timely filed all tax returns (federal, state and local) which are
required to be filed and has paid all taxes related thereto, other than those which are being
contested in good faith.

     (g) Transactions in Ordinary Course. The transactions contemplated by this Indenture
are in the ordinary course of business of the Servicer.

     (h) Securities Laws. The Servicer is not an “investment company” or a company
“controlled” by an “investment company” within the meaning of the Investment Company Act of 1940,
as amended.

     (i) Proceedings. The Servicer has taken all action necessary to authorize the
execution and delivery by it of the Transaction Documents to which it is a party and the
performance of all obligations to be performed by it under the Transaction Documents.

     (j) Defaults. The Servicer is not in default under any material agreement, contract,
instrument or indenture to which it is a party or by which it or its properties is or are bound, or
with respect to any order of any court, administrative agency, arbitrator or governmental body
which would have a material adverse effect on the transactions contemplated hereunder. and to the
Servicer’s knowledge, as applicable, no event has occurred which with notice or lapse of time or
both would constitute such a default with respect to any such agreement, contract, instrument or
indenture, or with respect to any such order of any court, administrative agency, arbitrator or
governmental body.

     (k) Insolvency. The Servicer is solvent. Prior to the date hereof; the Servicer did
not, and is not about to, engage in any business or transaction for which any property remaining
with the Servicer would constitute an unreasonably small amount of capital. In addition, the
Servicer has not incurred debts that would be beyond the Servicer’s ability to pay as such debts
matured.

     (l) No Consents. No prior consent, approval or authorization of, registration,
qualification, designation, declaration or filing with, or notice to any federal, state or local
governmental or public authority or agency, is, was or will be required for the valid execution,

66

 

delivery and performance by the Servicer of the Transaction Documents to which it is a party. The
Servicer has obtained all consents, approvals or authorizations of, made all declarations or
filings with, or given all notices to, all federal, state or local governmental or public
authorities or agencies which are necessary for the continued conduct by the Servicer of its
respective businesses as now conducted, other than such consents, approvals, authorizations,
declarations, filings and notices which, neither individually nor in the aggregate, materially and
adversely affect, or in the future will materially and adversely affect, the business, earnings,
prospects, properties or condition (financial or other) of the Servicer.

     (m) Name. The legal name of the Servicer is as set forth in the signature page of this
Indenture and the Servicer does not have any trade names, fictitious names, assumed names or “doing
business as” names.

     (n) Information. No document, certificate or report furnished by the Servicer, in
writing, pursuant to this Indenture or in connection with the transactions contemplated hereby,
contains or will contain when furnished any untrue statement of a material fact or fails or will
fail to state a material fact necessary in order to make the statements contained therein, in light
of the circumstances under which they were made, not misleading. There are no facts relating to the
Servicer as of the Amendment Closing Date which when taken as a whole, materially adversely affect
the financial condition or assets or business of the Servicer, or which may impair the ability of
the Servicer to perform its obligations under this Indenture, which have not been disclosed herein
or in the certificates and other documents furnished by or on behalf of the Servicer pursuant
hereto
or thereto specifically for use in connection with the transactions contemplated hereby or
thereby.

     (o) Collection Policy. The Collection Policy attached hereto as Exhibit C
represent the policies of the Servicer and, to the best knowledge of the Servicer, is materially
consistent with the customary standard of prudent servicers of loans secured by timeshare
interests.

     SECTION 12.3. Representations and Warranties of the Indenture Trustee and Back-Up
Servicer.

     The Indenture Trustee and the Back-Up Servicer each hereby represent and warrant as of the
Amendment Closing Date, the following:

     (a) The Indenture Trustee and the Back-Up Servicer is each a national banking association duly
organized, validly existing and in good standing under the laws of the United States.

     (b) The execution and delivery of this Indenture and the other Transaction Documents to which
the Indenture Trustee or the Back-Up Servicer is a party, and the performance and compliance with
the terms of this Indenture and the other Transaction Documents to which the Indenture Trustee or
the Back-Up Servicer is a party by the Indenture Trustee or the Back-Up Servicer, as applicable,
will not violate the Indenture Trustee’s or the Back-Up Servicer’s organizational documents or
constitute a default (or an event which, with notice or lapse of time, or both, would constitute a
default) under, or result in a breach of, any material agreement or other material instrument to
which it is a party or by which it is bound.

67

 

     (c) Except to the extent that the laws of certain jurisdictions in which any part of the Trust
Estate may be located require that a co-trustee or separate trustee be appointed to act with
respect to such property as contemplated herein, the Indenture Trustee has the full power and
authority to carry on its business as now being conducted and to enter into and consummate all
transactions contemplated by this Indenture and the other Transaction Documents, has duly
authorized the execution, delivery and performance of this Indenture and the other Transaction
Documents to which it is a party, and has duly executed and delivered this Indenture and the other
Transaction Documents to which it is a party.

     (d) The Back-Up Servicer has the full power and authority to carry on its business as now
being conducted and to enter into and consummate all transactions contemplated by this Indenture
and the other Transaction Documents, has duly authorized the execution, delivery and performance of
this Indenture and the other Transaction Documents to which it is a party, and has duly executed
and delivered this Indenture and the other Transaction Documents to which it is a party.

     (e) This Indenture, assuming due authorization, execution and delivery by the
other parties hereto, constitutes a valid and binding obligation of each of the Indenture
Trustee and the Back-Up Servicer, enforceable against the Indenture Trustee and the Back-Up
Servicer in accordance with the terms hereof, subject to (i) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of creditors’ rights generally
and the rights of creditors of banks, and (ii) general principles of equity, regardless of whether
such enforcement is considered in a proceeding in equity or at law.

     (f) Neither the Indenture Trustee nor the Back-Up Servicer is in violation of, and its
execution and delivery of this Indenture and the other Transaction Documents to which it is a party
and its performance and compliance with the terms of this Indenture and the other Transaction
Documents to which it is a party will not constitute a violation of, any law, any order or decree
of any court or arbiter, or any order, regulation or demand of any federal, state or local
governmental or regulatory authority, which violation, in the
Indenture Trustee’s and the Back-Up
Servicer’s good faith and reasonable judgment, is likely to affect materially and adversely the
ability of the Indenture Trustee or the Back-Up Servicer, as applicable, to perform its obligations
under any Transaction Document to which it is a party.

     (g) No litigation is pending or, to the best of the Indenture Trustee’s and the Back-Up
Servicer’s knowledge, threatened against the Indenture Trustee or the Back-Up Servicer that, if
determined adversely to the Indenture Trustee or the Back-Up Servicer, would prohibit the Indenture
Trustee or the Back-Up Servicer, as applicable, from entering into any Transaction Document to
which it is a party or, in the Indenture Trustee’s and the Back-Up Servicer’s good faith and
reasonable judgment, is likely to materially and adversely affect the ability of the Indenture
Trustee or the Back-Up Servicer to perform its obligations under any Transaction Document to which
it is a party.

     (h) Any consent, approval, authorization or order of any court or governmental agency or body
required for the execution, delivery and performance by the Indenture Trustee or the Back-Up
Servicer of or compliance by the Indenture Trustee or the Back-Up Servicer with

68

 

the Transaction Documents to which it is a party or the consummation of the transactions
contemplated by the Transaction Documents has been obtained and is effective.

       SECTION 12.4. Multiple Roles.

     The parties expressly acknowledge and consent to Wells Fargo Bank, National Association,
acting in the multiple roles of the Indenture Trustee, the Custodian, the Back-Up Servicer and the
Successor Servicer. Wells Fargo Bank, National Association may, in such capacities, discharge its
separate functions fully, without hindrance or regard to conflict of interest principles, duty of
loyalty principles or other breach of fiduciary duties to the extent that any such conflict or
breach arises from the performance by Wells Fargo Bank, National Association of express duties set
forth in this Indenture in
any of such capacities, all of which defenses, claims or assertions are hereby expressly
waived by the other parties hereto except in the case of negligence (other than errors in judgment)
and willful misconduct by Wells Fargo Bank, National Association.

ARTICLE XIII.

MISCELLANEOUS

     SECTION 13.1. Statements Required in Certificate or Opinion.

     Each certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture shall include:

     (a) a statement that the Person making such certificate or opinion has read such covenant or
condition;

     (b) a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are based;

     (c) a statement that, in the opinion of such Person, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and

     (d) a statement as to whether or not, in the opinion of such Person, such condition or
covenant has been complied with.

       SECTION 13.2. Notices.

     (a) All communications, instructions, directions and notices to the parties thereto shall be
(i) in writing (which may be by facsimile transmission (or if permitted hereunder, via electronic
mail), followed by delivery of original documentation within one Business Day), (ii) effective when
received and (iii) delivered or mailed first class mail, postage prepaid to it at the following
address:

If to the Issuer:

Diamond Resorts Issuer 2008 LLC

10600 West Charleston Boulevard

69

 

Las Vegas, Nevada 89135

Attn: David Womer

With a copy to:

Diamond Resorts Corporation

10600 West Charleston Boulevard

Las Vegas, Nevada 89135

Attention: General Counsel

If to the Servicer:

Diamond Resorts Financial Services, Inc.

10600 West Charleston Boulevard

Las Vegas, Nevada 89135

Attention: David Womer

Electronic Mail Address: david.womer@diamondresorts.com

With a copy to:

Diamond Resorts Corporation

10600 West Charleston Boulevard

Las Vegas, Nevada 89135

Attention: General Counsel

If to the Indenture Trustee, Custodian or Back-Up Servicer:

Wells Fargo Bank, National Association

MAC N9311-161

Sixth & Marquette

Minneapolis, Minnesota 55479

Attention: Corporate Trust Services/Asset-Backed Administration

Facsimile Number: (612) 667-3539

Telephone Number: (612) 667-8058

Electronic Mail Address: collateral.management@wellsfargo.com

With a copy to:

ABS Custody Vault

1055 10th Avenue SE

MAC N9401-011

Minneapolis, MN 55414

Attention: Vault Manager

Facsimile Number: (612) 667-1080

If to the Agent:

Credit Suisse AG, Cayman Islands Branch

11 Madison Avenue

Conduit and Credit Products Group, 4th Floor

New York, New York 10010

70

 

Attention: Mark Golombeck

Telephone Number: (212) 325-9083

Facsimile Number: (212) 325-4599

Electronic Mail Address: abcp.monitoring@credit-suisse.com with a copy to

                                         mark.golombeck@credit-suisse.com and

                                         anita.johal@credit-suisse.com.

If to a Purchaser:

at the address set forth in the Note Funding Agreement

If the Qualified Hedge Counterparty:

Credit Suisse International

One Cabot Square

London E14 4QJ

England

Attention:    Head of Credit Risk Management

                    Managing Director — Operations Department

                    Managing Director — Legal Department

Telephone Number: 44 20 7888 2028

Facsimile Number:  44 20 7888 2686

          
                      (Attention: Managing Director — Legal Department)

or at such other address as the party may designate by notice to the other parties hereto, which
shall be effective when received.

     (b) All communications and notices pursuant hereto to a Noteholder or Purchaser shall be in
writing and delivered or mailed first class mail, postage prepaid or overnight courier at the
address shown in the Note Register. The Indenture Trustee agrees to deliver or mail to the Agent
upon receipt, all notices and reports that the Indenture Trustee may receive hereunder and under
any Transaction Documents (and such delivery may be by electronic mail). Unless otherwise provided
herein, the Indenture Trustee may consent to any requests received under such documents or, at its
option, follow the directions of the Agent within 30 days after prior written notice to the
Purchasers. All notices to Noteholders, Purchasers and the Agent shall be sent simultaneously.
Expenses for such communications and notices shall be borne by the Servicer.

       SECTION 13.3. No Proceedings.

     The Noteholders, the Servicer and the Indenture Trustee each hereby agrees that it will not,
directly or indirectly institute, or cause to be instituted, against the Issuer or the Trust Estate
any insolvency proceeding so long as there shall not have elapsed one year plus one day since the
last maturity of the Notes.

71

 

       SECTION 13.4. Limitation of Liability.

     It is expressly understood and agreed by the parties hereto that DFS is executing this
Indenture solely as Servicer and DFS undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture applicable to the Servicer.

       SECTION 13.5. Entire Agreement.

     This Indenture contains the entire agreement and understanding among the parties hereto with
respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent with any of the terms
hereof.

       SECTION 13.6. Severability of Provisions.

     If any one or more of the covenants, agreements, provisions or terms of this Indenture shall
be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions or terms of this
Indenture and shall in no way affect the validity or enforceability of the other provisions of this
Indenture or of the Notes or the rights of the Holders thereof.

       SECTION 13.7. Indulgences; No Waivers.

     Neither the failure nor any delay on the part of a party to exercise any right, remedy, power
or privilege under this Indenture shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or further exercise of
the same or of any other right, remedy, power or privilege, nor shall any waiver of any right,
remedy, power or privilege with respect to any occurrence be construed as a waiver of such right,
remedy, power or privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such waiver.

72

 

       SECTION 13.8. Benefit of Indenture.

     Each of the Qualified Hedge Counterparty shall be a third party beneficiary of this Indenture.

ARTICLE XIV.

NON-PETITION AND NON-RECOURSE

       SECTION 14.1. Limited Recourse Against Structured Purchaser.

     Each party to this Indenture hereby acknowledges and agrees that all transactions with a
Structured Purchaser under the Transaction Documents or in connection herewith shall be without
recourse of any kind to such Structured Purchaser. Each party hereto agrees that no liability or
obligation of a Structured Purchaser hereunder for fees, expenses or indemnities shall constitute a
claim (as defined in Section 101 of Title 11 of
the United States Bankruptcy Code) against such Structured Purchaser unless such Structured
Purchaser has received sufficient amounts pursuant to this Agreement to pay such amounts, and such
amounts are not necessary to pay outstanding commercial paper issued by such Structured Purchaser.
No recourse shall be had for any amount owing hereunder or any other obligation of, or claim
against a Structured Purchaser arising out of or based upon this Agreement or any agreement or
document entered into in connection herewith or therewith against any equity holder, member,
employee, officer, agent, or manager of such Structured Purchaser or any equity holder, member,
employee, officer, director, or affiliate thereof. The agreements set forth in this Section 15.1
and the parties’ respective obligations under this Section 15.1 shall survive the termination of
this Indenture.

       SECTION 14.2. No Bankruptcy Petition Against Structured Purchaser.

     Each of the parties to this Indenture hereby covenants and agrees that, prior to the date
which is one year and one day after the payment in full of all outstanding indebtedness for
borrowed money of any Structured Purchaser, it will not institute against, or join any other Person
in instituting against, such Structured Purchaser any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the Laws of the United
States or any state of the United States. The agreements set forth in this Section 15.2 and the
parties’ respective obligations under this Section 15.2 shall survive the termination of this
Indenture.

[Signatures on following page]

73

 

     IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of
the day and year first above written.

	 	 	 	 	 
	 	DIAMOND RESORTS ISSUER 2008 LLC, as Issuer

 	 
	 	By:  	/s/ David F. Palmer
 	 
	 	 	Name:  	David F. Palmer 	 
	 	 	Title:  	President 	 
	 
	 	DIAMOND RESORTS FINANCIAL SERVICES,
INC., 
as Servicer and individually

 	 
	 	By:  	/s/ David F. Palmer
 	 
	 	 	Name:  	David F. Palmer 	 
	 	 	Title:  	Executive Vice President 	 
	 

74

 

     IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of
the day and year first above written.

	 	 	 	 	 
	 	WELLS FARGO BANK, NATIONAL
ASSOCIATION, 
as Indenture Trustee, Custodian and Back-Up Servicer

 	 
	 	By:  	/s/ Cheryl Zimmerman
 	 
	 	 	Name:  	Cheryl Zimmerman 	 
	 	 	Title:  	Vice President 	 
	 

75

 

     IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of
the day and year first above written.

	 	 	 	 	 
	 	CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Agent

 	 
	 	By:  	/s/ Mark Golombeck
 	 
	 	 	Name:  	Mark Golombeck 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	                             /s/ Anita Johal
 	 
	 	 	Name:  	Anita Johal 	 
	 	 	Title:  	Vice President 	 
	 

76

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}]]