Document:

exv10w1

Exhibit 10.1

AMENDED AND RESTATED INVENTORY LOAN AND SECURITY AGREEMENT

by and among

TEXTRON FINANCIAL CORPORATION

and

MYSTIC DUNES MYRTLE BEACH, LLC,

and

MYSTIC DUNES, LLC

AS OF JUNE 30, 2011

 

TABLE OF CONTENTS

	 	 	 	 	 

	1. DEFINITIONS AND CONSTRUCTION
	 	 	2	 
	1.1 Definitions
	 	 	2	 
	1.2 Interpretation
	 	 	13	 
	1.3 Schedules and Exhibits
	 	 	14	 
	1.4 Accounting Principles
	 	 	14	 
	2. RESERVED
	 	 	14	 
	3. INVENTORY LOAN
	 	 	14	 
	3.1 General
	 	 	14	 
	3.2 General Restrictions
	 	 	15	 
	3.3 Use of Proceeds
	 	 	15	 
	3.4 Amounts in Excess of Inventory Loan Limit
	 	 	15	 
	3.5 No Advances 
	 	 	15	 
	4. LOAN DOCUMENTS AND LOAN ACCOUNT
	 	 	15	 
	4.1 Loan Documents
	 	 	15	 
	4.2 Loan Account
	 	 	15	 
	5. INTEREST RATE
	 	 	16	 
	5.1 Inventory Loan 
	 	 	16	 
	5.2 Default Rate
	 	 	16	 
	5.3 Calculation of Interest
	 	 	16	 
	5.4 Limitation on Interest
	 	 	16	 
	6. FEES AND LOAN COSTS
	 	 	17	 
	6.1 No Inventory Loan Commitment Fee
	 	 	17	 
	6.2 Late Charge
	 	 	17	 
	6.3 Loan Costs
	 	 	17	 
	6.4 General
	 	 	17	 
	7. PAYMENTS
	 	 	18	 
	7.1 Inventory Loan
	 	 	18	 
	7.2 Reinstatement of Obligations and Liens
	 	 	20	 
	8. COLLATERAL
	 	 	20	 
	8.1 Grant of Lien
	 	 	20	 
	8.2 Insurance of Collateral
	 	 	20	 

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	8.3 General and Continuing Lien
	 	 	20	 
	8.4 Additional Documents and Future Actions
	 	 	21	 
	8.5 Guaranty
	 	 	21	 
	8.6 Release of Inventory Collateral
	 	 	21	 
	9. CONDITIONS PRECEDENT TO THE CLOSING
	 	 	22	 
	9.1 Loan Documents
	 	 	22	 
	9.2 Opinions of Counsel
	 	 	22	 
	9.3 Representations, Warranties, Covenants and Agreements
	 	 	22	 
	9.4 No Prohibitions
	 	 	22	 
	9.5 Reserved
	 	 	22	 
	9.6 Governing Documents
	 	 	22	 
	9.7 Good Standing Certificates
	 	 	23	 
	9.8 Resolutions
	 	 	23	 
	9.9 Reserved
	 	 	23	 
	9.10 Environmental Report
	 	 	23	 
	9.11 Reserved
	 	 	23	 
	9.12 Title Insurance Policy
	 	 	23	 
	9.13 Closing Protection Letter
	 	 	23	 
	9.14 Evidence of Insurance
	 	 	23	 
	9.15 Litigation; Litigation Searches
	 	 	24	 
	9.16 Lien/Other Searches/Releases
	 	 	24	 
	9.17 Taxes and Assessments
	 	 	24	 
	9.18 Financial Statements
	 	 	24	 
	9.19 Expenses
	 	 	24	 
	9.20 Exchange Agreements
	 	 	24	 
	9.21 Management Agreement
	 	 	24	 
	9.22 Closing Checklist
	 	 	24	 
	9.23 Material Project Agreements
	 	 	25	 
	9.24 Licenses; Legal Requirements 
	 	 	25	 
	9.25 Due Diligence Inspections and Investigations
	 	 	25	 
	9.26 Miscellaneous
	 	 	25	 
	10. GENERAL CONDITIONS PRECEDENT TO ALL ADVANCES
	 	 	25	 
	10.1 Inventory Loan Advances
	 	 	25	 

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	11. FUNDING PROCEDURES
	 	 	27	 
	12. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
	 	 	27	 
	12.1 Organization; Power; Authorization
	 	 	27	 
	12.2 Affiliates and Capital Structure
	 	 	28	 
	12.3 Names and Addresses
	 	 	28	 
	12.4 Licenses
	 	 	28	 
	12.5 Compliance with Legal Requirements
	 	 	29	 
	12.6 Other Restrictions
	 	 	29	 
	12.7 Inventory Collateral
	 	 	29	 
	12.8 Liens
	 	 	30	 
	12.9 Taxes
	 	 	30	 
	12.10 Litigation Proceedings
	 	 	30	 
	12.11 Pension Plans
	 	 	31	 
	12.12 Financial Statements and Financial Condition
	 	 	31	 
	12.13 Solvency
	 	 	31	 
	12.14 Reserved
	 	 	32	 
	12.15 Investment Company
	 	 	32	 
	12.16 Enforceability
	 	 	32	 
	12.17 No Defaults
	 	 	32	 
	12.18 Use of Proceeds/Margin Stock
	 	 	32	 
	12.19 Labor Relations
	 	 	32	 
	12.20 Broker’s Fees
	 	 	32	 
	12.21 Inspections
	 	 	33	 
	12.22 Reserved
	 	 	33	 
	12.23 Books and Records
	 	 	33	 
	12.24 Reserved
	 	 	33	 
	12.25 No Payment of Dividends 
	 	 	33	 
	12.26 Management
	 	 	34	 
	12.27 Full Disclosure
	 	 	34	 
	12.28 Reserved
	 	 	34	 
	12.29 One-to-One Ratio
	 	 	34	 
	12.30 Change of Control 
	 	 	34	 

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	13. REPRESENTATIONS, WARRANTIES AND COVENANTS WITH RESPECT TO THE BORROWER PROJECT
	 	 	34	 
	13.1 Declarations
	 	 	34	 
	13.2 Access
	 	 	35	 
	13.3 Utilities
	 	 	35	 
	13.4 Parking
	 	 	35	 
	13.5 Legal Requirements; Zoning; Private Restrictions
	 	 	35	 
	13.6 Units Ready for Use
	 	 	35	 
	13.7 No Defaults
	 	 	35	 
	13.8 Tangible Property
	 	 	35	 
	13.9 Condition of the Borrower Project
	 	 	36	 
	13.10 Material Project Agreements
	 	 	36	 
	13.11 Reserved
	 	 	36	 
	13.12 Certificates of Occupancy
	 	 	36	 
	13.13 Reserved
	 	 	36	 
	13.14 Tests, Etc
	 	 	36	 
	13.15 Taxes
	 	 	37	 
	13.16 Amenities
	 	 	37	 
	13.17 Developer Subsidy
	 	 	37	 
	13.18 Reservation System
	 	 	37	 
	13.19 Reserved
	 	 	37	 
	13.20 Leases
	 	 	38	 
	13.21 Transactions with Affiliates
	 	 	38	 
	13.22 Reserved
	 	 	38	 
	13.23 Maintenance of Insurance 
	 	 	38	 
	14. TIMESHARE REPRESENTATIONS, WARRANTIES AND COVENANTS
	 	 	40	 
	14.1 Licenses
	 	 	40	 
	14.2 Reserved
	 	 	40	 
	14.3 Sales and Marketing Practices
	 	 	40	 
	14.4 Reserved
	 	 	41	 
	14.5 Assessments
	 	 	41	 
	14.6 Reserved
	 	 	41	 
	14.7 Exchange Company
	 	 	41	 

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	14.8 Public Offering Statements
	 	 	41	 
	14.9 Reserved
	 	 	41	 
	14.10 Management Agreement
	 	 	41	 
	14.11 State Registrations 
	 	 	41	 
	14.12 Cessation of Sales Business 
	 	 	41	 
	14.13 Pricing 
	 	 	41	 
	14.14 Remarketing of Defaulted Inventory 
	 	 	42	 
	14.15 Encumbering Timeshare Interests 
	 	 	42	 
	14.16 Voting Rights 
	 	 	42	 
	15. REPORTING REQUIREMENTS
	 	 	43	 
	15.1 Annual Financial Statements
	 	 	43	 
	15.2 Quarterly Financial Statements
	 	 	44	 
	15.3 SEC Reports
	 	 	44	 
	15.4 Covenant Compliance Certificate
	 	 	44	 
	15.5 Sales and Inventory Reports; Project Results
	 	 	44	 
	15.6 Budgets and Assessments
	 	 	45	 
	15.7 Reserved
	 	 	45	 
	15.8 Audit Reports
	 	 	45	 
	15.9 Notice of Default or Event of Default
	 	 	45	 
	15.10 Notice of Claimed Default
	 	 	45	 
	15.11 Material Adverse Developments
	 	 	45	 
	15.12 Other Information
	 	 	45	 
	16. SUBORDINATED INDEBTEDNESS
	 	 	46	 
	17. EVENTS OF DEFAULT
	 	 	46	 
	17.1 Payments
	 	 	46	 
	17.2 Covenant Defaults
	 	 	46	 
	17.3 Warranties or Representations
	 	 	47	 
	17.4 Enforceability of Liens
	 	 	47	 
	17.5 Involuntary Proceedings
	 	 	47	 
	17.6 Proceedings
	 	 	47	 
	17.7 Attachment; Judgment; Tax Liens
	 	 	47	 
	17.8 Failure to Deliver Payments and Removal of Inventory Collateral
	 	 	47	 

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	17.9 Documents
	 	 	47	 
	17.10 Reserved
	 	 	47	 
	17.11 Material Adverse Change
	 	 	48	 
	17.12 One-to-One Ratio
	 	 	48	 
	17.13 Merger or Dissolution
	 	 	48	 
	17.14 Default by Borrower or Guarantor Under Other Agreements
	 	 	48	 
	17.15 Reserved
	 	 	48	 
	17.16 Loss of License
	 	 	48	 
	17.17 Suspension of Sales
	 	 	48	 
	17.18 Reserved
	 	 	48	 
	17.19 Breach of Other Agreements
	 	 	48	 
	17.20 Fraud
	 	 	48	 
	17.21 Reserved
	 	 	49	 
	17.22 Insolvency 
	 	 	49	 
	17.23 Reserved
	 	 	49	 
	17.24 Change of Control 
	 	 	49	 
	17.25 Financial Condition 
	 	 	49	 
	17.26 Cessation of Sales or Business 
	 	 	49	 
	17.27 Observance of Loan Documents 
	 	 	49	 
	17.28 Change in Marketing Agent, Manager or Servicer 
	 	 	49	 
	18. TERMINATION OF OBLIGATION TO ADVANCE/REMEDIES
	 	 	49	 
	18.1 Termination of Obligation to Advance
	 	 	49	 
	18.2 Remedies Upon Default
	 	 	50	 
	18.3 Sale of Inventory Collateral
	 	 	53	 
	18.4 Application of Proceeds
	 	 	54	 
	18.5 Delegation of Duties and Rights
	 	 	54	 
	18.6 Lender Not in Control
	 	 	54	 
	18.7 Rights of Lender Regarding Inventory Collateral 
	 	 	54	 
	18.8 Waivers
	 	 	55	 
	18.9 Cumulative Rights
	 	 	56	 
	18.10 Diminution in Value of Collateral
	 	 	57	 
	18.11 Discontinuance of Proceedings
	 	 	57	 
	18.12 Indemnification of Lender Parties
	 	 	57	 

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	19. CERTAIN RIGHTS OF LENDER
	 	 	58	 
	19.1 Suits to Protect the Inventory Collateral
	 	 	58	 
	19.2 Protection of Inventory Collateral
	 	 	58	 
	19.3 Performance by Lender
	 	 	58	 
	19.4 No Liability of Lender
	 	 	58	 
	19.5 Right to Defend Action Affecting Security
	 	 	59	 
	19.6 Indemnities, Loan Costs and Expenses
	 	 	59	 
	19.7 Lender’s Right of Set-Off
	 	 	59	 
	19.8 Assignment of Lender’s Interest
	 	 	59	 
	19.9 Lender’s Appointment as Attorney-in-Fact
	 	 	60	 
	20. MISCELLANEOUS
	 	 	61	 
	20.1 Notices
	 	 	61	 
	20.2 Survival; Continuation and Reliance
	 	 	62	 
	20.3 Governing Law; Consent to Jurisdiction
	 	 	63	 
	20.4 Invalid Provisions
	 	 	63	 
	20.5 Successors and Assigns; Third Party Beneficiaries
	 	 	63	 
	20.6 Counterparts; Effectiveness
	 	 	64	 
	20.7 Lender Not Fiduciary
	 	 	64	 
	20.8 Total Agreement; Amendments
	 	 	64	 
	20.9 Consents, Approvals and Discretion
	 	 	64	 
	20.10 Litigation
	 	 	64	 
	20.11 Consent to Advertising and Publicity of Documents
	 	 	65	 
	20.12 Use of Lender’s Name
	 	 	65	 
	20.13 Control of a Material Party
	 	 	65	 
	20.14 Directly or Indirectly
	 	 	66	 
	20.15 No Duty
	 	 	66	 
	20.16 Reimbursement for Taxes
	 	 	66	 
	20.17 Investigations and Inquiries
	 	 	66	 
	20.18 Sale of Participation Interests in Inventory Loan 
	 	 	66	 
	20.19 No Third Party Beneficiaries 
	 	 	66	 
	20.20 Non-Public Information; Confidentiality
	 	 	67	 
	20.21 Headings
	 	 	67	 
	20.22 Borrower’s Knowledge
	 	 	67	 

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	20.23 Gender
	 	 	67	 
	20.24 Time of the Essence
	 	 	67	 
	20.25 Conflict
	 	 	67	 

viii

 

AMENDED AND RESTATED INVENTORY LOAN AND SECURITY AGREEMENT

     THIS AMENDED AND RESTATED INVENTORY LOAN AND SECURITY AGREEMENT is made effective as of June
30, 2011 by and between MYSTIC DUNES MYRTLE BEACH, LLC, a Delaware limited liability company
(“Borrower”), MYSTIC DUNES, LLC, a Delaware limited liability company (“Mystic
Dunes” or “Guarantor”) and TEXTRON FINANCIAL CORPORATION, a Delaware corporation
(“Lender”).

RECITALS

     WHEREAS, pursuant to the Joint Plan of Reorganization filed on or about March 22, 2011, and
confirmed by the Bankruptcy Court on May 6, 2011 for Case No. 6:10-bk-20709KSJ (the “Plan”)
and the order of May 6, 2011 confirming the Plan (“Bankruptcy Court Order”), Lender has
agreed to enter into this Agreement with Borrower;

     WHEREAS, Backstage Myrtle Beach, LLC, a Florida limited liability company (“Original
Borrower”) and Lender previously entered into that certain Receivables and Inventory Loan and
Security Agreement dated as of November 5, 2008, as amended from time to time (collectively, the
“Original Loan Agreement”);

     WHEREAS, pursuant to the Plan, and the Bankruptcy Court Order, as of the Plan’s effective date
(i) Original Borrower is being reorganized into a new entity, Mystic Dunes, LLC, a Delaware limited
liability company, (ii) Original Borrower shall convey all of its right, title and interest in the
Inventory Collateral to Mystic Dunes, free and clear of Liens, (iii) all legal and beneficial
interests in the Inventory Collateral are transferred and assigned by Mystic Dunes, LLC to Borrower
as of the Closing Date, free and clear of all Liens (other than the liens created in favor of
Lender) in consideration of the assumption by Borrower of the rights and obligations of the
Original Borrower as set forth in this Agreement, and (iv) this Agreement will replace and
supersede in its entirety the Original Loan Agreement;

     WHEREAS, the parties hereto desire to be legally bound by the terms and conditions of this
Agreement along with all exhibits attached hereto and related contractual agreements referenced
herein, the terms and conditions of which are incorporated herein by this reference;

     WHEREAS, the Pledged Inventory along with other Inventory Collateral encumbered by the Lien of
Lender’s Mortgage serve to secure Borrower’s repayment of the Inventory Loan to Lender.

     NOW, THEREFORE, for an in consideration of the foregoing Recitals, and the covenants and
agreements hereinafter set forth and for other good and valuable consideration, the legal adequacy
and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:

EXECUTION VERSION

 

     1. Definitions and Construction.

          1.1 Definitions. The following words and phrases as used in capitalized form in this
Agreement, whether in the singular or plural, shall have the meanings indicated:

     Advance. A portion of the proceeds of the Inventory Loan advanced from time to time by Lender
to Borrower in accordance with the terms of this Agreement.

     Affiliate. Any party or entity controlled by, controlling, or under common control with,
Borrower or Guarantor.

     Agreement. This Amended and Restated Inventory Loan and Security Agreement between Borrower,
Guarantor and Lender.

     Amenities. The recreational, access and utility facilities to be included as of or to benefit
the Project, as such amenities may be further described in the Timeshare Declaration and/or the
Public Offering Statement.

     Assessments. The assessments made against each Timeshare Interest and the Owner thereof
pursuant to the terms of the Timeshare Declaration.

     Association. Dunes Village Vacation Owners’ Association, a South Carolina non-profit
corporation.

     Bankruptcy Case. means the case filed by the Original Borrower on November 19, 2010 under the
Bankruptcy Code; the case is being administered under Case Number 6:10-bk-20709-KSJ in the
Bankruptcy Court.

     Bankruptcy Code means Title II of the United States Code, 11 U.S.C. §§ 101 et. seq.

     Bankruptcy Court means the United States Bankruptcy Court for the District of Florida or any
other court having jurisdiction over the Bankruptcy Case from time to time.

     Base Rate. For any particular date, the U.S. dollar rate listed as “London Interbank Offered
Rate (LIBOR) three months” published on that date in the “Money Rates” section of The Wall Street
Journal (or in a generally recognized substitute financial reporting service which Lender may, in
its discretion, determine to use for such reference from time to time) or if not published on that
date, the rate in effect on the previous Business Day, rounded upward to the nearest one-sixteenth
of one percent. The applicable Base Rate will be determined by Lender on the first day of each
calendar month.

     Borrower. Mystic Dunes Myrtle Beach, LLC, a Delaware limited liability company.

2

 

     Borrower Project. That portion of the Project acquired by the Original Borrower and
originally consisting of 20 Units, otherwise known as the
“Fractional Vacation Ownership for the Dunes Village Resort” consisting of a “vacation ownership
timesharing plan” as that term is defined in the Timeshare Act.

     Business Day. Each day which is not a Saturday or Sunday or a legal holiday under the laws of
the state of Connecticut, the state of Nevada, the state of Rhode Island, the state of South
Carolina or the United States.

     Change of Control If (i) Guarantor ceases to own 100% of Borrower, or (ii) TAC ceases to
own 100% of Guarantor.

     Closing Attorney. Collectively, the closing attorney and escrow agent (who shall be a duly
licensed South Carolina attorney) selected by Borrower and approved by Lender. The current closing
attorney and escrow agent is Clemmons Law Firm, LLC.

     Closing Date. June 30, 2011.

     Collateral Assignment of Management Agreement. That certain “Collateral Assignment of
Management Agreement and Contracts” dated as of the Closing Date executed by Borrower in favor of
Lender pursuant to which Borrower collaterally assigns to Lender all of the Borrower’s right, title
and interest in and to all Management Agreements and Contracts, as it may be amended, modified or
restated from time to time.

     Collateral Assignment of Declarant Rights. That certain recorded “Collateral Assignment of
Declarant Rights” dated as of the Closing Date executed by Borrower in favor of Lender that
collaterally assigns all of the Declarant Rights as defined therein to Lender, as it may be
amended, modified or restated from time to time.

     Collateral Assignment of Intellectual Property Rights. That certain “Collateral Assignment and
Security Agreement for Intellectual Property Rights” dated as of the Closing Date executed by
Borrower in favor of Lender that collaterally assigns all of Borrower’s Intellectual Property
rights to Lender, as it may be amended, modified or restated from time to time.

     Collateral Assignments. Collectively, the Collateral Assignment of Declarant Rights, the
Collateral Assignment of Intellectual Property Rights and the Collateral Assignment of Management
Agreement.

     Common Area. The Property and the Improvements located on the Property which are not part of
a Unit and which may be shared in common with other Purchasers, as further described and defined in
the Condominium Declaration.

     Condominium Act. S.C. Code Ann. § 27-31-10, et. seq. (1986 Supp.) or any successor thereto or
replacement thereof, as the same may be amended from time to time and any rules and regulations
promulgated thereunder.

3

 

     Condominium Association. Dunes Village Property Owners’ Association, Inc., a South Carolina
non-profit corporation of which Borrower is a member by virtue of its present ownership of certain
Units in the Project.

     Condominium Declaration. With respect to the Project, that certain Master Deed for Dunes
Village Horizontal Property Regime dated October 10, 2007 and recorded on October 16, 2007, as
Instrument No. 2007000146944 in Deed Book 3284, Page 2688, in the Public Records at Horry County,
South Carolina, as such document may be amended from time to time.

     Debtor Relief Laws. Any applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, insolvency, reorganization or similar law, proceeding or device providing for the
relief of debtors from time to time in effect and generally affecting the rights of creditors.

     Declarations. Collectively, the Condominium Declaration and the Timeshare Declaration.

     Default. An event or condition, the occurrence of which immediately is or, with the passage
of time or the giving of notice or both, becomes an Event of Default.

     Default Rate. The Inventory Loan Interest Rate plus four percent (4%) per annum, provided
that, the Default Rate shall not exceed the highest lawful rate.

     Defaulted Inventory. As such term is defined in Section 14.14 (a) below.

     Defaulted Inventory Financing. As such term is defined in Section 14.14(b) below.

     Defaulted TBS’ Owned Timeshare Loan(s). Any timeshare loan in TBS’ receivables portfolio
which is 120 days or more delinquent at the time of measurement.

     Division. The South Carolina Division of Real Estate, the regulatory agency in the state in
which the Project is located which regulates and supervises timeshare projects and matters related
thereto.

     DRC. Diamond Resorts Corporation, a Maryland corporation, and its successors or assigns.

     DRFS. Diamond Resorts Financial Services, Inc., a Nevada corporation, and its successors or
assigns.

     DRC Affiliates. Manager, Marketing Agent, Servicer and any other entities affiliated with DRC
which enter into agreements or a Material Project Agreement with the Borrower or Guarantor in
connection with the Borrower Project, the Association, the Condominium Association or this
Agreement.

4

 

     Dunes Village Points Equivalent Timeshare Interest. As such term is defined in Section
7.1(b)(iii) below.

     Escrow Agreement. That certain Escrow Agreement dated as of the Closing Date (or within 45
days subsequent to the Closing Date) by and among Borrower, Lender and First American Title
Insurance Company, as it may be amended, modified or restated from time to time.

     Event of Default. Each event described in Section 17 below.

     Exchange Company. Resort Condominiums International, Interval International, or such other
internal exchange program utilized by DRC and/or DRC Affiliates from time to time, approved by
Lender.

     Financial Statements. The monthly, quarterly and annual financial statements and reports
required to be provided to Lender under this Agreement.

     GAAP. Generally accepted accounting principles, applied on a consistent basis, as described
in Opinions of the Accounting Principles Board of the American Institute of Certified Public
Accountants and/or in statements of the Financial Accounting Standards Board which are applicable
in the circumstances as of the date in question.

     Governing Documents. The certificate or articles of incorporation or formation, bylaws,
partnership agreement, joint venture agreement, trust agreement, operating agreement or other
organization or governing documents of any Person.

     Guarantor. Mystic Dunes, LLC, a Delaware limited liability company.

     Guaranty. That certain “Guaranty Agreement” dated as of the Closing Date, and executed and
delivered to Lender in connection with this Agreement by Guarantor, as it may be amended, modified
or restated from time to time.

     Improvements. All site work, site improvements, infrastructure, buildings, structures,
recreational facilities and appurtenances now located on the portion of the Property constituting
the Borrower Project.

     Indemnified Lender Parties. Lender and all participants acquiring any interest in the
Inventory Loan, and all of their parents, subsidiaries, affiliates, officers, directors, agents,
employees, representatives, consultants, contractors and attorneys, as well as their respective
heirs, personal representatives, successors and assigns.

     Intellectual Property. All of the trademarks, service marks, copyrights and any other
intellectual property associated with the Borrower Project.

     Inventory Collateral. Collectively, all now owned or hereafter existing or acquired right,
title and interest of Borrower in and to all of the following:

5

 

          (a) All existing and future Pledged Inventory more fully described in the Lender’s Mortgage as
encumbered at any time by the Lien of Lender’s Mortgage, together with all appurtenant rights and
interests directly relating to the Pledged Inventory, including without limitation, appurtenant
rights and interests in and to Units for specific use periods, Common Areas, common elements, other
facilities related to the Borrower Project, Improvements, furniture, fixtures, equipment,
easements, servitudes, licenses, rights of way, privileges, access rights, use rights pursuant to
the Declarations, use rights related to the Amenities, rights under Material Project Agreements and
rights under any agreement or document directly relating to the Pledged Inventory, and all
extensions, betterments, substitutions, Improvements and replacements thereof;

          (b) All existing and future leases, subleases, licenses, concessions, entry fees or other
agreements which grant a possessory interest in and to, or the right of use to the Pledged
Inventory or any portion thereof;

          (c) All existing and future rents, revenues, income, proceeds, royalties, profits and other
benefits payable for using, leasing, licensing, possessing, or otherwise enjoying the Pledged
Inventory;

          (d) All existing and future documents, instruments, accounts, chattel paper, rights to Release
Payments from sales and general intangibles relating to the Pledged Inventory, but specifically
excluding, all promissory notes, purchase agreements and other agreements or rights arising out of
or in connection with the sale to DRC or any of the DRC Affiliates of Timeshare Interests;

          (e) All existing and future books, records, reports, computer tapes, computer disks and
software relating exclusively to the Pledged Inventory or any other Inventory Collateral, and
Intellectual Property that relate to but are non-exclusive to the Pledged Inventory and the
software, contractual rights and non-exclusive licenses for the Borrower’s Project’s reservation
system, if any;

          (f) All existing and future rights of Borrower as the Owner of the Pledged Inventory,
including without limitation all rights under the Declarations;

          (g) All existing and future cash, money, deposit accounts collection accounts, clearing
accounts, escrow accounts or reserve account with cash or proceeds for Release Payments, and all
rights of setoff, and all benefits, claims, accounts, accounts receivables general intangibles,
choses in action, claims, credits, balance and proceeds relating thereto or deriving therefrom and
other property of Borrower directly related to the Pledged Inventory;

          (h) All existing and future rights of Borrower under the Material Project Agreements;

          (i) The Collateral Assignments;

6

 

          (j) All present and future inventory, general intangibles used in connection with, and placed
or to be placed on or under the Pledged Inventory and the cash or non-cash proceeds thereof.

          (k) Extensions, additions, modifications, improvements, betterments, renewals, substitutions
and replacements of, for or to any of the foregoing wherever located, together with the products,
proceeds, revenues, income, issues, rents and profits thereof, including without limitation,
proceeds deriving from enforcement of any rights or benefits, and any replacements, additions or
accessions thereto or substitutions thereof, and all rights or claims in or under insurance
policies and to the proceeds of any insurance policies covering any of the foregoing, all rights to
unearned or refunded insurance premiums, and the proceeds of any insurance or condemnation awards
or judgments, tax refunds, or any claims directly relating to the Pledged Inventory; and

          (l) All products and proceeds of the foregoing.

     Inventory Loan. The non-revolving credit inventory loan facility to be advanced on the terms
set forth in this Agreement in an amount not to exceed the Inventory Loan Limit.

     Inventory Loan Interest Rate. A variable rate, adjusted as of the first day of each calendar
month, equal to the sum of the Base Rate as of the first day of the applicable calendar month, plus
5.50% per annum, provided that, such Base Rate, when used to calculate the Inventory Loan Interest
Rate, shall never be less than 2.0% per annum.

     Inventory Loan Limit. $4,300,000.

     Inventory Loan Maturity Date. Initially June 30, 2016, subject to one two-year extension to
June 30, 2018, upon sixty (60) days prior written notice from Borrower to Lender, provided that no
Event of Default then exists and is continuing, and upon payment of $200,000 by Borrower to Lender
as an extension fee, payable at the time the extension option is exercised.

     Inventory Loan Note. That certain “Inventory Loan Promissory Note” dated as of the Closing
Date evidencing Borrower’s obligation to repay the Inventory Loan, executed by Borrower and payable
to the order of Lender, as it may be amended, modified or restated from time to time.

     Inventory Recovery Fee. As such term is defined in Section 14.14(a) below.

     Legal Requirements. All federal, state and local ordinances, laws, regulations, orders,
judgments, decrees, determinations and other legal restrictions governing the Project, the Material
Parties, their businesses or operations, the sale of Timeshare Interests in the Borrower Project,
the financing of sales of Timeshare Interests in the Borrower Project, the marketing of Timeshare
Interests in the Borrower Project and all matters related thereto, including without limitation:
(a) the Condominium Act, (b) the

7

 

Timeshare Act, (c) the Consumer Credit Protection Act; (d) Regulation Z of the Federal Reserve
Board; (e) the Equal Credit Opportunity Act; (f) Regulation B of the Federal Reserve Board; (g) the
Federal Trade Commission’s 3-day cooling off rule for Door-to Door Sales (h) Section 5 of the
Federal Trade Commission Act; (i) the Interstate Land Sales Full Disclosure Act; U) federal postal
laws; (k) all applicable state and federal securities laws; (l) all applicable usury laws; (m) all
applicable trade practices, home and telephone solicitation, sweepstakes, anti-lottery and consumer
credit and protection laws; (n) all applicable real estate sales licensing, disclosure, reporting
and escrow laws; (o) the Americans with Disability Act; (p) the Real Estate Settlement Procedures
Act; (q) the Gramm-Leach-Bliley Act; (r) the United and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA Patriot Act); (s)
all amendments to and rules, regulations and orders promulgated under the foregoing acts or laws;
and (t) all zoning, environmental and other land use laws and regulations, subdivision map acts,
blue sky laws, real estate syndication acts and usury laws.

     Lender. Textron Financial Corporation, a Delaware corporation, its successors and assigns.

     Lender’s Mortgage. That certain “Inventory Mortgage, Assignment of Leases and Rents and
Security Agreement” dated as of the Closing Date from Borrower, as mortgagor to Lender, as
mortgagee, encumbering the Pledged Inventory and other Inventory Collateral related thereto, and
all amendments, modifications and supplements thereto.

     Licenses. All franchises, certificates, operating rights, licenses, permits, consents,
authorizations, approvals, registrations, filings, qualifications, exceptions, orders and other
items required by applicable governmental authorities or applicable Legal Requirements to permit a
Person to take certain actions, engage in certain businesses, own certain assets or otherwise
engage in a particular activity in compliance with all applicable Legal Requirements.

     Lien. Any interest in real, personal or intangible property securing an obligation owed to,
or claimed by, a Person other than the owner of the real, personal or intangible property, whether
such interest is based on the common law, statute or contract, and including, but not limited to
attachments, judgments or tax liens and the security interest or lien arising from a security
agreement, assignment, mortgage, deed of trust, encumbrance, pledge, conditional sale or trust
receipt of a lease, consignment or bailment for security purposes. The term “Lien” shall include
reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases and other title exceptions and encumbrances affecting real property.

     Loan Accounts. As such term is defined in Section 4.2 below

     Loan Costs. All costs, expenses and fees incurred by or on behalf of Lender in connection
with the Inventory Loan, including without limitation, those related to negotiating, preparing,
documenting, closing and enforcing this Agreement and all other

8

 

Loan Documents including, but not limited to: (a) the reasonable legal fees, expenses and
disbursements of Lender’s counsel; (b) all costs, fees and expenses relating to any Advances,
amendments, waivers or consents; (c) all costs, fees and expenses of every kind and character
incurred in (i) the interpretation or enforcement of any of the provisions of, or the creation,
preservation or exercise of rights and remedies under, any of the Loan Documents, including the
costs of appeal, and (ii) the preparation for, negotiations regarding, consultations concerning, or
the defense or prosecution of legal proceedings involving any claim or claims made or threatened
against Borrower or Lender arising out of this transaction or the preservation and protection of
the Inventory Collateral securing the Obligations or Advances made hereunder, or in any way related
to the Borrower Project or the Borrower, expressly including, without limitation, the defense by
Lender of any legal proceedings instituted or threatened by any Person to seek to recover or set
aside any payment or setoff theretofore received or applied by Lender with respect to the
Obligations, and any and all appeals thereof, and all responses to subpoenas, requests for
production of documents, and other discovery matters, regardless of whether Lender is named in the
legal proceedings; (d) all costs, fees and expenses relating to preserving and protecting the
Inventory Collateral or exercising any rights or remedies with respect to the Inventory Collateral,
regardless of whether suit is filed, including without limitation, insurance premiums and expenses,
Taxes (including Taxes arising from the sale of any Inventory Collateral), shipping costs, and
costs, fees, and expenses in enforcing, preserving or protecting Lender’s Lien against the
Inventory Collateral; (e) all indemnification obligations of Borrower and Guarantor under the Loan
Documents; (f) all Taxes payable by Borrower or related to the Borrower Project, recording fees,
title insurance premiums and other title charges, document copying, transmittal and binding costs,
appraisal fees, lien, judgment and litigation search costs, fees of architects, engineers,
environmental consultants, surveyors and any special consultants, construction inspection fees,
brokers fees, escrow fees, wire transfer fees, and all reasonable travel and out-of-pocket expenses
of Lender to conduct inspections or audits, including without limitation, the costs of Lien and
other searches, recording or filing fees and premiums on the Title Insurance Policy delivered to
Lender pursuant to this Agreement; and (g) all reasonable costs and expenses of Lender related to
any meetings with Borrower, Guarantor or other Persons related to the transactions contemplated
hereunder, audits or inspections of Borrower or the Borrower Project, including without limitation,
reasonable travel expenses (subject, in the case of travel expenses, to the provisions of
Section 12.21 hereof.) Notwithstanding the foregoing to the contrary, Lender agrees not to
include costs incurred in the Original Borrower’s bankruptcy, including Lender’s legal fees, but
Lender shall include Holland & Knight’s legal fees incurred in documenting the subject Inventory
Loan transaction as part of Loan Costs hereunder.

     Loan Documents. Collectively, this Agreement, the Inventory Loan Note, the Guaranty, the
Collateral Assignments, the Lender’s Mortgage, the Escrow Agreement, financing statements covering
the Inventory Collateral, to be filed in all offices necessary to perfect Lender’s Liens in the
Inventory Collateral; and such other agreements, documents, instruments, certificates and materials
as Lender may request to evidence the Obligations, to evidence and perfect the rights and Liens of
Lender

9

 

contemplated by the Loan Documents, and to effectuate the transactions contemplated herein.

     Management Agreement. Collectively, that certain Management Agreement executed between the
Association and the Manager dated as of January 16, 2009 for the management of the Borrower Project
and any new management agreement executed in its place, all of which agreements and any amendments
thereto or renewals thereof must be in form and content approved by Lender in writing and that
certain Management Subcontract Agreement by and between Manager and Pan American Vacation
Management, LLC dated as of June 20, 2008 pursuant to which Manager has subcontracted with Pan
American Vacation Management, LLC to provide certain of the management services that are required
of Manager under the above referenced “Management Agreement”.

     Manager. Collectively, Mystic Dunes, LLC, a Delaware limited liability company, an Arizona
corporation, its successors or assigns, which successors or assigns are subject to Lender’s prior
written consent, and Pan American Vacation Management, LLC pursuant to the Management Subcontract
Agreement.

     Marketing Agent. Diamond Resorts International Marketing, Inc., a California corporation, its
successors or assigns, which successors or assigns are subject to Lender’s prior written consent,
which company will enter into the Transfer Pricing Agreement with Borrower.

     Material Adverse Effect. A material adverse effect on any of the following: (a) the property,
business, operations or financial condition of Borrower or Guarantor, (b) the ability of Borrower,
Guarantor or a Material Party to perform each of their respective obligations under any of the Loan
Documents or Material Project Agreements, (c) the legality, validity or enforceability of any of
the Loan Documents, (d) the rights and remedies of the Lender under any of the Loan Documents, or
(e) the validity, perfection or priority of a Lien in favor of the Lender on any material part of
the Inventory Collateral.

     Material Party. Borrower, Guarantor, the Association, DRC, the DRC Affiliates, and any other
Affiliate of Borrower or Guarantor directly involved in the operation of the Borrower Project or
the purchase of Timeshare Interests.

     Material Project Agreements. (a) The Declarations, (b) the Governing Documents of the
Association and the Condominium Association, (c) the rules and regulations for the use and
occupancy of the Borrower Project, (d) the Management Agreement, (e) any affiliation or Exchange
Company agreement, (f) the Transfer Pricing Agreement, and (g) all other contracts, agreements and
arrangements relating to the creation, ownership, operation, management, marketing, sale and
maintenance of the Borrower Project involving payments in excess of $200,000 in anyone year period;
as such contracts, agreements and arrangements may be amended, restated, extended or supplemented
from time to time and any new contracts, agreements or arrangements entered into in place of or in
addition thereto, all of which must be in form and content

10

 

reasonably acceptable to Lender. Schedule 13.10 attached hereto sets forth a list of
the Material Project Agreements existing as of the date of this Agreement.

     Negative Covenant. Any covenant contained in any Loan Document pursuant to which Borrower or
any Material Party agrees not to take any particular action or Borrower agrees not to permit or
cause any Material Party to take any particular action.

     Obligations. All amounts due or becoming due to Lender in respect of the Inventory Loan, and
any of the Loan Documents, including principal, interest, late charges, Loan Costs, indemnity
obligations, contributions, Taxes, insurance, attorneys’ and paralegals’ fees and expenses and
other fees or expenses incurred by Lender or advanced to or on behalf of Borrower by Lender
pursuant to this Agreement or any of the Loan Documents, and the prompt and complete payment and
performance by Borrower of all covenants, obligations, indebtedness and liabilities pursuant to
this Agreement or any of the Loan Documents.

     One-to-One Ratio. As such term is defined in Section 12.29 below.

     Orlando Resort. As such term is defined in Section 7.1(b)(iii) below.

     Owner. Any Person who owns one or more Timeshare Interests and Borrower with respect to all
Timeshare Interests that have not been sold or that have been reacquired by an Affiliate of
Borrower.

     Permitted Exceptions. Those permitted Liens and exceptions to title to the Inventory
Collateral described on Schedule 12.7 attached hereto.

     Person. An individual, a government or any agency or subdivision thereof, a corporation,
partnership, trust, unincorporated organization, association, joint stock company, limited
liability company or other legal entity.

     Pledged Inventory. Any Timeshare Interest owned by Borrower which at any time is encumbered
by the Lien of the Lender’s Mortgage.

     Points Equivalent Timeshare Interest. As such term is defined in Section 7.1(b)(iii)
below.

     Project. The Property, all Improvements now or hereafter located thereon and the timeshare
project thereon, known as “Dunes Village” located at 5200 North Ocean Boulevard, Myrtle Beach,
Horry County, South Carolina.

     Property. The real property described on Exhibit A attached hereto located at 5200
North Ocean Boulevard, Myrtle Beach, Horry County, South Carolina, together with all easements and
other rights appurtenant thereto.

     Public Offering Statement. Collectively, the approved public report, permit or public
offering statement for the Borrower Project in South Carolina, Florida and in each

11

 

other jurisdiction in which sales of Timeshare Interests are made or the Borrower Project is
otherwise required to be licensed, approved or registered.

     Public Records. The office in Horry County, South Carolina in which deeds, mortgages, deeds
of trust and other documents affecting interests in real estate are recorded.

     Purchaser. DRC or a DRC Affiliate as a purchaser of a Timeshare Interest or Timeshare
Interests.

     Release Payment. As such term is defined in Section 7.1(b)(iii) below.

     Sales Center. As such term is defined in Section 7.1(b)(iii).

     SCRA. The Servicemembers’ Civil Relief Act, formerly known as the Soldiers’ and Sailors’
Civil Relief Act.

     Security. Defined in Section 2(a)(1) of the Securities Act of 1933, as amended.

     Subordinated Indebtedness. As such term is defined in Section 16 below.

     TAC. Tempus Acquisition, LLC, a Delaware limited liability company.

     Taxes. All real property, personal property, withholding, payroll, business, profits, income,
sales, transfer, general intangible, mortgage, documentary, recording, ad valorem and other taxes
and assessments.

     TBS. Textron Business Services, Inc., a Delaware corporation, the owner of TBS’ Owned
Timeshare Loan Portfolio.

     TBS’ Owned Timeshare Loan(s). One or more timeshare loans which at any time make up TBS’
receivables portfolio related to the Borrower Project, title to all of which timeshare loans is
owned by TBS’ as of the Closing Date pursuant to the terms of the Plan.

     Timeshare Act. SC Code Ann. § 27-32-10, et. seq. (1986 Supp.) or any successor thereto or
replacement thereof, as the same may be amended from time to time and any rules and regulations
promulgated thereunder.

     Timeshare Approvals. As such term is defined in Section 14.2 below.

     Timeshare Declaration. With respect to the Borrower Project, that certain Declaration of
Fractional Vacation Ownership Plan for Dunes Village Resort executed by Borrower and recorded on
January 15, 2009 in Deed Book 3382 at Page 1465 and re-recorded on January 21, 2009 in Deed Book
3383 at Page 203 in the Public Records of Horry County, South Carolina, as such document may be
amended, modified or restated from time to time.

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     Timeshare Interest. A “Fractional Interest” as defined in the Timeshare Declaration,
consisting of an undivided 1/52 or 1/104 fee title interest in a Unit in the Borrower Project, as
tenant-in-common, with the Owners of other “Fractional Interests” in such Unit, together with the
exclusive right to reserve, use and occupy a Unit of such type and the common furnishings therein
for a use period for which such right to use have been properly reserved, subject to the provisions
of the Public Offering Statement, the Timeshare Declaration, Association Bylaws and the rules and
regulations, and including a non-exclusive right to use any and all easements appurtenant to the
Project, and a non-exclusive right to use the Common Area in the Project.

     Title Company. An American Land Title Association company selected by Borrower and approved
by Lender which is authorized and duly licensed to carry on a title insurance business in the state
in which the Project is located. The Title Company currently used by Borrower is First American
Title Insurance Company.

     Title Insurance Policy. A mortgagee’s title policy issued by the Title Company and a
mortgagee’s title insurance commitment along with the required endorsements is included as part of
Exhibit B attached hereto, insuring the Lender’s Mortgage in the amount of the Inventory
Loan Limit as a first priority Lien (against the Pledged Inventory and related Inventory
Collateral) subject only to the exceptions described on Exhibit B attached hereto, issued
in the name of Lender and its successors and assigns, as mortgagee.

     Transfer Pricing Agreement. Any agreement between Borrower and the Marketing Agent for the
purchase of Timeshare Interests in the Borrower Project by DRC or a DRC Affiliate which will be
entered into subsequent to the Closing Date, subject to Lender’s prior written consent.

     Unit. One individual air space living unit in a building incorporated into the Borrower
Project pursuant to the Declarations, together with all related or appurtenant Common Areas and
related or appurtenant interests in services, easements or other rights or benefits, as set forth
in the Declarations.

          1.2 Interpretation. Unless the context of this Agreement clearly requires otherwise,
references to the plural include the singular, references to the singular include the plural, the
term “including” is not limiting, and the term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,”
“hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement. An Event of Default shall “continue” or be “continuing”
until such Event of Default has been waived in writing by Lender. Section, subsection, clause,
schedule, and exhibit references are to sections, subsections, clauses, schedules and exhibits in
this Agreement unless otherwise specified. Any reference in this Agreement or in the Loan
Documents to this Agreement, any of the Loan Documents or any other document or agreement shall
include all alterations, amendments, changes, extensions, modifications, renewals, replacements,
substitutions, supplements, and restatements thereto and thereof, as applicable.

13

 

          1.3 Schedules and Exhibits. All of the schedules and exhibits attached to this
Agreement, as they may from time to time be amended or restated, shall be deemed incorporated
herein by reference.

          1.4 Accounting Principles. Where the character or amount of any asset or liability or
item of income or expense is required to be determined or any consolidation or other accounting
computation is required to be made for the purposes of this Agreement, the same shall be determined
or made in accordance with GAAP consistently applied at the time in effect, to the extent
applicable, except where such principles are inconsistent with the requirements of this Agreement.

     2. Reserved.

     3. Inventory Loan.

          3.1 General. Upon and subject to the conditions set forth in this Agreement, Lender
shall make the following Advances under the Inventory Loan to Borrower and Borrower shall borrow
from Lender the amount of such Advances subject to Lender’s Lien pursuant to the terms of this
Agreement and the Loan Documents.

          (a) Lender shall make an Advance on the Closing Date to fund 100% of the aggregate dollar
amount of all Pledged Inventory as of the Closing Date less $100,000, based on the type of Unit and
amounts as set forth below:

	 	 	 	 	 
	Unit Type	 	Amount Per Timeshare Interest
	Studio
	 	$	2,800	 
	One Bedroom
	 	$	3,300	 
	Two Bedroom
	 	$	3,800	 
	Three Bedroom
	 	$	5,800	 
	Four Bedroom
	 	$	6,800	 

          (b) Lender shall make an Advance on the Closing Date and up to three (3) Advances subsequent
to the Closing Date to fund the agreed upon closing costs as determined by Borrower and Lender;

          (c) Lender will make an Advance on or before the fifteenth (15th) day of each
April, July, October and January during the term of the Inventory Loan equal to the aggregate
purchase price paid by Borrower to Lender or an affiliate of Lender to purchase all of the
Defaulted TBS’ Owned Timeshare Loans as of the last day of the calendar quarter preceding the month
during which the subject Advance is made under the Inventory Loan. The purchase price paid by
Borrower shall be based on the Unit Type of Timeshare Interest associated with each Defaulted TBS’
Owned Timeshare Loan as set forth in Section 3.1(a) above.

          (d) The beginning balance of the Inventory Loan as of the Closing Date is $3,876,217.

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          3.2 General Restrictions. Notwithstanding anything herein or elsewhere to the
contrary, Borrower shall not be entitled to, and Lender shall have no obligation to make, any
Advance under the Inventory Loan which would cause the outstanding principal balance of the
Inventory Loan to exceed the Inventory Loan Limit; provided however, if Lender does not make the
required Advance under the Inventory Loan, there will be no further purchase by Borrower of
Defaulted Inventory as set forth in Section 3.1(c) above.

          3.3 Use of Proceeds. Borrower agrees to use the proceeds of Advances under the
Inventory Loan solely (a) to refinance the existing inventory loan with Lender, to pay closing
costs and other Loan Costs and to reacquire Defaulted Inventory from Lender or its Affiliates. If
Borrower uses any proceeds of Advances under the Inventory Loan for purposes not permitted under
this Agreement, as determined by Lender in its sole discretion, Lender shall have no obligation to
make any further Advances under the Inventory Loan.

          3.4 Amounts in Excess of Inventory Loan Limit. Lender shall have the right, but not
the obligation, to fund amounts in excess of the Inventory Loan Limit from time to time to pay
accrued and unpaid interest, to pay fees due under the Loan Documents, to pay Loan Costs or
indemnification obligations of Borrower and Guarantor under the Loan Documents, or to correct or
cure any Default or Event of Default. Borrower agrees that the correcting or curing by Lender of a
Default or Event of Default shall not cure the Default or Event of Default under this Agreement.
Such excess amounts funded by Lender shall be deemed evidenced by the Inventory Loan Note, to the
fullest extent possible, and then by this Agreement, shall bear interest at the Default Rate and
shall also be secured by the Inventory Collateral, the Guaranty and the other Loan Documents.
Borrower hereby agrees to execute additional notes and other additional Loan Documents, and
modifications thereto, promptly upon request by Lender, in favor of Lender, evidencing and securing
amounts funded in excess of the Inventory Loan Limit.

          3.5 No Advances. Other than the Advances described in this Section 3, no
further Advances shall be made under the Inventory Loan.

     4. Loan Documents and Loan Account.

          4.1 Loan Documents. All Loan Documents shall be satisfactory in form and substance to
Lender and Lender’s counsel. Borrower’s obligation to repay the Inventory Loan shall be evidenced
by the Inventory Loan Note, and the Inventory Loan Note shall be payable with interest as provided
herein.

          4.2 Loan Account. Lender shall open and maintain on its books one or more loan
accounts (each a “Loan Account” and collectively, the “Loan Accounts”) with respect
to Advances made, repayments, the computation and payment of interest and fees and the computation
and final payment of all other amounts due and sums paid to Lender under this Agreement, and the
Inventory Loan. Lender shall deliver monthly statements regarding the Loan Accounts to Borrower.
Except in the case of

15

 

manifest error in computation, the Loan Accounts shall be conclusive and binding on Borrower
as to the amount at any time due to Lender from Borrower under this Agreement, the Inventory Loan
Note as an account stated, except to the extent that Lender receives a written notice from Borrower
of any specific objections of Borrower thereto within thirty (30) days after the date the
applicable Loan Account statement has been mailed by Lender.

     5. Interest Rate.

          5.1 Inventory Loan. The outstanding principal balance of the Inventory Loan shall
bear interest in arrears at a variable rate per annum equal to the Inventory Loan Interest Rate.
All of such interest shall be due and payable as set forth in Sections 5.3 and 7.1(a)
below. The outstanding principal balance of the Inventory Loan shall bear interest as of Lender’s
wiring of funds of each applicable Advance through Lender’s receipt of repayment of the Inventory
Loan. If any payment is received by Lender later than noon, Eastern Time, then interest accrual
shall be through the next Business Day following such receipt.

          5.2 Default Rate. Interest shall accrue on all sums otherwise payable by Borrower to
Lender under the Loan Documents, upon the occurrence of an Event of Default or at any time
thereafter, or after the Inventory Loan Maturity Date, at Lender’s sole election, at the Default
Rate. Borrower acknowledges and agrees that the Default Rate is reasonable in light of the
increased risk of collection after the occurrence of an Event of Default. Any judgment obtained by
Lender for any Obligations of Borrower with respect to the Inventory Loan shall accrue interest at
the Default Rate until paid.

          5.3 Calculation of Interest. Interest shall be calculated on the basis of a year of
three hundred sixty (360) days and charged upon the actual number of days elapsed.

          5.4 Limitation on Interest. Lender and Borrower intend to comply at all times with
applicable usury laws. All agreements between Lender and Borrower, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in no contingency,
whether by reason of demand or acceleration of the maturity of the Loan or otherwise, shall the
interest contracted for, charged, received, paid or agreed to be paid to Lender exceed the highest
lawful rate permissible under applicable usury laws. If, from any circumstance whatsoever
fulfillment of any provision hereof of the Inventory Loan Note or of any other Loan Documents shall
involve transcending the limit of such validity prescribed by any law which a court of competent
jurisdiction may deem applicable hereto, then ipso facto, the obligation to be fulfilled shall be
reduced to the limit of such validity; and if from any circumstance Lender shall ever receive
anything of value deemed interest by applicable law which would exceed the highest lawful rate,
such amount which would be excessive interest shall be applied to the reduction of the principal of
or the Inventory Loan and not to the payment of interest, or if such excessive interest exceeds the
unpaid balance of principal of the Inventory Loan, such excess shall be refunded to Borrower. All
interest paid or agreed to be paid to Lender shall, to the extent permitted by applicable law, be
amortized, prorated,

16

 

allocated and spread throughout the full period until payment in full of the principal so that
the interest on the Inventory Loan for such full period shall not exceed the highest lawful rate.
Borrower agrees that in determining whether or not any interest payment under the Loan Documents
exceeds the highest lawful rate, any non-principal payment (except payments specifically described
in the Loan Documents as “interest”) including without limitation, prepayment fees and late
charges, shall to the maximum extent not prohibited by law, be an expense, fee, premium or penalty
rather than interest. Lender hereby expressly disclaims any intent to contract for, charge or
receive interest in an amount which exceeds the highest lawful rate. The provisions of this
Agreement, the Inventory Loan Note, and all other Loan Documents are hereby modified to the extent
necessary to conform with the limitations and provisions of this Section, and this Section shall
govern over all other provisions in any document or agreement now or hereafter existing. This
Section shall never be superseded or waived unless there is a written document executed by Lender
and Borrower, expressly declaring the usury limitation of this Agreement to be null and void, and
no other method or language shall be effective to supersede or waive this paragraph.

     6. Fees and Loan Costs.

          6.1 No Inventory Loan Commitment Fee. There is no commitment fee or advance fee
payable by Borrower with respect to the Inventory Loan.

          6.2 Late Charge. In the event that any payment required hereunder is not received by
Lender within five (5) days after the due date, Borrower agrees to pay a late charge equal to five
percent (5%) of such past due payment to defray the expenses incident to handling such delinquent
payments, and to compensate Lender for the harm and damages related to such late payments.
Borrower hereby acknowledges and agrees that such late charges are reasonable in light of the
anticipated and the actual harm caused by the late payments; the difficulties of proof of loss,
harm and damages; and the inconvenience and non-feasibility of Lender otherwise obtaining an
adequate remedy. Borrower agrees that such late charges are imposed as reasonable liquidated
damages and not as a penalty.

          6.3 Loan Costs. Borrower agrees to pay to Lender all Loan Costs upon notice from
Lender that any such Loan Costs are due and payable. If Borrower fails to pay any of such Loan
Costs, Lender may at its option, but shall not be required to, pay the same and Borrower agrees to
reimburse Lender immediately for such amount with interest accruing on such amount at the Default
Rate for the Inventory Loan until paid. All Loan Costs and all other sums which Borrower is
required to reimburse Lender shall be included as part of the Obligations and shall be secured by
the Inventory Collateral and the Guaranty. The provisions of this Section shall survive
termination of this Agreement.

          6.4 General. All of the fees described above are not refundable in whole or in part.
Lender is irrevocably authorized to advance the sums necessary to pay all or any portion of such
fees and Loan Costs when due and payable to itself from the proceeds of an Advance under the
Inventory Loan.

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     7. Payments.

          7.1 Inventory Loan. Borrower agrees punctually to pay or cause to be paid to Lender
when due all principal and interest due in respect of the Inventory Loan and all other Obligations
related to the Inventory Loan or provided for under the Loan Documents. Borrower agrees to make
the following payments on the Inventory Loan:

          (a) Interest. Interest only on the outstanding principal balance of the Inventory
Loan shall accrue and is payable monthly on the first (1st) day of each month commencing
on the first (1st) day of August, 2011 (interest accrued from the Closing Date through
July 31, 2011) and continuing on the first day of each month thereafter during the term of the
Inventory Loan. Failure by Borrower to make the foregoing payments as required shall result in an
Event of Default hereunder.

          (b) Principal.

               (i) The entire outstanding principal balance of the Inventory Loan, all accrued and unpaid
interest thereon and all other sums due in connection therewith shall be payable in full, if not,
earlier paid pursuant to the terms of this Agreement and the other Loan Documents, on the Inventory
Loan Maturity Date.

               (ii) In addition to all other payments required, upon the sale of each Timeshare Interest
comprising part of the Pledged Inventory, Borrower shall make a principal reduction payment on the
Inventory Loan in an amount equal to the Release Payment for such Timeshare Interest and a
mandatory principal paydown of the Inventory Loan as set forth in Section 7.1(b)(iv) below.
Each Release Payment shall be made in connection with the sale of the applicable Timeshare
Interest as set forth in Section 7.1(b)(iii) below.

               (iii) Release Payments: It is Borrower’s intention that “Diamond Club Points” shall
be marketed for sale by Marketing Agent through the sales center currently located at the Mystic
Dunes Resort and Golf Club (the “Orlando Resort”) in Orlando, Florida (the “Sales
Center”). Within ten (10) days after the end of each calendar month during the term of the
Inventory Loan, (A) all Diamond Club Points sold through the Sales Center the previous month and
with respect to which any and all rescission rights of the Purchasers have expired, shall be
converted to the equivalent number of Timeshare Interests at the Borrower Project (the “Points
Equivalent Timeshare Interests”) based on a conversion formula to be delivered to and approved
by Lender subsequent to the Closing Date, in connection with the execution and delivery of the
Transfer Pricing Agreement, (B) DRC or a DRC Affiliate will purchase from Borrower the Points
Equivalent Timeshare Interests at the purchase price set forth therefor in the Transfer Pricing
Agreement to be finalized by Borrower and DRC or a DRC Affiliate and delivered to and approved by
Lender subsequent to the Closing Date, and (C) in consideration for the partial release of Lender’s
Mortgage, Borrower shall pay to Lender an amount equal to the number of Dunes Village Points
Equivalent Timeshare Interests times $4,800 (such amount is the “Release Payment”), which
Release Payment shall be applied by Lender to reduce the outstanding Loan Costs, accrued

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interest and the principal balance of the Inventory Loan. For purposes hereof, “Dunes
Village Points Equivalent Timeshare Interests” is the number of Points Equivalent Timeshare
Interests for such month times 11.18% which percentage is agreed to by Borrower and Lender as of
the Closing Date and will not be revised thereafter unless Borrower and Lender consent to any
revision thereof. Upon receipt of the aggregate Release Payments paid to Lender by the tenth
(10th) day of each month, Lender shall sign a partial release of Lender’s Mortgage to
release from the Lien thereof the applicable Points Equivalent Timeshare Interests at the Borrower
Project for which the Release Payments have been paid. The payment of the Release Payments and the
partial release of Lender’s Mortgage shall be done in accordance with the Escrow Agreement.

               (iv) Mandatory Principal Paydown of Inventory Loan: Notwithstanding the payment of
Release Payments as set forth in Section 7.1 (b)(iii) above, Borrower shall reduce the
outstanding principal balance of the Inventory Loan to the minimum principal balance as set forth
below by the dates set forth below.

	 	 	 	 	 
	Time	 	Minimum Principal Inventory Loan Balance
	June 30, 2012
	 	$	3,267,000	 
	June 30, 2013
	 	$	2,746,000	 
	June 30, 2014
	 	$	2,210,000	 
	June 30, 2015
	 	$	1,658,000	 
	June 30, 2016
	 	$	0	 

Alternatively, if the Inventory Loan Maturity Date is extended to June 30, 2018 pursuant to the
terms of this Agreement, the principal reduction schedule above is revised as follows.

	 	 	 	 	 
	Time	 	Minimum Principal Inventory Loan Balance
	June 30, 2016
	 	$	1,089,399	 
	June 30, 2017
	 	$	503,488	 
	June 30, 2018
	 	$	0	 

If the Borrower has not reduced the principal balance of the Inventory Loan to the amount set forth
above by the dates set forth above, Borrower shall make a cash payment to Lender equal to the
difference between the referenced minimum principal balance of the Inventory Loan set forth above
for each stated period of time and the actual outstanding principal balance of the Inventory Loan
at the corresponding time period. Such payment shall be made within fifteen (15) days after the
end of such stated 12-month period as set forth in the above charts.

               (c) Final Payment. The entire outstanding principal balance of the Inventory Loan,
together with all accrued interest thereon and all other Obligations related thereto, if not paid
sooner, shall be paid in full on the Inventory Loan Maturity Date.

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               (d) Voluntary Prepayment of Inventory Loan. Borrower may prepay the Inventory Loan,
in whole or in part, at any time without premium or penalty.

               (e) Application of Payments. Unless an Event of Default has occurred and continues
uncured, all payments received by Lender with respect to the Inventory Loan shall be applied by
Lender to the Obligations in the following order: (a) to the payment of Loan Costs, fees, expenses,
late charges, reimbursement obligations and indemnity obligations then due and payable or otherwise
then owed to Lender under the Loan Documents, (b) to the payment of any accrued and unpaid interest
on the Inventory Loan, and (c) to the reduction of the principal balance of the Inventory Loan.
Upon the occurrence of an Event of Default and while such Event of Default continues uncured, such
payments received by Lender may be applied by Lender to the Obligations in such order of priority
and in such amounts as Lender may elect in its sole discretion.

          7.2 Reinstatement of Obligations and Liens. Borrower agrees that, to the extent any
payment or payments are made on any Obligations and such payment or payments, or any part thereof,
are subsequently invalidated, declared to be fraudulent or preferential, set aside or are required
to be repaid to a trustee, receiver, or any other Person under any bankruptcy act, state or federal
law, common law or equitable cause, then to the extent of such payment or payments, the Obligations
or any part thereof intended to be satisfied shall be revived and continued in full force and
effect as if said payment or payments had not been made, and the Liens in favor of Lender
encumbering the Collateral shall continue to secure such revived and reinstated Obligations.

     8. Collateral.

          8.1 Grant of Lien. To secure the payment and performance of the Obligations, for
value received, Borrower unconditionally and irrevocably assigns, pledges and grants to Lender a
continuing first priority Lien against the Inventory Collateral.

          8.2 Insurance of Collateral. Borrower agrees to maintain and pay for, or to the
extent it is within the control of Borrower, to cause the Association or the Condominium
Association to maintain and pay for, insurance upon all Inventory Collateral wherever located
(whether in storage or in transit) covering risks in such amounts and with such insurance companies
as Lender may reasonably require.

          8.3 General and Continuing Lien. All Liens against the Inventory Collateral in favor
of Lender shall be first priority Liens. Borrower and Lender hereby agree that this Agreement
shall be deemed to be a security agreement under the Uniform Commercial Codes of the state of Rhode
Island and the state of South Carolina. Accordingly, in addition to any other rights and remedies
available to Lender hereunder, Lender shall have all the rights of a secured party under the
Uniform Commercial Codes of Rhode Island and the state of South Carolina, all at Lender’s sole

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election. The above-described Liens shall continue in full force and effect until all
Obligations have been fully and finally paid, performed and satisfied.

          8.4 Additional Documents and Future Actions. Borrower agrees, at its sole cost, to
take such actions and provide Lender from time to time with such agreements, financing statements
and additional instruments, documents (including deeds, assignments and mortgages) or information
as Lender may in its discretion deem necessary or advisable to perfect, protect, maintain or
enforce its Lien against the Inventory Collateral, to permit Lender to protect or enforce its
interest in the Inventory Collateral, or to carry out the terms of the Loan Documents. Borrower
hereby authorizes and appoints Lender and any officer of Lender as its attorney-in-fact, with full
power of substitution, to take such actions as Lender may deem advisable (i) to protect the
Inventory Collateral and its interests thereon and its rights hereunder, to file at Borrower’s
expense financing statements, and amendments thereto, in those public offices deemed necessary or
appropriate by Lender to establish, maintain and protect a continuously perfected Lien against the
Inventory Collateral, and (ii) to execute on Borrower’s behalf such other documents and notices as
Lender may deem advisable to protect the Inventory Collateral and its interests therein and its
rights hereunder.

          8.5 Guaranty. As further security for the payment and performance of the Obligations,
Borrower shall cause to be executed and delivered to Lender the Guaranty.

          8.6 Release of Inventory Collateral.

          (a)
Sold Inventory. In connection with the sale by Marketing Agent of Pledged
Inventory, in the event that Borrower pays the required Release Payment for such Pledged Inventory,
then subject to subsection (b) below, Lender shall release such sold Pledged Inventory from
the Lien of Lender’s Mortgage.

          (b) General Provisions. Any obligation of Lender to release any Pledged Inventory
from the Lien of Lender’s Mortgage shall be subject to satisfaction of all of the following
conditions:

               (i) No Event of Default pursuant to Section 17.1 below shall exist and be continuing;

               (ii) The Inventory Loan has not been accelerated so that all Obligations are then due and
payable;

               (iii) All costs and expenses of such release shall be paid by Borrower, including all costs
related to the preparation and recording of release documents and all costs, expenses and
reasonable attorneys’ fees of Lender;

               (iv) The partial release to be executed by or on behalf of Lender shall be in the form
attached hereto as Exhibit G or such other form or amended form as may be acceptable to
Lender;

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               (v) Lender shall have received all documents and information reasonably requested by Lender in
connection with the Pledged Inventory to be released, including without limitation, information
regarding any applicable sales price of such Pledged Inventory; and

               (vi) Lender, Borrower and First American Title Insurance Company shall enter the Escrow
Agreement setting forth the logistical arrangements for the partial release of any Pledged
Inventory, including without limitation, procedures regarding the settlement of the sale of any
Pledged Inventory.

          (c) Total Release. In the event that all Obligations are fully satisfied and Lender
and all affiliates of Lender have no further obligation to make any Advances to Borrower or to any
wholly-owned Affiliate of Borrower, then Lender shall promptly release all of the Pledged Inventory
from the Lien of Lender’s Mortgage.

     9. Conditions Precedent to the Closing. The obligation of Lender to enter into this
Agreement and to fund any Advance hereunder shall be subject to the satisfaction, at Lender’s sole
discretion, of each of the following conditions precedent. To the extent that the conditions
involve the delivery to Lender of any documents or other due diligence items, such documents and
items shall be in form and content acceptable to Lender. Lender, at its sole discretion, may elect
to waive any of these conditions or require that they be satisfied after closing hereunder.

          9.1 Loan Documents. Borrower and Guarantor shall execute and deliver, or cause to be
executed and delivered, as the case may be, to Lender all of the Loan Documents.

          9.2 Opinions of Counsel. Lender shall have received from counsel or counsels
acceptable to Lender, closing opinions in form and substance satisfactory to Lender dated as of the
Closing Date, covering such items as may be required by Lender.

          9.3 Representations, Warranties, Covenants and Agreements. The representations and
warranties contained in the Loan Documents and in any certificates delivered to Lender in
connection with the closing shall be true and correct in all material respects, and all covenants
and agreements to have been complied with and performed by the Material Parties shall have been
fully complied with and performed to the satisfaction of Lender.

          9.4 No Prohibitions. The Material Parties shall not have taken any action or
permitted any condition to exist which would have been prohibited by any provision of this
Agreement or the Loan Documents, or which would constitute an Event of Default or a Default.

          9.5 Reserved.

          9.6 Governing Documents. Lender shall have received and approved copies of the
Governing Documents of each Material Party and any amendments

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thereto, all certified to be true and complete by the Secretary of State of the state of
formation of each Material Party and by an officer, manager, partner or member of each Material
Party.

          9.7 Good Standing Certificates. Lender shall have received and approved current good
standing certificates for each Material Party issued by the Secretary of State of the state of
formation of such entities and, with respect to Borrower, issued by the state in which the Project
is located.

          9.8 Resolutions. Lender shall have received and approved all resolutions and consents
of the partners, directors, shareholders, members, managers, owners and/or other governing Persons
of Borrower and the Material Parties, authorizing the execution of all Loan Documents to which each
is a party and authorizing performance of all obligations thereunder.

          9.9 Reserved.

          9.10 Environmental Report. Prior to the Closing Date, Lender has received and
approved an acceptable environmental report covering the Project and the Borrower Project.

          9.11 Reserved.

          9.12 Title Insurance Policy. Lender shall have received and approved a commitment to
issue a Title Insurance Policy underwritten by the Title Company, in form and content acceptable to
Lender and in an amount at least equal to the principal balance of the Inventory Loan and insuring
that Lender’s Mortgage creates a first priority Lien against the Pledged Inventory, subject only to
the Permitted Exceptions. Such Title Insurance Policy shall contain such affirmative coverage as
Lender deems necessary, including but not limited to, an affirmative statement or endorsement that
the Title Insurance Policy insures Lender against all mechanics’ and materialmen’s liens arising
from or out of construction of any work and shall contain such other endorsements in form and
content acceptable to Lender as Lender may require. If Lender agrees to close based upon a
commitment to issue the Title Insurance Policy or a letter agreement committing the Title Company
to issuing the Title Insurance Policy with an approved pro forma, Borrower agrees to cause the
original Title Insurance Policy to be delivered to Lender as soon as possible after the Closing
Date but not later than thirty (30) days after the Closing Date.

          9.13 Closing Protection Letter. Lender shall have received and approved an executed
closing protection letter issued by the Title Company with respect to any agent or attorney acting
for or on behalf of the Title Company.

          9.14 Evidence of Insurance. Lender shall have received a certificate of insurance
that Borrower has obtained and is maintaining all policies of insurance by and in accordance with
the terms hereof, and that all insurance premiums for such policies have been paid in full, and
that Lender has been named as an additional insured.

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          9.15 Litigation; Litigation Searches. Other than those particular matters described
in Schedule 12.10, no bankruptcy, foreclosure action or other material litigation or
judgments shall be pending, outstanding or threatened against Borrower, Guarantor, the Borrower
Project or any portion of the Inventory Collateral. The term “other material litigation” as used
herein shall not include matters in which (a) a Material Party is plaintiff and no counterclaim is
pending, or (b) Lender determines, in its sole discretion, that such litigation is immaterial due
to settlement, insurance coverage, frivolity, or amount or nature of claim. Lender shall have
received an independent search, at Borrower’s expense, confirming that no such bankruptcy,
foreclosure action or other material litigation or judgment exists with respect to Borrower or
Guarantor.

          9.16 Lien/Other Searches/Releases. Lender shall have received and approved Lien and
other searches against Borrower and Guarantor, as Lender deems advisable, including searches Lender
deems necessary to verify that it has a first and prior perfected Lien covering all of the
Inventory Collateral. Lender shall not be obligated to fund any Advance, at any time, if Lender
determines that it does not have a first priority, perfected Lien covering any portion of the
Inventory Collateral. Lender shall have received such releases, satisfactions and terminations
from all other Persons holding Liens against any of the Inventory Collateral, as Lender may
require.

          9.17 Taxes and Assessments. Lender shall have received and approved evidence that all
Taxes and assessments related to the Inventory Collateral have been paid.

          9.18 Financial Statements. Borrower and Guarantor are newly formed entities that have
not prepared Financial Statements as of the Closing Date.

          9.19 Expenses. Borrower shall have paid (or shall be paying out of the first three
(3) Advances hereunder or as otherwise agreed to by Lender) all Loan Costs and other fees and
expenses required to be paid prior to or at closing pursuant to this Agreement.

          9.20 Exchange Agreements. Lender shall have received and approved executed copies of
all agreements for the Borrower Project with the Exchange Company.

          9.21 Management Agreement. Borrower shall provide Lender with a copy of the executed
Management Agreement (including any sub-management agreement), together with evidence that the
Management Agreement has not been assigned to any Person and that no Person has a Lien against any
interest in the Management Agreement other than Lender.

          9.22 Closing Checklist. All of the conditions precedent and all of the documents, as
reflected on Lender’s closing checklist delivered in connection with this Agreement, shall have
been satisfied (or waived by Lender, as applicable) or delivered to Lender in form and content
satisfactory to Lender.

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          9.23 Material Project Agreements. Lender shall have received and approved executed
copies of all Material Project Agreements as listed and described on Schedule 13.10.

          9.24 Licenses; Legal Requirements. Lender shall have received and approved evidence
that: (a) the Borrower Project has been approved by the Division as a timeshare project under the
Timeshare Act; (b) a current Public Offering Statement for the Borrower Project has been approved
issued by the Division; and (c) the Material Parties have all licenses to enter into and perform
their obligations under the Loan Documents and the Material Project Agreements.

          9.25 Due Diligence Inspections and Investigations. Lender shall have conducted a due
diligence inspection of the Borrower Project and a due diligence investigation of each Material
Party and the results of each inspection and investigation shall be acceptable to Lender.

          9.26 Miscellaneous. All actions taken in connection with the execution or delivery of
the Loan Documents and all documents and papers related thereto shall be satisfactory to Lender and
its counsel. Lender shall have received and approved such other insurance, agreements, documents,
instruments, certificates, opinions or other items as Lender shall reasonably require.

     By completing the closing hereunder, or by making Advances hereunder, Lender does not thereby
waive a breach of any warranty or representation made by Borrower or Guarantor hereunder or any
agreement, document, or instrument delivered to Lender or otherwise referred to herein, and any
claims and rights of Lender resulting from any breach or misrepresentation by Borrower or Guarantor
are specifically reserved by Lender.

     10. General Conditions Precedent to All Advances.

          10.1 Inventory Loan Advances. The obligation of Lender to make each Advance under the
Inventory Loan shall be subject to the satisfaction, at Lender’s sole discretion, of all of the
following conditions precedent. To the extent that the conditions involve the delivery to Lender
of any documents or other items, such documents and items shall be in form and content acceptable
to Lender. Lender, at its sole discretion, may elect to waive any of these conditions.

          (a) Requests for Inventory Loan Advances. Not less than three (3) Business Days prior
to the date of any Advance under the Inventory Loan, Lender shall have received and approved a duly
completed and executed Request for Inventory Loan Advance in the form attached hereto as
Exhibit C together with attachments, schedules and supporting materials as specified in
such form, and all representations and warranties set forth therein shall be accurate.

          (b) Reserved.

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          (c) Date of Advance. The date on which such requested Advance is to be made shall be
a Business Day.

          (d) Representations and Warranties. The representations and warranties contained
herein, in the Loan Documents and in any certificates delivered to Lender in connection with the
Inventory shall be true and correct in all material respects as of the date of the requested
Advance.

          (e) Compliance. The Borrower Project, the Inventory Collateral and each Material
Party shall be in compliance with all applicable Legal Requirements.

          (f) Fees and Loan Costs. Borrower shall have paid (or shall be paying out of the
requested Advance) all fees and Loan Costs then due and payable and required to be paid by Borrower
pursuant to this Agreement.

          (g) Litigation. There shall be no bankruptcy, foreclosure action or other material
litigation or judgments pending or outstanding against or affecting the Borrower Project or any
portion of the Inventory Collateral.

          (h) Other Documents. Lender shall have received and approved such other agreements,
documents, instruments, certificates and materials as Lender may request to evidence the
Obligations; to evidence and perfect the rights and Liens of Lender contemplated by the Loan
Documents, and to effectuate the transactions contemplated herein.

          (i) Other. All actions taken in connection with such requested Advance and all
documents and papers relating thereto shall be satisfactory to Lender and its counsel. Lender and
its counsel shall have received copies of such documents and papers as Lender or such counsel may
request in connection with such requested Advance, all in form and substance satisfactory to Lender
and its counsel.

          (j) No Obligation to Fund After Filed Liens. Lender shall have no obligation to
advance any monies at any time when there is a claim of Lien filed of record against any of the
Inventory Collateral which has not been paid, transferred to other security or otherwise
satisfactorily discharged, bonded over or contested. Lender’s commitment to make Advances
hereunder shall at no time be subject to or liable to attachment or levy by any creditor of
Borrower or any third party. No such Persons are intended to be third party beneficiaries of this
Agreement or any documents or instrument related to the Inventory Loan or to have any claim or
claims in or to any undisbursed or retained Inventory Loan proceeds.

          (k) Advances Do Not Constitute a Waiver. No Advance shall constitute a waiver of any
condition of Lender’s obligation to make further Advances.

          (l) General Restrictions. Notwithstanding anything herein or elsewhere to the
contrary, Borrower shall not be entitled to and Lender shall have no obligation to make any Advance
which would result in a violation of Section 3.2 or any other restriction set forth in this
Agreement.

26

 

          (m) Advances to Pay Loan Costs. Notwithstanding anything herein or elsewhere to the
contrary, Lender, may make Advances to itself to pay fees due from Borrower under the Loan
Documents, to pay Loan Costs, to pay indemnification obligations of Borrower and Guarantor under
the Loan Documents or to otherwise satisfy any other performance or payment obligations of Borrower
under the Loan Documents, without any further authorization by Borrower and without requiring any
of the items set forth in this Section 10.1. Lender will notify Borrower of such Loan
Costs unless and until an Event of Default occurs and is continuing in which case Lender shall not
provide notice to Borrower of such Loan Costs.

     11. Funding Procedures. The funding of Advances shall be in accordance with such
additional procedures as Lender may reasonably require. In connection with any wire transfers,
Borrower agrees to pay Lender’s external costs and expenses for such wire transfers.

     12. General Representations, Warranties and Covenants. As an inducement to Lender to
advance funds to Borrower, Borrower and Guarantor hereby represent and warrant to Lender and
covenant with Lender as follows:

          12.1 Organization; Power; Authorization.

          (a) Each Material Party (i) is duly formed and organized, validly existing and in good
standing under the laws of the state of its formation, duly licensed, qualified or registered and
in good standing under the laws of each other jurisdiction in which the character or location of
its assets or the business transacted by it requires such licensing, qualification or registration;
and (ii) has full power and lawful authority and has been duly authorized by all requisite actions
by its owners, officers, partners, directors or other governing Persons, as applicable, to own such
assets, to transact such business (as now being conducted or as proposed to be conducted) and to
enter into and perform its obligations under all Loan Documents and Material Project Agreements to
which it is a party and without violation of any Governing Documents of such Material Party.

          (b) Borrower shall maintain, and shall cause each Material Party to maintain, its existence,
good standing and due licensing, qualification and registration in the state of its current
organization and in each other jurisdiction in which the character or location of its assets or the
business transacted by it requires such licensing, qualification or registration.

          (c) Except as provided in Section 12.2(b), Borrower and Guarantor shall not dissolve
or consolidate or merge with or into any other Person or agree to have any other Person merge with
or into Borrower and/or Guarantor.

          (d) The Loan Documents constitute legal, valid and binding obligations of Borrower,
enforceable against Borrower in accordance with the respective terms.

27

 

          12.2 Affiliates and Capital Structure.

          (a) Schedule 12.2 sets forth: (i) all Affiliates of Borrower and Guarantor involved in
the operation or management of the Borrower Project or the purchase of Timeshare Interests, (ii)
the ownership of all interests in Borrower and Guarantor.

          (b) Borrower shall not permit the issuance, dilution, transfer, pledge, hypothecation,
assignment or encumbrance of any ownership interest in Borrower or Guarantor without the prior
written consent of Lender unless it is to DRC or a DRC Affiliate in which case no prior written
consent of Lender shall be required. Lender acknowledges that TAC’s ownership interest in
Guarantor has been collaterally assigned by TAC to Guggenheim Corporate Funding, LLC as
administrative agent for a group of Lenders (“Guggenheim”). If Guggenheim exercises its
rights under the Collateral Assignment of TAC’s ownership interest such that Guggenheim or an
affiliate thereof becomes the owner of TAC (which in turn owns Guarantor), an Event of Default
shall exist hereunder unless at such time Lender consents to Guggenheim or an affiliate as the
owner of TAC, which consent shall not be unreasonably withheld. In connection with any request for
approval by Lender of any change in ownership interests, Borrower shall provide Lender with such
information as Lender may reasonably require in order to comply with all Legal Requirements.
Borrower shall not permit any transfer of voting authority, rights or discretion with respect to
Borrower or Guarantor, except to DRC or a DRC Affiliate.

          12.3 Names and Addresses.

          (a) Schedule 12.3 sets forth all names currently used by Borrower, together with all
business addresses currently used by Borrower, at which any of the Inventory Collateral is located
or at which any books and records of Borrower are located.

          (b) Borrower shall not change its name or change any location at which it does business, at
which any of the Inventory Collateral is located or where any of its books and records are located
without at least forty five (45) days’ prior written notice to Lender and delivery to Lender of
such access agreements as Lender may require to maintain Lender’s ability to obtain access to the
Inventory Collateral and to Borrower’s books and records.

          12.4 Licenses.

          (a) Each Material Party has all Licenses necessary to own its assets, to conduct its business,
as now being conducted or as proposed to be conducted and to enter into and perform its obligations
under all Loan Documents and Material Project Agreements to which it is a party. All of such
Licenses are presently in full force and effect with no action or proceeding pending or threatened
which challenges or seeks to revoke, terminate or modify any such License.

28

 

          (b) Borrower shall maintain and shall cause each Material Party to maintain and keep in full
force and effect all of such Licenses described in subsection (a) above.

          12.5 Compliance with Legal Requirements.

          (a) The execution, delivery and performance by Borrower and Guarantor of the Loan Documents
and the Material Project Agreements to which it is a party do not violate any applicable Legal
Requirements.

          (b) Borrower shall comply with and shall cause the Borrower Project to comply with all
applicable Legal Requirements.

          (c) Borrower shall not consent to or otherwise agree to any change in any zoning law or other
land use law or rule which would adversely limit or alter the use of the Borrower Project.

          12.6 Other Restrictions.

          (a) No Material Party has entered into or is bound by any contract, agreement or restriction,
which (i) could reasonably be expected to have a Material; Adverse Effect with respect to the
Inventory Collateral, (ii) prohibits or restricts entering into or performing its obligations under
the Loan Documents or the Material Project Agreements to which it is a party, (iii) as to Borrower,
restricts or in any way limits Borrower’s rights to incur indebtedness, or (iv) could result (upon
the happening of a contingency or otherwise) in any of the Inventory Collateral being subject to a
Lien, other than Liens in favor of Lender.

          (b) Borrower shall not enter into and shall not permit or authorize any Material Party to
enter into any contract, agreement or restriction described in subsection (a) above and
relating to the Inventory Collateral.

          12.7 Inventory Collateral.

          (a) Borrower has good and marketable title to all of the Inventory Collateral subject only to
Permitted Exceptions described on Schedule 12.7.

          (b) Borrower shall maintain good and marketable title to the Inventory Collateral subject to
Permitted Exceptions and shall defend such title against all claims of other Persons except Lender.

          (c) Borrower shall not transfer, sell, assign, or enter into any options to purchase,
installment sales contracts or contracts for deed with respect to all or any portion of the
Inventory Collateral except to DRC or a DRC Affiliate, subject to Lender’s Mortgage and Liens.
Borrower shall not take any action (or permit or consent to the taking of any action) which might
impair the value of the Inventory Collateral or any of the rights of Lender in the Inventory
Collateral.

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          12.8 Liens.

          (a) The execution, delivery and performance by Borrower of the Loan Documents does not result
in or create any Lien upon any assets of Borrower, except Liens in favor of Lender. There are no
Liens encumbering any portion of the Inventory Collateral, except Liens in favor of Lender. There
are no Liens encumbering any portion of the Borrower Project or any other assets of Borrower in
favor of any Person (other than Lender). The execution and delivery of the Loan Documents, the
filing of a financing statement in proper form with the Secretary of State of the state of
formation of Borrower naming Lender as secured party and Borrower as debtor and describing the
Inventory Collateral, and the recording of the Lender’s Mortgage in the Public Records, shall
create in favor of Lender, a valid, perfected and continuing first priority Lien in the Inventory
Collateral.

          (b) Borrower shall take all actions required by Lender in order to maintain Lender’s first
priority Lien in the Inventory Collateral.

          (c) Borrower shall not grant or permit any Lien to exist with respect to the Inventory
Collateral, except Lender’s first priority Lien and the Permitted Exceptions. Borrower shall not
grant or permit to exist any Lien with respect to the Management Agreement, Timeshare Declaration,
any portion of the Borrower Project or any other Inventory Collateral in favor of any Person (other
than Lender), except for the Collateral Assignments.

          12.9 Taxes.

     With respect to the Borrower Project:

          (a) Each Material Party has paid in full all Taxes payable by such Material Party and Borrower
knows of no basis for any additional Taxes to be assessed against or to be payable by such Material
Party or any tax audit pending or threatened against any Material Party. Each Material Party has
filed all returns for Taxes required to have been filed by such Material Party.

          (b) Borrower shall file and shall cause each Material Party to file all tax returns required
to be filed by Borrower and each Material Party on a timely basis and Borrower shall pay and shall
cause each Material Party to pay when due all Taxes payable by Borrower and such Material Party.

          12.10 Litigation Proceedings. Except as described on Schedule 12.10, there
are no material actions, suits, proceedings, orders or injunctions pending or to the best of
Borrower’s knowledge threatened against or affecting Borrower or Guarantor, the Borrower Project or
the Inventory Collateral at law or in equity, or before or by any governmental authority or other
tribunal. Borrower has not received and has no knowledge of any written notice from any court,
governmental authority or other tribunal alleging that Borrower, Guarantor or the Borrower Project
has violated any applicable Legal Requirements. Borrower shall provide to Lender prompt written
notice of any action commenced against any Material Party to the extent Borrower reasonably

30

 

believes such action could give rise to a Material Adverse Effect or material breach of any of
the provisions of this Agreement.

          12.11 Pension Plans. Borrower has no unfunded obligations with respect to any
employee pension benefit plan (“Pension Plan”) (as such term is defined in the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”)). No events, including,
without limitation, any “Reportable Event” or “Prohibited Transaction” (as those terms are defined
under ERISA), have occurred in connection with any such Plan which might constitute grounds for the
termination of any such Pension Plan by the Pension Benefit Guaranty Corporation (“PBGC”)
or for the appointment of any United States District Court of a trustee to administer any such
Pension Plan. All such Pension Plans meet with the minimum funding standards of Section 302 of
ERISA

     The present value of the aggregate benefit liabilities under any of the Pension Plans,
determined as of the end of such Pension Plan’s most recently ended plan year on the basis of the
actuarial assumptions specified for funding purposes in such Pension Plan’s most recent actuarial
valuation report, did not exceed the aggregate current value of the assets of such Pension Plan
allocable to such benefit liabilities. The term “benefits liabilities” has the meaning specified
in Section 4001 of ERISA and the terms “current value” and “present value” have the meanings
specified in Section 3 of ERISA. No Material Party nor any ERISA Affiliates have incurred
withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under Section
4201 or 4204 of ERISA. The term “ERISA Affiliates” means any trade or business (whether or
not incorporated) that is treated as a single employer together with any Material Party under
Section 414 of the Internal Revenue Code of 1986, as amended.

          12.12 Financial Statements and Financial Condition. Taken as a whole, all Financial
Statements and other information of the financial condition of Borrower and Guarantor given to
Lender (i) is complete and correct and does not omit to state any material fact necessary in order
to make the statements herein or therein not misleading, and (ii) accurately presents the financial
condition of Borrower and Guarantor as of the date on which the same have been furnished to Lender.
To the extent required by GAAP, all balance sheets disclose all known liabilities, direct and
contingent, as of their respective dates. No Material Adverse Effect has occurred since the date
of the most recent of each such financial statement given to Lender other than changes in the
ordinary course of business, none of which changes have had or could reasonably be expected to have
a Material Adverse Effect.

          12.13 Solvency. Borrower and Guarantor are currently solvent. No transfer of
property is being made by Borrower or Guarantor and no obligation is being incurred by Borrower or
Guarantor in connection with the transactions contemplated by this Agreement or the other Loan
Documents with the intent to hinder, delay, or defraud either present or future creditors of
Borrower or Guarantor. Borrower is able to pay all of its debts as they become due. Borrower’s
obligations under this Agreement and under the Loan Documents shall not render Borrower unable to
pay its debts as they become due. The present fair market value of Borrower’s assets is greater
than the amount required to pay its total liabilities.

31

 

          12.14 Reserved.

          12.15 Investment Company. Borrower is not an “investment company” as defined in the
Investment Company Act of 1940, as amended, and Borrower is not required to register under such
Act.

          12.16 Enforceability. The Loan Documents constitute legal, valid and binding
obligations of each Material Party who is a party thereto, enforceable in accordance with their
terms.

          12.17 No Defaults.

          (a) No Default or Event of Default with respect to the Loan Documents currently exists. No
Material Party is in default in any material respect under any of its Governing Documents, under
any obligation for borrowed money or under any other agreement which may materially and adversely
affect such Material Party or its ability to perform its obligations under the Loan Documents.

          (b) Each Material Party shall perform its obligations under the Loan Documents to which it is
a party and shall take all actions necessary (which are not prohibited by law) to prevent the
occurrence of an Event of Default.

          12.18 Use of Proceeds/Margin Stock. None of the proceeds of the Inventory Loan shall
be used to purchase or carry any “margin stock” (as defined under Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from time to time), and no portion of the
proceeds of the Inventory Loan shall be extended to others for the purpose of purchasing or
carrying margin stock. None of the transactions contemplated in this Agreement (including, without
limitation, the use of the proceeds from the Inventory Loan) will violate or result in the
violation of Section 7 of the Securities Exchange Act of 1934, as amended, or any regulations
issued pursuant thereto, including, without limitation, Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R., Chapter 11.

          12.19 Labor Relations. The employees of Borrower are not a party to any collective
bargaining agreement with Borrower, and, to the best of Borrower’s knowledge, there are no material
grievances, disputes or controversies with any union or any other organization of Borrower’s
employees, or threats of strikes, work stoppages or any asserted pending demands for collective
bargaining by any union or organization.

          12.20 Broker’s Fees.

          (a) Lender and Borrower represent to each other that neither of them has made any commitment
or taken any action which will result in a claim for any brokers, finder’s or other similar fees
with respect to the transactions described in this Agreement.

32

 

          (b) Borrower agrees to pay all of such fees payable to any broker or finder hired by Borrower
and agrees to indemnify and hold Lender harmless from any claims by such finders or brokers or by
any other Person claiming such fees as a result of any commitment or action of Borrower.

          12.21 Inspections. Borrower shall, at any time and from time to time and at the
reasonable expense of Borrower and with reasonable notice from Lender, permit Lender or its agents
or representatives to inspect the Borrower Project, the Inventory Collateral and Borrower’s assets
or property, and to audit, examine and make copies of and abstracts from its and, to the extent it
has access thereto or possession thereof, the Association’s, books, accounts, records, original
correspondence, computer tapes, disks, software, and other papers as it may desire; and to discuss
its affairs, finances and accounts with any of its officers, employees, Affiliates or independent
public accountants (and by this provision Borrower authorizes said accountants to discuss with
Lender, its agents or representatives, the affairs, finances and accounts of Borrower). All audits
and inspections (including without limitation, those occurring before and after the Closing Date)
shall be at Borrower’s reasonable expense, including all reasonable travel expenses of Lender’s
employees; provided, however, that unless an Event of Default has occurred, only one audit or
inspection per calendar year shall be at the expense of Borrower. Borrower shall have the right to
provide Lender’s employees with accommodations at properties owned by Borrower or its Affiliates,
that are within reasonably close proximity to the site of such audits or inspections, as a means to
reduce travel expenses incurred in conducting such audits or inspections.

          12.22 Reserved.

          12.23 Books and Records. Borrower shall keep, and shall cause the Association to
keep, accurate and complete records and books of account reflecting all financial transactions of
Borrower and the Association, as applicable, in which complete entries will be made in accordance
with GAAP. Borrower shall maintain to the satisfaction of Lender, and shall deliver promptly to
Lender upon Lender’s request, accurate and complete books, records and files relating to the
Borrower Project, the Inventory Collateral, and the sales of Timeshare Interests and all payments
of Release Payments.

          12.24 Reserved.

          12.25 No Payment of Dividends. Unless specifically agreed to in writing by Lender,
Borrower may not pay any dividends, fees, expenses or other sums or any distribution in cash or
assets or any loans, salary advances or other payments to; (i) any member of Borrower or Guarantor;
(ii) DRC or any of the DRC Affiliates or shareholders, partners, members or employees thereof; or
(iii) any corporation, partnership or other Person directly or indirectly owned in whole or in part
by any member, officer or director of Borrower or any Affiliate of any of the foregoing.
Notwithstanding the foregoing, Borrower shall have the right to make the following payments without
the consent of Lender: (A) compensation and bonuses (consistent with industry norms) paid to
directors, management and employees of Borrower in the

33

 

ordinary course of business, or (B) loans and advances to employees in the ordinary course of
business not to exceed $50,000 in the aggregate at any time outstanding and (c) payments to DRC or
to any of the DRC Affiliates pursuant to the provisions of the Transfer Pricing Agreement,
Management Agreement and Servicing Agreement.

          12.26 Management. Borrower shall cause the Borrower Project to be managed at all
times by Manager or a DRC Affiliate which has substantial experience, background and demonstrated
ability to perform, in accordance with a management agreement reasonably satisfactory to Lender,
and who are in all other respects reasonably satisfactory to Lender.

          12.27 Full Disclosure. No information, exhibit or written report or the content of
any schedule furnished by or on behalf of any Material Party to Lender in connection with the
Inventory Loan, the Inventory Collateral or the Borrower Project, and no representation or
statement made by any Material Party in any Loan Document contains or shall contain any material
misstatement of fact or omits or shall omit the statement of a material fact necessary to make the
statement contained herein or therein not misleading. Borrower does not know of any fact or
condition which will prevent the sale of Timeshare Interests to Purchasers or prevent the operation
of the Borrower Project in accordance with the Declarations and the Public Offering Statement, and
in accordance with all applicable Legal Requirements, or prevent Borrower’s performance of its
Obligations.

          12.28 Reserved.

          12.29 One-to-One Ratio. Borrower shall maintain at least a one-to-one ratio (the
“One-to-One Ratio”) with respect to each Unit such that the total aggregate number of
Timeshare Interests sold to consumers in the form of the right to occupy a given Unit for the
equivalent of one (l) week per calendar year is at all times less than or equal to the total number
of Units in the Borrower Project multiplied by fifty-two (52).

          12.30 Change of Control. For so long as Borrower’s obligated to Lender under the Loan
Documents , there shall be no Change of Control.

     13. Representations, Warranties and Covenants With Respect to the Borrower Project.
As an inducement to Lender to advance funds to Borrower, Borrower represents and warrants to and
covenants with Lender as follows:

          13.1 Declarations. To the best of Borrower’s knowledge, the Borrower Project has been
established and dedicated and is and will remain, a timeshare project and plan in material
compliance with Legal Requirements, including, without limitation, timeshare registration laws.
All Inventory Collateral will continue to be duly submitted to the provisions of the Timeshare
Declaration. Borrower will not vote to amend, supplement, terminate or restate the Timeshare
Declaration without the prior written consent of Lender. Borrower shall not consent to any
amendments, supplements or restatements of the Condominium Declaration without the prior written
consent of Lender. Borrower shall not assign its rights as “developer” under the Timeshare

34

 

Declaration or file or permit to be filed any additional covenants, restrictions, declarations
or easements with respect to Borrower Project, without Lender’s prior consent.

          13.2 Access. To the best of Borrower’s knowledge, the Borrower Project has adequate
access from a publicly dedicated street and roadways inside the Project are subject to a recorded
access and use easements or other dedication for the benefit of Owners of Timeshare Interests.

          13.3 Utilities. The Inventory Collateral is served by adequate utilities. To the
best of Borrower’s knowledge, easements necessary for furnishing such utilities have been duly
obtained, have been recorded in the Public Records and inure to the benefit of the Inventory
Collateral and the Owners. Borrower shall use reasonable commercial efforts to cause the
Condominium Association to make the necessary utilities available to the Inventory Collateral in
sufficient capacity to service the Inventory Collateral.

          13.4 Parking. To the best of Borrower’s knowledge, the Borrower Project currently has
sufficient on-site parking to satisfy applicable Legal Requirements.

          13.5 Legal Requirements; Zoning; Private Restrictions. To the best of Borrower’s
knowledge, the use and occupancy of the Units which make up the Inventory Collateral for the
respective intended purposes are lawful under applicable Legal Requirements. To the best of
Borrower’s knowledge, the Project is zoned “T A-80”, under which timeshare is an allowed use.
Borrower shall comply, and shall cause the Borrower Project to comply, with applicable private
covenants and restrictions. Without the prior written consent of Lender, Borrower shall not
consent to, or otherwise acquiesce in, any change in any private restrictive covenant, planning or
zoning law or other public or private restriction, which would limit or alter the use of the
Inventory Collateral.

          13.6 Units Ready for Use. To the best of Borrower’s knowledge, all of the Units
constituting the Inventory Collateral are fully furnished and ready for use by Purchasers. To the
best of Borrower’s knowledge, all common furnishings (including appliances) within such Units are
and shall be owned by either Borrower or the Association, have been or shall be fully paid for, and
are and shall be free and clear of any Liens or other interests of any third party or are subject
to leases which are not in default as of the Closing Date, and the terms of which Borrower shall
continue to comply with after the Closing Date.

          13.7 No Defaults. No Default or Event of Default exists and there is no violation in
any material respect of any term of any agreement, charter, instrument, operating agreement or
other instrument to which Borrower is a party or by which Borrower may be bound.

          13.8 Tangible Property. The machinery, equipment, fixtures, tools and supplies used
or to be used in connection with the Inventory Collateral, including without

35

 

limitation, with respect to the operation and maintenance of the Common Area, are and shall be
owned or leased either by Borrower, the Association, the Manager or its subcontractor. The leases
described in Schedule 13.8 comprise all leases of tangible personal property that Borrower
has entered into in connection with the ownership, operation or maintenance of the Inventory
Collateral and Borrower is unaware of any additional leases that are needed in order to adequately
own, operate and maintain the Inventory Collateral.

          13.9 Condition of the Borrower Project. Borrower shall maintain or shall cause the
Association or use commercially reasonable efforts to cause the Condominium Association to
maintain, the Borrower Project in good repair, working order and condition and shall make, or cause
the Association or use commercially reasonable efforts to cause the Condominium Association to make
necessary replacements and improvements so that the Inventory Collateral remains in compliance in
all material respects with the Timeshare Act, the Material Project Agreements and applicable Legal
Requirements.

          13.10 Material Project Agreements. To the best of Borrower’s knowledge, the
contracts, agreements and arrangements listed and described on Schedule 13.10 comprise all
of the Material Project Agreements currently existing. True and complete copies of the Material
Project Agreements have been delivered to Lender. Except as described on Schedule 13.10,
none of such Material Project Agreements have been amended, modified or terminated. All of such
Material Project Agreements are and shall (unless Lender shall otherwise consent in advance in
writing) remain in full force and effect, unmodified and free and clear of any Lien, except any
Lien in favor of Lender. All of such Material Project Agreements constitute the legal, valid and
binding obligations of each party thereto, enforceable in accordance with their terms. To the best
of Borrower’s knowledge, no party is in default under any Material Party Agreements. Borrower
shall comply with, and shall cause each Material Party to comply with, all Material Project
Agreements. Subject to the rights of the Association or the Condominium Association, Lender shall
have the right to review and approve all future Material Project Agreements for the Borrower
Project and all amendments thereto, all of which shall be acceptable to Lender in its reasonable
discretion.

          13.11 Reserved.

          13.12 Certificates of Occupancy. To the best of Borrower’s knowledge, a certificate
of occupancy has been issued for each Unit in the Borrower Project and remains in full force and
effect.

          13.13 Reserved.

          13.14 Tests, Etc. If requested by Lender, Borrower shall furnish to Lender the
following, to the extent that Borrower has possession of the same or the reasonable ability to
obtain the same, all certificates, plans and specifications, appraisals, title insurance and other
insurance, reports and agreements related to the Inventory Collateral.

36

 

          13.15 Taxes. To the best of Borrower’s knowledge, all Taxes, condominium and similar
maintenance fees, rents, assessments and like charges affecting the Inventory Collateral and
currently due and payable have been fully paid to date. The Association or the Condominium
Association bills each Owner of a Timeshare Interest in such Unit for the Owner’s pro-rata share of
such real estate taxes. Borrower shall pay, or shall cause the Association or shall use
commercially reasonable efforts to cause the Condominium Association to pay, all real estate Taxes
related to the Inventory Collateral.

          13.16 Amenities. To the best of Borrower’s knowledge, the Amenities have been
completed and are available for use by the Owners of Timeshare Interests. Borrower shall take no
action to amend, modify or terminate the Declarations with respect to the Amenities without the
prior written consent of Lender. Borrower shall have in place and in full force and effect at all
times agreements which provide that the Amenities shall be available now and in the future for use
by Owners in good standing consistent with the terms, conditions and limitations set forth in the
Declarations.

     Borrower shall use commercially reasonable efforts to cause the Condominium Association to
maintain the Amenities in good condition and repair, and in accordance with the provisions of the
applicable Material Project Agreements, and Borrower shall cause each Owner of a Timeshare Interest
at the Borrower Project to have continuing access to, and the use of to the extent of such Owner’s
use periods, all of the Common Area, Amenities and related or appurtenant services, rights and
benefits, all as provided in the Declarations and the Material Project Agreements. Borrower shall
not enter into, amend, modify or terminate any of the Amenities Agreements or any documents
collateral thereto, or assign any of its rights thereunder, without Lender’s prior consent.

          13.17 Developer Subsidy. There is no obligation on the part of the Borrower to
subsidize any budget deficits of the Association or Condominium Association.

          13.18 Reservation System. The computer network, hardware and software which enables
an Owner to reserve a use period at the Borrower Project in accordance with the provisions of the
Public Offering Statements and the Material Project Agreements are and shall at all times (a) be
owned by, licensed or otherwise contracted for Borrower or the Association, (b) be fully functional
and operational for its intended purpose, and (c) be operated to assure the Owners the use rights
provided under the Public Offering Statement and Material Project Agreements and (d) be free and
clear of all Liens other than Lender’s Lien and those relating to the leasing of equipment or
software or licensing of software. Borrower Project will at all times maintain a reservation
system. Upon the occurrence and continuance of an Event of Default, Borrower will provide Lender
with all future reservation information in a machine readable (ASCII, CSV, EXCEL) format. The
reservation system shall be owned by, licensed or otherwise contracted by Borrower or an Affiliate.

          13.19 Reserved.

37

 

          13.20 Leases. Except as set forth on Schedule 13.20, without the prior
written consent of Lender, Borrower shall not enter into any lease, license or other occupancy
agreement for all or any part of the Inventory Collateral. Notwithstanding the foregoing, Borrower
may enter into short term leases, but in no event for a period in excess of fourteen (14) days, for
transient and prepaid rentals of Units.

          13.21 Transactions with Affiliates. Without the prior written consent of Lender,
Borrower shall not enter into any transaction with any Affiliate in connection with the Inventory
Collateral, including, without limitation, relating to the purchase, sale or exchange any assets or
properties or the rendering of any service, except with the DRC Affiliates in accordance with the
Transfer Pricing Agreement, Management Agreement and Servicing Agreement, together with such other
agreements as shall be approved by Lender prior to execution or modification thereof.

          13.22 Reserved.

          13.23 Maintenance of Insurance. Borrower shall use commercially reasonable efforts to
cause each of the Association and the Condominium Association, as required, to maintain, at all
times during the term of this Inventory Loan, policies of insurance with premiums therefor being
paid when due, and shall deliver to Lender certificates of insurance issued by insurance companies,
in amounts, in form and in substance, and with expiration dates, all acceptable to Lender and
containing waivers of subrogation rights by the insuring company, additional insured endorsements
in favor of and satisfactory to Lender and breach of warranty coverage, providing the following
types of insurance on and with respect to Borrower (or, as appropriate, the Association and
Condominium Association) and the Inventory Collateral:

               (a) As to all Improvements that are completed as of the date hereof, “All Risk Special Form”
insurance coverage (including fire, lightning, hurricane, tornado, wind and water damage,
earthquake, vandalism and malicious mischief coverage) covering all real and personal property
which comprise the Inventory Collateral, in an amount not less than the full replacement value of
such Improvements and personal property, and said policy of insurance shall provide for a
deductible acceptable to Lender, breach of warranty coverage, replacement cost endorsements
satisfactory to Lender, and shall not permit co-insurance;

               (b) General liability and property damage insurance covering the Inventory Collateral in
amounts and on terms satisfactory to Lender;

               (c) Such other insurance on the Inventory Collateral or any replacements or substitutions
therefor, including, without limitation, rent loss, business interruption, flood insurance in such
amounts and upon such terms as may from time to time be reasonably required by Lender; and

          Lender shall expressly be named an additional insured in each insurance policy described in
this Section 13.23. To the extent any “institutional mortgagee,” “institutional lender” or
“mortgagee” (as defined or used in the Declarations) other than

38

 

Lender has any rights to approve the form of insurance policies with respect to the Inventory
Collateral, the amounts of coverage thereunder, the insurers under such policies or the designation
of an attorney-in-fact for purposes of dealing with damage to any part of the Inventory Collateral,
or insurance claims or matters related thereto or any successor to such attorney-in-fact or any
changes with respect to any of the foregoing, Borrower shall take all steps as may be necessary to
ensure that Lender shall at all times have a co-equal right with such other “preferred mortgagee,”
“institutional lender” or other “mortgagee” (including, without limitation, Borrower or any
third-party lender), to approve all such matters and any proposed changes in respect thereof; and
Borrower shall not cause and shall use commercially reasonable efforts to prohibit any changes with
respect to any insurance policies, insurers, coverage, attorney-in-fact or insurance trustee, if
any, without Lender’s prior written approval.

          In the event of any insured loss or claim in respect of all or any portion of the Inventory
Collateral, Borrower shall use commercially reasonable efforts to cause the Association or the
Condominium Association, as appropriate, to apply all proceeds of such insurance policies in a
manner consistent with the Declarations, the Condominium Act, the Timeshare Act and all other
applicable statutes, ordinances, rules and regulations.

          All insurance policies required pursuant to this Agreement (or the Declarations or the
Condominium Act or Timeshare Act) shall provide that the coverage afforded thereby shall not expire
or be amended, canceled, modified or terminated without at least thirty (30) days prior written
notice to Lender and contain a provision affirming Lender’s rights and benefits thereunder despite
any violation of the applicable policy terms by Borrower or any other Person. Borrower shall make
a good faith inquiry on a regular basis to the Association to determine if the required insurance
premiums covering the Inventory Collateral have been paid. If Borrower determines upon such
inquiry or otherwise that the required insurance premiums have not been paid, Borrower shall
immediately notify Lender of such failure to timely pay the required insurance premium and Borrower
shall have thirty (30) days from receipt of a written request from Lender to cause the required
insurance premiums to be paid. If the required insurance premiums are not paid within such thirty
(30) day period, Lender may, in its sole discretion, without any obligation to do so, choose to pay
such required insurance premiums on behalf of Borrower or the applicable Association, in which case
Borrower shall pay Lender interest at the Default Rate for any amounts so advanced. Lender may
also, in its sole discretion, in the event the required insurance premiums are not paid when due,
establish an insurance escrow account from which Lender may make insurance payments on behalf of
Borrower or the Association or Condominium Association when insurance premiums shall become due.
If the required insurance premiums are not paid as required and Lender elects not to pay such
insurance premiums or establish an escrow account for payment thereof, such failure shall
constitute an Event of Default hereunder.

          In the event of any fire or other casualty to or with respect to all or any portion of the
Inventory Collateral, Borrower covenants that it shall use commercially reasonable efforts to cause
the Association or Condominium Association to promptly

39

 

restore, repair or replace the damaged portion(s) of the Inventory Collateral and repair or
replace any other personal property to the same condition as immediately prior to such fire or
other casualty and, with respect to the real and personal property comprising the Inventory
Collateral, in accordance with the terms of the Declarations, the Condominium Act, the Timeshare
Act and all other applicable statutes, ordinances, rules and regulations. The insufficiency of any
net insurance proceeds shall in no way relieve Borrower or each Association of their respective
obligations as set forth herein. Borrower covenants that it shall use commercially reasonable
efforts to cause the Association or Condominium Association to comply promptly and cause compliance
with the provisions of the Declarations, Condominium Act and of the Timeshare Act and all other
applicable statutes, ordinances, rules and regulations relating to such restoration, repair or
replacement. In Lender’s sole discretion, all insurance proceeds payable to or received by Lender
pursuant to the Declarations or the applicable insurance policies may be applied to the payment of
the Obligations, whether or not due and in whatever order Lender elects, consistent with the terms
of the applicable insurance policy and the Declarations.

     Borrower shall in good faith cooperate with Lender in obtaining for Lender the benefits of any
insurance or other proceeds lawfully or equitably payable to Borrower or Lender in connection with
the transactions contemplated hereby and in paying any Obligation (including the payment by
Borrower of the expense of an independent appraisal on behalf of Lender in case of a fire or other
casualty affecting the Inventory Collateral). Notwithstanding anything to the contrary set forth
in this Section 13.23, the types and amounts (including deductible) of insurance coverage
reflected on the insurance certificates delivered by Borrower to Lender on the Closing Date are
satisfactory to Lender.

     14. Timeshare Representations, Warranties and Covenants. As an inducement to Lender
to advance funds to Borrower, Borrower and Guarantor hereby represent and warrant to Lender and
covenant with Lender as follows:

          14.1 Licenses. Borrower has and shall at all times maintain all Licenses required in
connection with the ownership, management and operation of the Borrower Project, the establishment
of the timeshare regime at the Borrower Project pursuant to the Declarations and the other Material
Project Agreements, the sale, advertising, marketing and offering for sale of Timeshare Interests.
Borrower shall at Lender’s request from time to time, Borrower shall deliver to Lender (a) written
statements, in form acceptable to Lender, stating that no registration is necessary for the sale of
Timeshare Interests in the particular state, or (b) such other evidence of compliance with
applicable Legal Requirements as Lender may require.

          14.2 Reserved.

          14.3 Sales and Marketing Practices. All sales and marketing activities of the
Material Parties with respect to the Inventory Collateral currently comply and in the future shall
comply in all material respects with all applicable Legal Requirements. Borrower or the Marketing
Agent shall at all times maintain an active sales and

40

 

marketing force and program for the sale of Timeshare Interests at the Sales Center until all
Obligations are paid in full. Borrower will sell or offer for sale Timeshare Interests only in the
states and jurisdictions where Borrower has first obtained necessary regulatory approvals from time
to time.

          14.4 Reserved.

          14.5 Assessments. Borrower (with respect to Inventory Collateral) is and shall be a
member of the Association and the Condominium Association, which has authority to levy annual
Assessments to cover the costs of maintaining and operating the Inventory Collateral. Any Lien for
unpaid Assessments related to Inventory Collateral is and will at all times be subordinate to the
Lien of the Lender’s Mortgage.

          14.6 Reserved.

          14.7 Exchange Company. Borrower shall cause the Borrower Project to be affiliated
with an Exchange Company.

          14.8 Public Offering Statements. The Public Offering Statement attached hereto as
Exhibit D complies with all applicable Legal Requirements and is accurate and complete.
With respect to the sale of each Timeshare Interest, there shall be in effect at the time of sale
and Borrower has and shall have used an unexpired Public Offering Statement, approved by all
applicable regulatory agencies in South Carolina, Florida and in other jurisdictions in which
Timeshare Interests (or related club memberships) are being offered.

          14.9 Reserved.

          14.10 Management Agreement. Borrower shall keep (or cause the Association to keep)
the existing Management Agreement (or a substitute Management Agreement with a substitute Manager
acceptable to Lender) in full force and effect and shall perform (or cause the Association and any
sub-manager to perform) its obligations thereunder.

          14.11 State Registrations. Borrower agrees to promptly notify Lender if there is a
change in any state timeshare registrations (which add or delete states) during the term of the
Inventory Loan.

          14.12 Cessation of Sales Business. Borrower shall provide prompt notice to Lender of
any cessation of marketing or sales of the Inventory Collateral at the Sales Center or of a
material part of Borrower’s business.

          14.13 Pricing. Borrower shall not, without Lender’s prior written consent which shall
not be unreasonably withheld, adjust the retail pricing schedule for Timeshare Interests such that
the price adjustment would have a Material Adverse Effect.

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          14.14 Remarketing of Defaulted Inventory. Borrower agrees to re-market all Timeshare
Interests related to Defaulted TBS’ Owned Timeshare Loans for Lender in an agreed upon time frame
and to pay Lender a Release Payment upon the sale of any such reacquired and re-marketed Timeshare
Interest.

          (a) DRFS will be responsible for recovering the Timeshare Interests associated with all
current and future Defaulted TBS’ Owned Timeshare Loans (“Defaulted Inventory”) by
foreclosure, deed-in-lieu, or other means as necessary. At the time of any Advance to Borrower of
funds to purchase TBS’ Owned Timeshare Loans from Lender, Lender shall pay to Borrower a fee in the
amount of $750 (“Inventory Recovery Fee”), which shall be payable in addition to the amount
of the Defaulted Inventory Financing (defined below) to be provided by Lender to Borrower as
Advances under the Inventory Loan in accordance with Section 3.1(c). Other than the
Inventory Recovery Fee, all expenses associated with recovering Defaulted Inventory shall be the
responsibility of Borrower or its designee.

          (b) On or before the fifteenth (15th) day of each April, July, October and January
during the term of the Inventory Loan, Borrower will purchase from Lender all of the Defaulted TBS’
Owned Timeshare Loans as of the last day of the preceding calendar quarter. Lender will provide
purchase money financing (“Defaulted Inventory Financing”) in the form of Advances under
the Inventory Loan to Borrower for the acquisition of all Defaulted TBS’ Owned Timeshare Loans
purchased from Lender or an affiliate thereof as described in this Section 14.14(b). The
purchase price paid by Borrower for each Defaulted TBS’ Owned Timeshare Loan will be based on the
amount set forth in Section 3.1(a) above for each type of Timeshare Interest associated
with a Defaulted TBS’ Owned Timeshare Loan. All Defaulted Inventory will be encumbered by Lender’s
Mortgage and the parties shall execute a spreader agreement or such other necessary documents to
reflect the same, and Lender shall be paid a Release Payment as described in Section
7.1(b)(iii) above as sales of such Defaulted Inventory occur. Borrower shall be responsible
for the payment of all maintenance fees and taxes attributable to Defaulted Inventory incurred from
and after the date of purchase of the related Defaulted TBS’ Owned Timeshare Loan.

          14.15 Encumbering Timeshare Interests. Borrower and Lender agree that lender’s
applicable Mortgage is intended to create a first priority Lien on all Timeshare Interests owned by
Borrower as of the Closing Date and in the future by Borrower. Lender may in its sole discretion
amend the Mortgage to specifically encumber all Timeshare Interests owned by Borrower or annexed
subsequent to the date hereof but is under no obligation to do so long as the Mortgage contains an
after acquired property provision.

          14.16 Voting Rights. Borrower hereby appoints and constitutes Lender as its
attorney-in-fact (with full power of substitution) to exercise all of its voting rights pertaining
to the Declarations as well as pertaining to any Inventory Collateral in which Borrower has an
interest giving rise to the right to vote. This power of attorney is coupled with an interest and
shall be irrevocable for so long as any Obligations are owing by Borrower to Lender. This power of
attorney may be used from time to time in

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the sole discretion of Lender if any Event of Default has occurred and is continuing and in
accordance with the terms of the Declarations. Borrower agrees to execute, from time to time, such
other documents as Lender may request including, without limitation, a proxy in form and substance
approved by Lender (which proxy shall, at the request of Lender, be periodically renewed) in its
discretion and file the same with the Secretary of the Association and the Condominium Association
in accordance with the respective Association’s Bylaws.

     Following the occurrence and during the continuation of any Event of Default, if any voting
rights pertaining to any Inventory Collateral owned by Borrower or in which Borrower has an
interest giving rise to the right to vote (whether as declarant, as a holder of a mortgage or
security interest or otherwise) shall be exercisable pursuant to the attendance by Borrower at a
meeting of the members of the Association or Condominium Association in accordance with the terms
of the Bylaws of the Association and Condominium. Borrower agrees to exercise its right to vote in
respect of such attendance in accordance with the rights of Lender under the first paragraph of
this Section 14.16 as if the proxy referred to therein were directly applicable to such
meeting (any provision in said Bylaws, to the contrary notwithstanding) and to promptly give Lender
written notice of its intention to attend any such meeting if Lender shall then be entitled to
exercise the voting rights in respect thereof.

     Except with the prior written consent of Lender, Borrower shall not propose or vote for or
consent to any modification of, or amendment to Declarations or Association’s Articles of
Incorporation or Bylaws (after such declaration, Articles of Incorporation or Bylaws have been
recorded, filed and adopted, respectively) which or could reasonably be expected in the sole
opinion of Lender to have a Material Adverse Effect. In each case under the Declarations and/or
the Association’s Articles of Incorporation or Bylaws in which the consent or the vote of a holder
of a mortgage or “security interest” in respect of the Inventory Collateral (including any such
case in which Borrower would be considered to be a holder of a mortgage or lien is provided for or
is required, or in which Borrower’s consent is required (as declarant or as an owner of the Pledged
Inventory or as a vendor or mortgagee or otherwise) for any proposed action, Borrower shall not
vote or give such consent without obtaining the prior written consent of Lender if such action
could reasonably be expected in the opinion of Lender to have a Material Adverse Effect.

     15. Reporting Requirements. So long as any portion of the Obligations remains
unsatisfied or Lender has any obligation or commitment to make Advances hereunder, Borrower shall
furnish (or cause to be furnished, as the case may be) to Lender the following:

          15.1 Annual Financial Statements. As soon as available and in any event within one
hundred twenty (120) days after the end of each fiscal year of Borrower and Guarantor, Borrower
shall provide Lender with consolidated audited Financial Statements of TAC. As soon as available
and in any event within one hundred twenty (120) days after the end of each fiscal year of the
Association, Borrower

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shall provide Lender with the annual Financial Statement of the Association certified by an
authorized officer of the Association to be true, correct and complete.

          15.2 Quarterly Financial Statements. As soon as available and in any event within
sixty (60) days after the end of each fiscal quarter of Borrower and Guarantor (with the exception
of the last quarter of each fiscal year) unaudited consolidated balance sheets and income
statements for TAC and each of its subsidiaries including Borrower and Guarantor, as of the end of
such fiscal quarter, all in such detail and scope as may be reasonably required by Lender and
prepared in accordance with GAAP and on a basis consistent with prior accounting periods. Each
quarterly unaudited consolidated Financial Statement of TAC and its subsidiaries, including
Borrower and Guarantor, shall be certified by the chief financial officer of TAC to be true,
correct and complete in all material respects, and shall otherwise be in form reasonably acceptable
to Lender.

          15.3 SEC Reports. Promptly upon submission, any reports submitted by Borrower or
Guarantor to the United States Securities and Exchange Commission.

          15.4 Covenant Compliance Certificate. Each set of annual Financial Statements and
quarterly Financial Statements delivered to Lender pursuant to Sections 15.2 and 15.3 of
this Agreement will be accompanied by a certificate of Borrower and Guarantor in the form of
Exhibit E attached hereto setting forth that the signer has reviewed the relevant terms of
this Agreement (and all other agreements to which Borrower is a party or by which Borrower is
bound) and has made, or caused to be made, under his/her supervision, a review of the transactions
and conditions of Borrower from the beginning of the period covered by the Financial Statements or
reports being delivered therewith to the date of the certificate and that such review has not
disclosed the existence during such period of any condition or event which constitutes a Default or
Event of Default or, if any such condition or event existed or exists or will exist, specifying the
nature and period of existence thereof and what action Borrower has taken or proposes to take with
respect thereto.

          15.5 Sales and Inventory Reports; Project Results. As soon as available and in any
event within thirty (30) days after the end of each month, Borrower shall deliver to Lender, a
monthly sales/conversion report for all sales, detailing the sales (past any applicable rescission
period) of all Inventory Collateral as represented by converted Points Equivalent Timeshare
Interests at the Borrower Project for the period covered thereby, the payment of Release Payments
to Lender, and the Inventory Collateral then subject to Lender’s Mortgage, together with the
quarterly and year-to-date financial results for the Borrower Project, all certified by an officer
of Borrower to be true, correct and complete and otherwise in a form acceptable to Lender. Within
ninety (90) days after the end of each fiscal year of Borrower, Borrower shall deliver to Lender an
annual sales/conversion report for all Inventory Collateral in the Borrower Project setting forth,
without limitation, the amount of remaining Inventory Collateral then subject to Lender’s Mortgage,
certified by Borrower to be true, correct and complete and in a form acceptable to Lender.

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          15.6 Budgets and Assessments. Within one hundred eighty (180) days after each is
available, proposed annual maintenance and operating budgets of the Association certified to be
accurate by the Manager, proposed annual maintenance and operating budget of the Condominium
Association, provided that the same is reasonably available to Borrower and a statement of annual
Assessments to be levied upon the Owners of Timeshare Interests. As long as Borrower’s Affiliate
is the Manager, Borrower shall deliver to Lender, at Borrower’s expense, within thirty (30) days
after the end of each fiscal quarter, a report setting forth the annual Assessments collected from
all Owners of Timeshare Interests, the amount contributed by Borrower to fund any operating deficit
compared to the budget of operating expenses for such period and indicating all reserves held for
insurance, taxes and capital repairs and replacement.

          15.7 Reserved.

          15.8 Audit Reports. Promptly upon receipt thereof, one copy of each other report
submitted to Borrower by independent public accountants or other Persons in connection with any
annual, interim or special audit made by them of the books of Borrower, the Association or the
Borrower Project.

          15.9 Notice of Default or Event of Default. Within five (5) days after becoming aware
of the existence of any condition or event which constitutes a Default or an Event of Default, a
written notice specifying the nature and period of existence thereof and what action Borrower is
taking or proposes to take with respect thereto.

          15.10 Notice of Claimed Default. Within five (5) days after becoming aware that the
holder of any material obligation or of any evidence of material indebtedness of Borrower has given
notice or taken any other action with respect to a claimed default or event of default thereunder,
a written notice specifying the notice given or action taken by such holder and the nature of the
claimed default or event of default and what action such Borrower is taking or proposes to take
with respect thereto.

          15.11 Material Adverse Developments. Within five (5) days after becoming aware of any
litigation, claim, action, proceeding, development or other information which could reasonably be
expected to have a Material Adverse Effect on Borrower, Guarantor, the Inventory Collateral, the
Borrower Project or of the ability of any Material Party to perform its obligations under the Loan
Documents, Borrower shall provide Lender with telephonic notice, followed by telecopied and mailed
written confirmation, specifying the nature of such litigation, claim, action, proceeding,
development, information or dispute and such anticipated effect.

          15.12 Other Information. Borrower shall promptly deliver to Lender any other
information in Borrower’s possession or available to Borrower related to the Inventory Collateral,
the Borrower Project, Borrower, Guarantor or the Association or the Condominium Association as
Lender may in good faith request.

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     16. Subordinated Indebtedness.

     All indebtedness or liabilities, direct or indirect, contingent or non contingent, of Borrower
to Guarantor or any Affiliate thereof or to DRC or any of the DRC Affiliates, or any shareholder,
partner, or member of Borrower, Guarantor, any Affiliate thereof, DRC or any of the DRC Affiliates
(exclusive of any Management Agreement, Transfer Pricing Agreement and Servicing Agreement entered
into with one or more of the DRC Affiliates), and all liens therefor, and effective upon the
occurrence and during the continuation of an Event of Default (allowing for notice and cure
provisions as may be applicable hereunder), distributions of profit or withdrawals of capital to or
by any of the foregoing Persons (collectively, “Subordinated Indebtedness”), are hereby and
shall be subordinated to the Inventory Loan. Borrower hereby represents and warrants to Lender
that the Subordinated Indebtedness comprises all of the Borrower’s debts, liabilities and
obligations to any shareholders, members, partners, officers, directors or employees of Borrower,
Guarantor, any Affiliates thereof, DRC or any DRC Affiliates, except for executive compensation and
bonuses (in accordance with industry norms). Upon the occurrence and during the continuation of an
Event of Default, Borrower will not directly or indirectly make or permit any payment (exclusive of
any payment of sales and marketing fees to Marketing Agent, management fees to Manager and
servicing fees to Servicer) to be made in respect of any Subordinated Indebtedness.

     17. Events of Default.

     An “Event of Default” shall exist if any of the following shall occur:

          17.1 Payments. Borrower shall fail to make when due, any payment or mandatory
prepayment of principal or interest, any Loan Costs, fees or any other payment Obligations.

          17.2 Covenant Defaults. Borrower shall fail to perform or observe any nonpayment
Obligations or any other covenants, agreements or warranties contained in this Agreement or in any
of the Loan Documents (not listed as an Event of Default under another subsection of Section
17), and such failure shall continue unremedied for a period of thirty (30) days after the
earlier to occur of (a) written notice from Lender to Borrower of the existence of such failure, or
(b) any officer, principal or member of Borrower, Guarantor or TAC has actual knowledge of such
failure, provided that (i) in the event such failure (A) is incapable of remedy,
(B) consists of a default of any obligations to pay principal, interest, Loan Costs, fees or other
payment Obligations, or (C) was knowingly caused or permitted by Borrower, then Borrower shall not
be entitled to any notice or cure period and (ii) in the event that Borrower is entitled to cure
such failure within such thirty (30) day period, but due to the nature of such failure, the cure
cannot be completed within the thirty (30) day period notwithstanding Borrower’s diligent efforts
to do so, then Borrower shall have an additional thirty (30) days to complete such cure (for a
total of sixty (60) days), provided that Borrower is diligently seeking to cure such default within
the additional thirty (30) day period.

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          17.3 Warranties or Representations. Any representation or other statement made by or
on behalf of any Material Party in this Agreement, in any of the Loan Documents or in any
instrument furnished in compliance with or in reference to the Loan Documents, is or proves to be
false, misleading or incorrect in any material respect as of the date made or reaffirmed.

          17.4 Enforceability of Liens. Any Lien granted by Borrower to Lender in connection
with the Obligations is or becomes invalid or unenforceable or is not, or ceases to be, a perfected
first priority Lien in favor of Lender encumbering the asset to which it is intended to encumber.

          17.5 Involuntary Proceedings. A case is commenced or a petition is filed against any
Material Party under any Debtor Relief Law, a receiver, liquidator or trustee of any Material Party
or of any material asset of any Material Party is appointed by court order and such order remains
in effect for more than sixty (60) days; or if any material asset of any Material Party is
sequestered by court order and such order remains in effect for more than sixty (60) days.

          17.6 Proceedings. Any Material Party voluntarily seeks, consents to or acquiesces in
the benefit of any provision of any Debtor Relief Law, whether now or hereafter in effect, consents
to the filing of any petition against it under such law, makes an assignment for the benefit of its
creditors, admits in writing its inability to pay its debts generally as they become due, or
consents or suffers to the appointment of a receiver, trustee, liquidator or conservator for a
Material Party or any part of its assets.

          17.7 Attachment; Judgment; Tax Liens. The issuance, filing, levy or seizure against
the Inventory Collateral, of one or more attachments, injunctions, executions, tax Liens or
judgments for the payment of money cumulatively in excess of $100,000 in the aggregate, or the
filing of any mechanics’ or materialmen’s Lien against the Inventory Collateral or any asset of
Borrower or claim of Lien which is not discharged in full, bonded or stayed within sixty (60) days
after Borrower learns of such issuance or filing.

          17.8 Failure to Deliver Payments and Removal of Inventory Collateral. If Borrower (i)
fails to deliver payments made under the Inventory Collateral directly to Lender in accordance with
the terms and provisions of this Agreement and the other Loan Documents, or (ii) inadvertently
removes, transfers, conveys or permits any of the Inventory Collateral to be removed, transferred
or conveyed, and such failure is not cured within fifteen (15) days.

          17.9 Documents. Any of the Material Project Agreements shall be terminated, amended
or modified or restated in any material respect, without Lender’s prior written consent which
action could reasonably be expected to have a Material Adverse Effect on the Inventory Collateral.

          17.10 Reserved.

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          17.11 Material Adverse Change. Any material adverse change, as determined by Lender
in good faith, in the financial condition, business or operations of Borrower, Guarantor or TAC or
in the condition of the Inventory Collateral or the Borrower Project, the effect of which is to
render uncertain Borrower’s, Guarantor’s or TAC’s ability to materially perform its obligations
under the Loan Documents.

          17.12 One-to-One Ratio. Any violation of the One-to-One Ratio.

          17.13 Merger or Dissolution. Any merger, dissolution, consolidation, reorganization,
liquidation or restructure of any Material Party except to the extent permitted under Section
12.2(b) hereof.

          17.14 Default by Borrower or Guarantor Under Other Agreements. Any default by
Borrower or Guarantor (i) in the payment of any indebtedness in connection with the Inventory Loan;
(ii) in the Material Project Agreements; (iii) in the payment or performance of other indebtedness
for borrowed money or obligations in excess of $100,000; or any acceleration of obligations owed by
TAC to any lender which default is not cured (return to compliance with existing loan documents)
within ten (10) days after the acceleration occurs.

          17.15 Reserved.

          17.16 Loss of License. The suspension, loss, revocation or failure to renew or file
for renewal of any License now held or hereafter acquired by a Material Party with respect to the
marketing, sale or operation of the Inventory Collateral or Borrower’s business in the same manner
as it is being conducted which is not cured in thirty (30) days after issuance; provided, however,
if the suspension, loss, revocation or failure to renew or pay is incapable of cure within thirty
(30) days and Borrower shall be diligently pursuing a cure, such thirty (30) day period shall be
extended by a period not to exceed thirty (30) additional days.

          17.17 Suspension of Sales. The issuance of any stay order, cease and desist order,
Injunction, temporary restraining order or similar judicial or nonjudicial sanction limiting or
otherwise materially and adversely affecting any sales activities related to Timeshare Interests,
other business operations in respect of the Inventory Collateral, or the enforcement of Lender’s
remedies and such order or other court sanction is not terminated or dissolved within thirty (30)
days after issuance; provided, however, if the termination or dissolution is incapable of cure
within thirty (30) days and Borrower shall be diligently pursuing a cure, such thirty (30) day
period shall be extended by a period not to exceed thirty (30) additional days.

          17.18 Reserved.

          17.19 Breach of Other Agreements. Any violation or breach of any agreement, covenant
or restriction affecting title to the Inventory Collateral.

          17.20 Fraud. Any Material Party takes or is in the process of taking any action which
Lender in good faith believes is intended to: (a) defraud any creditor,

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including Lender, (b) convert any portion of the Inventory Collateral; or (c) violate or
circumvent in any material manner any applicable Legal Requirements affecting the Inventory
Collateral.

          17.21 Reserved.

          17.22 Insolvency. Borrower becomes insolvent because the amount of Borrower’s
liabilities to any Person exceeds the amount of Borrower’s assets or otherwise generally unable to
pay its debts as and when they become due or payable.

          17.23 Reserved.

          17.24 Change of Control
.. If any Change of Control shall have occurred.

          17.25 Financial Condition. A material adverse change in the financial condition of
Borrower, Guarantor, or any of the DRC Affiliates has occurred as determined by Lender in its
reasonable, good faith discretion.

          17.26 Cessation of Sales or Business. Any cessation without Lender’s prior written
consent of (i) marketing or sales of the Inventory Collateral at the Sales Center, or (ii) a
material part of Borrower’s business shall occur (including, without limitation, operation of the
Inventory Collateral) and if such marketing, sales or business shall not be resumed within thirty
(30) days after such cessation, unless the cessation is due to a force majeure event.

          17.27 Observance of Loan Documents. Any default by Borrower in the due observance of
any term, covenant or condition in any Loan Document or the revocation or attempted revocation or
repudiation thereof, in whole or in part by Borrower.

          17.28 Change in Marketing Agent, Manager or Servicer. Any change in the entity that
is the Marketing Agent, the Manager or the Servicer, without the prior written consent of Lender.

     18. Termination of Obligation to Advance/Remedies.

          18.1 Termination of Obligation to Advance. Should an Event of Default occur, Lender
may, with or without proceeding with any sale or foreclosure or demanding payment or performance of
the Obligations, without notice, terminate Lender’s further performance under this Agreement or any
other agreement or agreements between Lender and Borrower, including, without limitation, any
commitment of Lender to lend under this Agreement in its entirety, or any portion of any such
commitment, to the extent Lender shall deem appropriate, without further liability or obligation by
Lender. Such termination shall not absolve, release or otherwise affect the liability or
obligations of Borrower or the Liens, rights, powers and other remedies of Lender. If Lender’s
obligation to make Advances under the Inventory Loan is terminated, then Borrower’s obligation to
purchase Defaulted Inventory hereunder shall also be terminated.

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          18.2 Remedies Upon Default. Should an Event of Default occur, Lender, at its sole
option, may take anyone or more of the actions described in this Section 18, all without
notice to Borrower or Guarantor:

          (a) Acceleration. Without demand or notice of any nature whatsoever, declare the
Obligations, or any part thereof, immediately due and payable, whereupon the same shall be due and
payable, provided that, if an Event of Default occurs under Sections 17.5 or 17.6, all
Obligations shall become immediately due and payable without further action.

          (b) Termination of Lender’s Performance. Terminate a commitment, if any, of Lender to
lend under this Agreement, the Loan Documents in their entirety, or any portion of any such
commitment, and/or terminate Lender’s further performance under this Agreement, the Loan Documents
in their entirety, without further liability or obligation to Borrower, to the extent Lender shall
deem appropriate, all without notice to Borrower.

          (c) Judgment. Reduce Lender’s claim to judgment, foreclose or otherwise enforce
Lender’s Lien against all or any part of the Inventory Collateral by any available judicial or
other procedure under law. Lender’s right to sue and recover a judgment either before, after or
during the pendency of any proceeding for the enforcement of any Lien in favor of Lender, and the
right of Lender to recover such judgment shall not be affected by any taking, possession or
foreclosure sale hereunder or by the exercise of any other right, power or remedy for the
enforcement of the terms of any Lien in favor of Lender, or the foreclosure of the Lien thereof.

          (d) Foreclosure. Whether or not Lender takes possession of the property encumbered by
the Lender’s Mortgage, Lender may proceed to foreclose Lender’s Mortgage and to sell the property
encumbered by Lender’s Mortgage in its entirety or in separate parcels, under the judgment or
decree of a court or courts of competent jurisdiction and to pursue any other remedy available to
it, all as Lender shall deem appropriate. Upon commencement of suit or foreclosure of Lender’s
Mortgage, all Obligations, if not previously accelerated and declared due, shall be immediately due
and payable. Upon any foreclosure sale pursuant to judicial proceedings, Lender may bid for and
purchase all or any portion of the property encumbered by Lender’s Mortgage and, upon compliance
with the terms of sale, may hold, retain and possess and dispose of such property.

     In case of a foreclosure sale under Lender’s Mortgage and of the application of the proceeds
of sale to the payment of the Obligations, Lender shall be entitled to enforce payment of and to
receive all Obligations then remaining due and unpaid, and Lender shall be entitled to recover
judgment for any portion of the Obligations remaining unpaid, with interest.

     Borrower agrees, to the full extent that it may lawfully so agree, that no recovery of any
such judgment by Lender and no attachment or levy of any execution upon any such judgment, upon any
of the Inventory Collateral or upon any other property shall in

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any manner or to any extent affect the Lien of Lender’s Mortgage or any part thereof or any
Lien, rights, powers or remedies of Lender hereunder, and such Lien, rights, powers and remedies
shall continue unimpaired.

          (e) Lender’s Right to Take Possession, Operate and Apply Income.

               (i) Upon Lender’s demand, Borrower shall forthwith surrender to Lender the actual possession
of the property encumbered by the Lender’s Mortgage and, to the extent permitted by law, Lender may
enter and take possession of all or any portion of the property encumbered by the Lender’s Mortgage
and may exclude Borrower and its agents and employees wholly therefrom and may have joint access
with Borrower to Borrower’s books, papers and accounts. If Borrower fails to surrender or deliver
all or any portion of the property encumbered by the Lender’s Mortgage to Lender upon demand,
Lender may obtain a judgment or decree conferring on Lender the right to immediate possession or
requiring Borrower to deliver immediate possession of all or part of the property encumbered by the
Lender’s Mortgage to Lender, and Borrower hereby specifically consents to the entry of such a
judgment or decree.

               (ii) Upon every such entering upon or taking of possession, Lender may hold, store, use,
operate, manage and control the property encumbered by the Lender’s Mortgage and conduct Borrower’s
business thereon and, from time to time do any of the following things as Lender may from time to
time deem necessary, appropriate or desirable:

                    (A) make all maintenance, repairs, renewals, replacements, additions and improvements
necessary and proper to the property encumbered by the Lender’s Mortgage and purchase or otherwise
acquire additional fixtures, personalty and other property;

                    (B) insure, manage and operate the property encumbered by the Lender’s Mortgage and exercise
all of the rights and powers of Borrower (in Lender’s name or otherwise) with respect to the
insurance, management and operation of the property encumbered by the Lender’s Mortgage;

                    (C) enter into any and all agreements with respect to the exercise by others of any of the
powers herein granted to Lender; and

                    (D) perform or cause to be performed any and all work and labor necessary to maintain the
property encumbered by the Lender’s Mortgage.

               (iii) Lender may collect and receive all the income, revenues, rents, issues and profits of
the property encumbered by the Lender’s Mortgage, including those past due as well as those
accruing thereafter. Lender shall apply such sums received by Lender, to the Obligations, in such
order as Lender may elect, after deducting therefrom: (A) all expenses of taking, holding, managing
and operating the property encumbered by the Lender’s Mortgage (including compensation for the

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services of all Persons employed for such purposes); (B) the cost of all such maintenance,
repairs, renewals, replacements, additions, betterments, improvements, purchases and acquisitions;
Lender may determine to pay; (C) the cost of insurance; (D) such taxes, assessments and other
charges, as Lender may determine to pay; (E) other proper charges upon the property encumbered by
the Lender’s Mortgage or any part thereof; and (F) the compensation, expenses and disbursements of
the attorneys and agents of Lender, including attorneys’ fees and costs for any appeal.

               (iv) If an Event of Default giving rise to pursuit of the foregoing remedy shall have been
cured, Lender shall surrender possession of the property encumbered by the Lender’s Mortgage to
Borrower, its successors or assigns; provided however, that Lender’s right to take possession and
to pursue any other remedies hereunder or under any of the Loan Documents shall exist if any
subsequent Event of Default shall occur and further provided that such surrender shall not have the
effect of releasing Lender’s lien on the property so surrendered.

          (f) Sale of Inventory Collateral. After notification, if any, provided for in
Section 18.3, sell or otherwise dispose of, at the office of Lender, or elsewhere, as
chosen by Lender, all or any part of the Inventory Collateral, and any such sale or other
disposition may be as a unit or in parcels, by public or private proceedings, and by way of one or
more contracts (it being agreed that the sale of any part of the Inventory Collateral shall not
exhaust Lender’s power of sale, but sales may be made from time to time until all of the Inventory
Collateral has been sold or until the Obligations, have been paid in full and fully performed), and
at any such sale it shall not be necessary to exhibit the Inventory Collateral. Borrower hereby
acknowledges and agrees that a private sale or sales of the Inventory Collateral, after
notification as provided for in Section 18.3, shall constitute a commercially reasonable
disposition of the Inventory Collateral sold at any such sale or sales, and otherwise, commercially
reasonable action on the part of Lender.

          (g) Retention of Collateral/Purchase of Inventory Collateral. At its discretion,
retain such portion of the Inventory Collateral as shall aggregate in value to an amount equal to
all or part of the outstanding Obligations, in full or partial satisfaction of the Obligations,
whenever the circumstances are such that Lender is entitled and elects to do so under applicable
law. Lender may also buy the Inventory Collateral or any part thereof at any public or private
sale.

          (h) Receiver. As a matter of strict right and without regard to the value or occupancy
of the Inventory Collateral, apply by appropriate procedures for the appointment of a receiver who
will enter upon and take possession of the Borrower Project, collect the rents and profits
therefrom and apply the same as the court may direct. The receiver shall have all the rights and
powers permitted under the laws of the state in which the Inventory Collateral is located. All
costs and expenses (including receiver’s fees, attorney’s fees and costs, including attorneys’ fees
and costs incurred as a result of any appeal, and agents compensation) incurred in connection with
the appointment of a receiver shall be secured by the Inventory Collateral. The right to enter and
take possession of the Inventory Collateral, to manage and operate the same

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and to collect the rents, issues and profits thereof (whether by a receiver or otherwise)
shall be cumulative to any other right or remedy hereunder or afforded by law and may be exercised
by Lender concurrently therewith or independently thereof. Lender shall be liable to account only
for such rents, issues and profit actually received by Lender. Notwithstanding the appointment of
any receiver, trustee or other custodian, Lender shall be entitled, as pledgee, to the possession
or control of any cash or other instruments, at the time held by or payable or deliverable under
the terms of this Agreement or any other Loan Document to Lender. Borrower hereby consents to any
such appointment. Lender may also apply by appropriate judicial proceedings for appointment of a
receiver for the Inventory Collateral, or any part thereof, and Borrower hereby consents to any
such appointment.

          (i) Exercise of Uniform Commercial Code and Other Rights. Lender shall have all the
rights and remedies of a secured party under the Uniform Commercial Code and other legal and
equitable rights to which it may be entitled, and may exercise any and all other rights or remedies
afforded by the Loan Documents as Lender shall deem appropriate, at law, in equity or otherwise,
including, but not limited to, the right to bring suit or other proceeding, either for specific
performance of any covenant or condition contained in the Loan Documents or in aid of the exercise
of any right or remedy granted to Lender in the Loan Documents. Lender shall also have the right to
require Borrower to assemble any of the Inventory Collateral not in Lender’s possession, at
Borrower’s expense, and make it available to Lender at a place to be determined by Lender which is
reasonably convenient to both parties, and Lender shall have the right to take immediate possession
of all of the Inventory Collateral, and may enter the Borrower Project or any of the premises of
Borrower or wherever the Inventory Collateral shall be located, with or without process of law
wherever the Inventory Collateral may be, and, to the extent such premises are not the property of
Lender, to keep and store the same on said premises until sold (and if said premises shall be the
property of Borrower, Borrower agrees not to charge Lender for use and occupancy, rent, or storage
of the Inventory Collateral).

          (j) Exercise of Rights Under the Collateral Assignments. Exercise any and all rights
and remedies granted to Lender under the Collateral Assignments.

          (k) Power of Attorney. Exercise Lender’s rights under powers of attorney granted to it
including the power of attorney referenced in Section 19.9 below.

          18.3 Sale of Inventory Collateral. Reasonable notification of time and place of any
public sale of the Inventory Collateral or reasonable notification of the time after which any
private sale or other intended disposition of the Inventory Collateral is to be made shall be sent
to Borrower and to any other person entitled under the Uniform Commercial Code to notice; provided,
however, that if the Inventory Collateral threatens to decline speedily in value or is of a type
customarily sold on a recognized market, Lender may sell or otherwise dispose of the Inventory
Collateral without notification, advertisement or other notice of any kind. It is agreed that
notice sent not less than ten (10) calendar days prior to the taking of the action to which such
notice relates is reasonable notification and notice for the purposes of this Section 18.3.
Lender shall

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have the right to bid at any public or private sale on its own behalf. Out of money arising
from any such sale, Lender shall retain an amount equal to all costs and charges, including
attorneys’ fees for advice, counsel or other legal services or for pursuing, reclaiming, seeking to
reclaim, taking, keeping, removing, storing and advertising such Inventory Collateral for sale,
selling same and any and all other charges and expenses in connection therewith and in satisfying
any prior Liens thereon. Any balance shall be applied to the Obligations, and in the event of
deficiency, Borrower shall remain liable to Lender. In the event of any surplus, such surplus shall
be paid to Borrower or to such other Persons as may be legally entitled to such surplus.

     In connection with the disposition of any Inventory Collateral by or on behalf of Lender,
Borrower agrees that Lender may disclaim any warranties and dispose of such Inventory Collateral
without any warranties whatsoever and that Lender shall not be deemed to have acted in a
commercially unreasonable manner as a result thereof. If Lender sells any of the Inventory
Collateral upon credit, Borrower shall only be credited with payments actually received by Lender
with respect to such sale. If the buyer at such sale fails to pay in full for any of the Inventory
Collateral, Lender may resell such Inventory Collateral. Lender is hereby granted a license and
right to use, after an Event of Default and without charge, all of the Borrower’s labels, general
intangibles, intellectual property, equipment, trade secrets, tradenames, trademarks, service
marks, and advertising materials for selling and advertising for sale of any of the Inventory
Collateral together with all Borrower’s rights under all Licenses, to the extent assignable.

          18.4 Application of Proceeds. All proceeds from any sale or realization upon any of
the Inventory Collateral after an Event of Default shall be applied or paid over as follows: (a)
first, to the payment of all costs and expenses incurred in connection with such sale or
realization, (b) second, to payment of the Obligations in such order as Lender may elect in
its sole discretion with Borrower and Guarantor remaining liable for any deficiency, and (c)
third, the balance (if any), subject to any duty or requirement of any applicable Legal
Requirements, to whomsoever is legally entitled thereto.

          18.5 Delegation of Duties and Rights. Lender may execute any of its duties and/or
exercise any of its rights or remedies under the Loan Documents by or through its officers,
directors, employees, attorneys, agents or other representatives.

          18.6 Lender Not in Control. None of the covenants or other provisions contained in
this Agreement or in any Loan Document shall give Lender the right or power to exercise control
over the affairs and/or management of Borrower.

          18.7 Rights of Lender Regarding Inventory Collateral. In addition to all other rights
possessed by Lender, Lender, at its option, may from time to time after there shall have occurred
an Event of Default, and so long as such Event of Default remains uncured, at its sole discretion,
take the following actions:

          (a) Transfer all or any part of the Inventory Collateral into the name of Lender or its
nominee;

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          (b) Take control of any proceeds of any of the Inventory Collateral;

          (c) Extend or renew the Inventory Loan and grant releases, compromises or indulgences with
respect to the Obligations, any portion thereof, any extension or renewal thereof, or any security
therefor, to any obligor hereunder or thereunder; and

          (d) Exchange certificates or instruments representing or evidencing the Inventory Collateral
for certificates or instruments of smaller or larger denominations for any purpose consistent with
the terms of this Agreement.

          18.8 Waivers.

          (a) Borrower irrevocably waives: (i) all notices of Default and Events of Default except to
the extent expressly required in this Agreement; (ii) all procedural errors, defects and
imperfections in any legal proceedings under the Loan Documents or in connection with any of the
transactions contemplated thereunder; (iii) demand; presentment and protest; notice of demand,
presentment, protest, acceleration and non-payment; and (iv) the benefit of any valuation,
appraisal or exemption laws.

          (b) If Lender: (i) grants any forbearance or an extension of time for the payment of any sums
secured by the Inventory Collateral; (ii) takes other, additional or substitute Inventory
Collateral or security for the Obligations; (iii) waives or does not exercise any right granted in
this Agreement or any Loan Documents; (iv) alters, substitutes or releases any part of the
Inventory Collateral from the Lien in favor of Lender or otherwise changes any of the terms of this
Agreement or any Loan Documents; (v) releases any Person liable for the payment of any part of the
Obligations, (vi) extends the time for payment or otherwise alters the payment terms of the
Obligations, (vii) consents to the filing of any map, plat or replat of the Property; (viii)
consents to the granting of any easement on the Property; or (ix) makes or consents to any
agreement subordinating Lender’s Lien against any of the Inventory Collateral, any such act or
omission by Lender shall not release, discharge, modify, change or affect Borrower’s original
liability under this Agreement or any of the Loan Documents or otherwise, or the original liability
of any maker, general partner, co-signer, endorser, surety or guarantor nor shall any such act or
omission preclude Lender from exercising any right, power or privilege granted in this Agreement or
any Loan Document in the event of any other concurrent or subsequent default, nor (except as
otherwise expressly provided in an instrument or instruments executed by Lender) shall Lender’s
Lien against any of the Inventory Collateral be altered thereby.

          (c) Upon the sale or transfer by operation of law or otherwise of all or any part of the
Inventory Collateral, Lender, without further notice, is authorized and empowered to deal with any
such transferee as fully and to the same extent as it might deal with Borrower, without in any way
waiving, releasing or discharging any of Borrower’s liabilities or obligations hereunder.

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          (d) No failure or delay on the part of Lender in exercising any right, remedy or power under
this Agreement or any other Loan Document or in giving or insisting upon strict performance by any
Material Party or in giving notice hereunder shall operate as a waiver of the same or any other
power or right, and no single or partial exercise of any such power or right shall preclude any
other or further exercise thereof or the exercise of any other such power or right. Lender,
notwithstanding any such failure, shall have the right thereafter to insist upon the strict
performance of any and all of the terms and provisions of this Agreement or any other Loan Document
to be performed by Borrower or any Material Party. The collection and application of proceeds, the
taking possession of the Inventory Collateral, and the exercise of the rights of Lender contained
in the Loan Documents and this Agreement shall not cure or waive any default, or affect any notice
of default, or invalidate any acts done pursuant to such notice. No waiver by Lender of any breach
or default of or by any party hereunder shall be deemed to alter or affect Lender’s rights
hereunder with respect to any prior or subsequent Default or Event of Default.

          (e) BORROWER HEREBY WAIVES ALL NOTICES (EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREUNDER) WITH
RESPECT TO ANY LOSSES, DAMAGES, LIABILITIES, SUITS, COSTS AND EXPENSES, AND ALL OTHER DEMANDS
WHATSOEVER HEREBY INDEMNIFIED, AND AGREES THAT ITS OBLIGATIONS UNDER THIS AGREEMENT SHALL NOT BE
AFFECTED BY ANY CIRCUMSTANCES, WHETHER OR NOT REFERRED TO ABOVE, WHICH MIGHT OTHERWISE CONSTITUTE
LEGAL OR EQUITABLE DISCHARGES OF ITS OBLIGATIONS HEREUNDER.

          (f) IF A COURT OF COMPETENT JURISDICTION SHOULD DETERMINE THAT BORROWER IS ENTITLED TO RECOVER
DAMAGES FROM LENDER FOR ANY REASON OR UPON ANY CAUSE, CLAIM OR COUNTERCLAIM, IN CONNECTION WITH THE
INVENTORY LOAN OR THE TRANSACTIONS PROVIDED FOR OR CONTEMPLATED PURSUANT TO THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS, BORROWER STIPULATES AND AGREES THAT ANY SUCH DAMAGES SHALL NOT INCLUDE
CONSEQUENTIAL, PUNITIVE, OR SPECIAL DAMAGES. IN THE EVENT THE FOREGOING PROVISION IS NOT ENFORCED
BY THE COURTS, THEN BORROWER AGREES THAT BORROWER’S SOLE REMEDY FOR ANY CAUSE, CLAIM OR
COUNTERCLAIM WILL BE TO RECOVER DAMAGES IN AN AMOUNT EQUAL TO ITS REASONABLE OUT OF POCKET EXPENSES
IN CONNECTION WITH THE INVENTORY LOAN AND SHALL NOT INCLUDE PUNITIVE, SPECIAL, OR CONSEQUENTIAL
DAMAGES.

          18.9 Cumulative Rights. All rights and remedies available to Lender under the Loan
Documents shall be cumulative of and in addition to all other rights and remedies granted to Lender
under any of the Loan Documents, at law or in equity, whether or not the Inventory Loan is due and
payable and whether or not Lender shall have instituted any suit for collection or other action in
connection with the Loan Documents.

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          18.10 Diminution in Value of Collateral. Lender shall not have any liability or
responsibility whatsoever for any diminution or loss in value of any of the Inventory Collateral,
specifically including that which may arise from Lender’s negligence or inadvertence, whether such
negligence or inadvertence is the sole or concurring cause of any damage.

          18.11 Discontinuance of Proceedings. If Lender proceeds to enforce any right or
remedy under the Loan Documents by foreclosure, entry or otherwise and such proceedings shall have
been discontinued or abandoned for any reason or shall have been determined adversely to Lender,
then Borrower and Lender shall be restored to their former positions and rights hereunder and all
rights, powers and remedies of Lender shall continue as if no such proceeding occurred.

          18.12 Indemnification of Lender Parties. In addition to (and not in lieu of) any
other provisions of any Loan Document providing for indemnification in favor of Lender, Borrower
agrees to defend, indemnify and hold harmless the Indemnified Lender Parties, from and against, and
promptly pay on demand or reimburse each of them with respect to, any and all liabilities, claims,
demands, losses, damages, costs and expenses (including without limitation, reasonable attorneys’
and paralegals’ fees and costs), actions or causes of action of any and every kind or nature
whatsoever asserted against or incurred by any of them by reason of or arising out of or in any way
related or attributable to: (a) any failure or alleged failure of Borrower to perform any of its
covenants or obligations with respect to the Borrower Project or to the Purchasers of any of the
Inventory Collateral or any incorrectness or inaccuracy of any representation or warranties to any
Purchaser; (b) the construction, development or operation of the Borrower Project; (c) the
debtor-creditor relationships between Borrower on the one hand, and the Purchasers or Lender or its
participants, as the case may be, on the other; (d) the sale of Timeshare Interests; (e) Borrower’s
performance under or related to this Agreement, the Loan Documents or the Inventory Collateral; (f)
the transactions contemplated under any of the Loan Documents or any of the Material Project
Agreements, including without limitation, those in any way relating to or arising out of the
violation of any applicable Legal Requirements; (g) any breach of any covenant or agreement or the
incorrectness or inaccuracy of any representation and warranty contained in this Agreement or any
of the Loan Documents (including without limitation any certification delivered to Lender); and (h)
any and all Taxes, and any and all fees or charges to be paid by Borrower including, without
limitation under the Timeshare Act, which may at any time arise or become due prior to the payment,
performance and discharge in full of the Obligations; Such indemnification shall not give Borrower
any right to participate in the selection of counsel for Lender or the conduct or settlement of any
dispute or proceeding for which indemnification may be claimed.

     The obligations of Borrower to indemnify, protect, defend and hold Lender harmless as provided
in this Agreement are absolute, unconditional, present and continuing, and shall not be dependent
upon or affected by the genuineness, validity, regularity or enforceability of any claim, demand or
suit from which Lender is indemnified, except to the extent any such assessments, claims, demands,
causes of action, losses, damages, liabilities, suits, costs and expenses arise as a result of the

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gross negligence or willful misconduct of Lender. The indemnity provisions in this
Section 18.12 shall survive for one hundred and eighty (180) days after the satisfaction of
the Obligations and termination of this Agreement, and remain binding and enforceable against
Borrower, together with its successors and assigns, for such one hundred and eighty (180) day
period.

     19. Certain Rights of Lender

          19.1 Suits to Protect the Inventory Collateral. Lender shall have power at any time
and from time to time, to: (a) institute and maintain such suits and proceedings as it may deem
expedient to prevent any impairment of the Inventory Collateral by any acts which may be unlawful
or which violate this Agreement or any of the Loan Documents; (b) preserve or protect the Inventory
Collateral; and (c) restrain the enforcement of or compliance with any Legal Requirements that may
be unconstitutional or otherwise invalid, if the enforcement of or compliance with such enactment,
rule or order would impair Lender’s security.

          19.2 Protection of Inventory Collateral. Lender shall have the power at any time and
from time to time to take such actions as Lender deems necessary or appropriate to protect Lender’s
Liens in and to preserve the Inventory Collateral, and to establish, maintain and protect the
enforceability of Lender’s rights with respect thereto, all at the expense of Borrower. Borrower
agrees to cooperate fully with all of Lender’s efforts to preserve the Inventory Collateral and
Lender’s Liens and rights and will take such actions to preserve the Inventory Collateral and
Lender’s Liens and rights as Lender may direct, including, without limitation, by promptly paying
upon Lender’s demand therefor, all Taxes that may be or may become due in respect of any of the
Inventory Collateral.

          19.3 Performance by Lender. If Borrower fails to perform any covenant or agreement
contained herein or in any Loan Document, Lender may itself perform, or cause the performance of,
such covenant or agreement, and the sums expended by Lender and the expenses of Lender incurred in
connection therewith shall be payable by Borrower and be included as part of the Obligations. In no
event, however, shall Lender have any obligation or duties whatsoever to perform any covenant or
agreement of Borrower contained herein or in any of the Loan Documents, Material Project
Agreements, and any such performance by Lender shall be wholly discretionary with Lender. The
performance by Lender, of any agreement or covenant of Borrower on any occasion shall not give rise
to any duty on the part of Lender to perform any such agreements or covenants on any other occasion
or at any time. In addition, Borrower acknowledges that Lender shall not at any time or under any
circumstances whatsoever have any duty to Borrower or to any third party to exercise any of
Lender’s rights or remedies hereunder.

          19.4 No Liability of Lender. Neither the acceptance of this Agreement by Lender, nor
the exercise of any rights hereunder by Lender, shall be construed in any way as an assumption by
Lender of any obligations, responsibilities or duties of Borrower arising in connection with the
Inventory Collateral, under the Timeshare Act,

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or under any of the Material Project Agreements, or in connection with any other business of
Borrower or any Material Party, or the Inventory Collateral, or otherwise bind Lender to the
performance of any obligations with respect to the Borrower Project or the Inventory Collateral; it
being expressly understood that Lender shall not be obligated to perform, observe or discharge any
obligation, responsibility, duty, or liability of Borrower or any Material Party with respect to
any of the Inventory Collateral, under the Timeshare Act or under any of the Material Project
Agreements, including, but not limited to, appearing in or defending any action, expending any
money or incurring any expense in connection therewith. Without limitation of the foregoing,
neither this Agreement, any action or actions on the part of Lender taken hereunder, shall
constitute an assumption by Lender of any obligations of Borrower with respect to the Inventory
Collateral, or any documents or instruments executed in connection therewith, and Borrower shall
continue to be liable for all of its obligations thereunder or with respect thereto.

          19.5 Right to Defend Action Affecting Security. Lender may, at Borrower’s expense,
appear in and defend any action or proceeding at law or in equity which Lender in good faith
believes may affect the value of the Inventory Collateral, the Project, the Liens granted under
this Agreement, including without limitation the Liens of Lender’s Mortgage or Lender’s rights
under any of the Loan Documents. Lender may engage counsel of its own choice in any such action or
proceeding without the consent of Borrower and Borrower shall pay all reasonable fees and expenses
of such counsel.

          19.6 Indemnities, Loan Costs and Expenses. All indemnities, Loan Costs and other
expenses payable by Borrower under any provision of this Agreement shall be part of the Obligations
of Borrower and shall be paid by Borrower to Lender, upon demand, and shall bear interest at the
Default Rate for the Inventory Loan from the date of demand until repaid by Borrower.

          19.7 Lender’s Right of Set-Off. Lender shall have the right to set-off any Inventory
Collateral against any Obligations then due and unpaid by Borrower.

          19.8 Assignment of Lender’s Interest. Subject to the provisions of Section 20.18
below, Lender shall have the right to assign, participate or transfer all or any part of the
Inventory Loan and all or any part of its rights in or pursuant to this Agreement or any of the
Loan Documents including, without limitation, to an affiliate of Lender or as part of a
securitization or conduit financing. All assignees, participants and transferees shall be entitled
to the benefits of this Agreement and the Loan Documents. The consent of Borrower shall not be
required for any such assignment, participation or transfer and failure to give notice of any
assignment, participation or transfer shall not affect the validity or enforceability of this
Agreement, any Loan Document, or subject Lender to any liability. Borrower consents to the
dissemination of information regarding the Obligations, the Inventory Loan, Borrower, Borrower’s
business, and all matters related hereto in connection with any assignment, participation or sale.

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          19.9 Lender’s Appointment as Attorney-in-Fact.

          (a) Borrower does hereby irrevocably constitute and appoint Lender and any officer or agent
thereof, with full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of Borrower and in the name of Borrower, or
in its own name to do the following from and after the occurrence and continuance of an Event of
Default from time to time in the Lender’s discretion, for the purpose of carrying out the terms of
this Loan Agreement or the Loan Documents, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to accomplish the
purposes of this Loan Agreement, and, without limiting the generality of the foregoing, Borrower
hereby gives the Lender the power and right, on behalf of Borrower, in Lender’s name or in
Borrower’s name, and at Borrower’s expense to do the following from and after the occurrence and
continuance of an Event of Default:

               (i) in the name of the Borrower or its own name, or otherwise, to take possession of and
endorse and collect any checks, drafts, notes, other Inventory Collateral and to file any claim or
to take any other action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Lender for the purpose of collecting any and all such moneys due with respect to
any other Inventory Collateral whenever payable;

               (ii) to pay or discharge Taxes and Liens levied or placed on or threatened against the
Inventory Collateral or the Borrower Project;

               (iii) (A) to direct any party liable for any payment under any Inventory Collateral to make
payment of any and all moneys due or to become due thereunder directly to the Lender or as the
Lender shall direct; (B) to ask or demand for, collect, receive payment of and receipt for, any and
all moneys, claims and other amounts due or to become due at any time in respect of or arising out
of any Inventory Collateral; (C) to sign and endorse any invoices, assignments, verifications,
notices and other documents in connection with any of the Inventory Collateral; (D) to commence and
prosecute any suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Inventory Collateral or any part thereof and to enforce any other right
in respect of any Inventory Collateral; (E) to defend any suit, action or proceeding brought
against Borrower with respect to any Inventory Collateral; (F) to settle, compromise or adjust any
suit, action or proceeding described in clause (D) above and, in connection therewith, to give such
discharges or releases as the Lender may deem appropriate; and (G) generally, to sell, transfer,
pledge and make any agreement with respect to or otherwise deal with any of the Inventory
Collateral as fully and completely as though the Lender were the absolute owner thereof for all
purposes, and to do, at the Lender’s option and Borrower’s expense, at any time, or from time to
time, all acts and things which the Lender deems necessary to protect, preserve or realize upon the
Inventory Collateral and the Lender’s Liens thereon and to effect the intent of this Loan
Agreement, all as fully and effectively as the Borrower might do;

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               (iv) to demand and receive from time to time any and all property, rights, titles, interests,
and liens hereby sold, assigned and transferred, or intended so to be, and give receipts for same;

               (v) to collect all rent, revenues, and income, pursuant to Lender’s Mortgage; and

               (vi) generally to do all and any such acts and things in relation to the Inventory Collateral
as Lender shall in good faith deem advisable.

     Borrower hereby ratifies all that said attorneys shall lawfully do or cause to be done by
virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable.

          (b) Borrower also authorizes the Lender, at any time and from time to time, to execute, in
connection with the sale provided for herein, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Inventory Collateral.

          (c) The powers conferred on the Lender are solely to protect the Lender’s interests in the
Inventory Collateral and shall not impose any duty upon the Lender to exercise any such powers. The
Lender shall be accountable only for amounts that it actually receives as a result of the exercise
of such powers, and neither the Lender nor any of its officers, directors, or employees shall be
responsible to Borrower for any act or failure to act hereunder, except for its own gross
negligence or willful misconduct.

     20. Miscellaneous.

          20.1 Notices. Except as otherwise specifically set forth in this Agreement or any
other Loan Document, all notices, requests and other communications to either party hereunder shall
be in writing and shall be given to such party at its address set forth below or at such other
address as such party may hereafter specify for the purpose of notice to Lender or Borrower. Each
such notice, request or other communication shall be effective: (a) if given by mail, when such
notice is deposited in the United States Mail with first class postage prepaid, addressed as
aforesaid, provided that such mailing is by registered or certified mail, return receipt requested;
(b) if given by overnight delivery, when deposited with a nationally recognized overnight delivery
service such as Federal Express with all fees and charges prepaid, addressed as provided below; or
(c) if given by any other means, when delivered at the address specified in this Section
20.1.

			
	      If to Borrower:	 	Mystic Dunes Myrtle Beach, LLC

10615 Park Run Drive

Las Vegas, Nevada 89144

Attention: General Counsel

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	      If to Guarantor:	 	Mystic Dunes, LLC

10615 Park Run Drive

Las Vegas, Nevada 89144

Attention: General Counsel

			
	      With a Copy to:	 	Katten Muchin Rosenman LLP

525 West Monroe Street

Chicago, Illinois 60661

Attention: Ann Marie Sink

Facsimile: 312-902-1061

			
	      If to Lender:	 	Textron Financial Corporation

45 Glastonbury Boulevard

Glastonbury, CT 06033

Attn: Kyle Shonak

Facsimile: 860-659-6300

			
	      With a Copy to:	 	

Textron Financial Corporation

45 Glastonbury Boulevard

Glastonbury, CT 06033

Attn: Division President

Facsimile: 860-659-6300

			
	      With a Copy to:	 	

Textron Financial Corporation

40 Westminster Street

Providence, Rhode Island 02903

Attn: Legal Department

Facsimile: 401-621-5040

     Notwithstanding the foregoing, Requests for Advances and documents collateral thereto may be
delivered by Borrower to Lender by e-mail or fax in accordance with Lender’s instructions from time
to time.

          20.2 Survival; Continuation and Reliance. All representations, warranties, covenants
and agreements made by Borrower and Guarantor herein, in any other Loan Documents or in any other
agreement, document, instrument or certificate delivered by or on behalf of Borrower or Guarantor
under or pursuant to the Loan Documents shall be considered to have been relied upon by Lender and
shall survive the delivery to Lender of such Loan Document (and each part thereof), regardless of
any investigation made by or on behalf of Lender. The warranties and representations contained
herein shall be and remain true and correct so long as any of the Obligations have not been
satisfied, or so long as part of the Obligations shall remain outstanding, and each request by
Borrower for an Advance shall constitute an affirmation that the foregoing representations and
warranties remain true and correct as of the date thereof.

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All indemnities made by Borrower are in favor of Lender shall survive payment of all
Obligations and termination of this Agreement as set forth in Section 18.12 above.

          
20.3 Governing Law; Consent to Jurisdiction. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (EXCEPT AS MAY BE EXPRESSLY PROVIDED THEREIN TO THE CONTRARY) SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF RHODE ISLAND, EXCLUSIVE OF ITS CHOICE OF LAWS
PRINCIPLES. BORROWER CONSENTS TO PERSONAL JURISDICTION BEFORE THE SUPERIOR COURT IN AND FOR
PROVIDENCE COUNTY, RHODE ISLAND AND THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE
ISLAND. BORROWER WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO VENUE IN PROVIDENCE
COUNTY, RHODE ISLAND OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE OBLIGATIONS CREATED HEREUNDER OR ANY OF THE LOAN DOCUMENTS AND FURTHER WAIVES ANY
CLAIM THAT PROVIDENCE COUNTY, RHODE ISLAND IS NOT A CONVENIENT FORUM FOR ANY SUCH SUIT, ACTION OR
PROCEEDING. SERVICE OF PROCESS ON BORROWER IN ANY ACTION ARISING OUT OF OR RELATING TO ANY OF THE
LOAN DOCUMENTS SHALL BE EFFECTIVE IF MAILED TO BORROWER AT THE ADDRESS LISTED FOR BORROWER IN
SECTION 20.1.

          20.4 Invalid Provisions. If any provision of this Agreement or any of the other Loan
Documents is held to be illegal, invalid or unenforceable under present or future laws effective
during the term thereof, such provision shall be fully severable, this Agreement and the other Loan
Documents shall be construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof or thereof, and the remaining provisions hereof or thereof shall
remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance therefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision there shall be added automatically as a part of this Agreement and/or the
Loan Documents (as the case may be) a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.

          20.5 Successors and Assigns; Third Party Beneficiaries. This Agreement and the other
Loan Documents shall be binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns; provided that Borrower may not transfer or assign any of its
rights or obligations under this Agreement or the other Loan Documents without the prior written
consent of Lender. This Agreement and the transactions provided for or contemplated hereunder or
under any of the Loan Documents are intended solely for the benefit of the parties hereto and any
of Lender’s participants in the Obligations. No third party shall have any rights or derive any
benefits under or with respect to this Agreement, or the other Loan Documents except for
participants in the Obligations or as provided in advance in a writing signed on behalf of Lender.
No Person other than Borrower, shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to

63

 

assume that Lender will refuse to make advances in the absence of strict compliance with any
or all thereof, and no other Person, other than Borrower, under any circumstance, shall be deemed
to be a beneficiary of such conditions, any and all of which Lender freely may waive in whole or in
part at any time it, in its sole discretion.

          20.6 Counterparts; Effectiveness. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the signature thereto
and hereto were on the same instrument. This Agreement shall become effective upon Lender’s receipt
of one or more counterparts hereof signed by Borrower and Lender. Any signature on any Loan
Document or any document collateral thereto, delivered by Borrower or Guarantor by e-mail or
telecopy transmission shall be deemed to be an original signature thereto. The parties hereto agree
that any copy of this Agreement or any of the Loan Documents signed by any parties thereto and
transmitted by e-mail, telecopy or otherwise for delivery to Lender, shall be admissible in
evidence as the original itself in any judicial, bankruptcy or administrative proceeding, whether
or not the original is in existence.

          20.7 Lender Not Fiduciary. The relationship between Borrower and Lender is solely
that of debtor and creditor, and Lender has no fiduciary or other special relationship with
Borrower or Guarantor, and no term or provision of any of the Loan Documents shall be construed so
as to deem the relationship between Borrower and Lender to be other than that of debtor and
creditor. Nothing herein contained shall be construed to create a partnership or joint venture
between Borrower and Lender, and the parties hereby acknowledge that no such relationship exists
between them.

          20.8 Total Agreement; Amendments. This Agreement, and the other Loan Documents,
including the Exhibits and Schedules thereto, contain the entire agreement between the parties
relating to the subject matter hereof, supersedes all prior agreements and understandings between
the parties hereto whether written or oral relating to the subject matter hereof, cannot be
contradicted, changed or terminated orally or by course of conduct. This Agreement may not be
amended or modified, except by written instrument signed by Borrower and Lender. No provision of
this Agreement shall be deemed to be waived by Lender, except for those waived in a writing signed
by Lender.

          20.9 Consents, Approvals and Discretion. Whenever Lender’s consent or approval is
required or permitted, or any documents or other items are required to be acceptable to Lender,
such consent, approval or determination of acceptability must be in writing and shall be at the
sole and absolute discretion of Lender and may be subject to such conditions as Lender may require
at its sole and absolute discretion, unless otherwise expressly provided hereunder or under the
other Loan Documents. Whenever any determination or act is at Lender’s discretion, such
determination or act shall be at Lender’s sole and absolute discretion.

          20.10
Litigation.
 TO THE FULLEST EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT
BE WAIVED, BORROWER, GUARANTOR AND LENDER HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND

64

 

IRREVOCABLY WAIVE ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE
OR DEFEND OR CLARIFY ANY RIGHT, POWER, REMEDY OR DEFENSE ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN, WHETHER
SOUNDING IN TORT OR CONTRACT OR OTHERWISE, OR WITH RESPECT TO ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY; AND AGREE THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A JUDGE AND NOT BEFORE A JURY. BORROWER, GUARANTOR AND
LENDER FURTHER WAIVE ANY RIGHT TO SEEK TO CONSOLIDATE ANY SUCH LITIGATION IN WHICH A JURY TRIAL HAS
BEEN WAIVED WITH ANY OTHER LITIGATION IN WHICH A JURY TRIAL CANNOT OR HAS NOT BEEN WAIVED. FURTHER,
BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF LENDER, NOR LENDER’S COUNSEL, HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LENDER WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK
TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. BORROWER AND GUARANTOR ACKNOWLEDGE THAT
THE PROVISIONS OF THIS SECTION ARE A MATERIAL INDUCEMENT TO LENDER’S ACCEPTANCE OF THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS.

     The waiver and stipulations of Borrower and Lender in this Section 20.10 shall survive
the final payment or performance of all of the Obligations of Borrower and all other obligations
secured by the Inventory Collateral and the resulting termination of this Agreement.

          20.11 Consent to Advertising and Publicity of Documents. Borrower agrees that Lender
and its participants (with Lender’s prior written approval) may issue and disseminate to the public
information describing the credit accommodation entered into pursuant to this Agreement, including
the names and addresses of Borrower and any subsidiaries, the amount, maturity, collateral, and a
general description of Borrower’s business.

          20.12 Use of Lender’s Name. Without the prior written consent of Lender, Borrower
shall not, and shall not permit any Affiliate of any Borrower to use the name of Lender or the name
of any affiliate of Lender in connection with its businesses or activities, except in connection
with internal business matters and as required in dealings with governmental agencies or in
disclosures required by governmental agencies.

          20.13 Control of a Material Party. Lender agrees that Borrower shall only be
obligated to act on behalf of a Material Party or to cause a Material Party to take any action,
refrain from taking any action or comply with any provision or covenant set forth in this Agreement
or any other Loan Document at such time as such Material Party is an Affiliate of Borrower or
Guarantor, or such Material Party is directly or indirectly under the control of Borrower or
Guarantor.

65

 

          20.14 Directly or Indirectly. Where any provision in this Agreement refers to action
to be taken by any Person, or which such Person is prohibited from taking, such provisions shall be
applicable whether such action is taken directly or indirectly by such Person.

          20.15 No Duty. All attorneys, accountants, appraisers, consultants, custodians and
other professionals retained by Lender shall have the right to act exclusively in the interest of
Lender and shall have no duty of disclosure, duty of loyalty, duty of care or other duty or
obligation of any type of nature whatsoever to Borrower, Guarantor or any other Person.

          20.16 Reimbursement for Taxes. Borrower will promptly, upon written demand of Lender,
reimburse Lender for any Taxes assessed against Lender by the state in which the Inventory
Collateral is located or any subdivision thereof (with the exception of income taxes payable by
Lender) which is on account of or measured by the interest income received by Lender or in any way
imposed upon Lender in connection with the transactions contemplated hereunder, including, without
limitation, any general intangible tax or documentary tax.

          20.17 Investigations and Inquiries. Borrower hereby authorizes Lender to conduct all
such investigations and inquiries as to credit, operations, Borrower, any Affiliate of Borrower,
the Borrower Project and the Inventory Collateral as shall be necessary or desirable, in Lender’s
sole discretion, in connection with its monitoring of the Inventory Loan. By this authorization,
individuals of whom Lender may make any such inquiry are empowered to cooperate with and supply all
requested information and documentation to Lender.

          20.18 Sale of Participation Interests in Inventory Loan. Borrower acknowledges that
Lender may seek to sell participation interests in the Inventory Loan to one or more participants
and Borrower agrees to cooperate fully with Lender in facilitating such process and hereby consents
to any dissemination of information and providing documentation in connection therewith. Borrower
shall be required to transact business solely with Lender and shall not be required to deal with
participants directly.

          20.19 No Third Party Beneficiaries. Lender’s inspection, review or approval of
matters pertaining to the Borrower Project and Inventory Collateral has no purpose other than to
determine investment quality from Lender’s point of view and is not done for the benefit of anyone
other than Lender. Any “approval” by Lender or any of its agents with respect to any plan or
specification or any resulting structure or improvement means only that Lender find the same
unobjectionable for investment purposes, and no such approval or consent by Lender or authorization
to proceed shall imply or be construed as any representation that any such plans or specifications
are suitable for any particular purpose, or that the resulting structure or improvement or any
materials incorporated therein are safe or suitable for any particular purpose or have any
particular value or actually cost the amount reputedly paid therefor. Under no circumstances shall
any Person whomsoever (other than the parties to this Agreement and their respective permitted
successors and assigns) be deemed a beneficiary of the

66

 

terms, conditions, covenants and agreements contained in this Agreement or any other Loan
Documents.

          20.20 Non-Public Information; Confidentiality.

          (a) Lender acknowledges and agrees that it may receive material non-public information
hereunder and under the other Loan Documents concerning the Borrower and its Affiliates and agrees
to use such information in compliance with all applicable requirements of law (including United
States Federal and state securities laws and regulation).

          (b) Lender agrees to use all reasonable efforts to maintain the confidentiality of information
obtained by it pursuant to any Loan Document and designated in writing by Borrower or any of its
Affiliate(s), as the case may be, as confidential, except that such information may be disclosed
(i) with such Person’s consent, (ii) to the extent such information presently is or hereafter
becomes (A) publicly available other than as a result of a breach of this Section 20.20 or
(B) available to Lender from a source (other than Borrower or any of its Affiliates) not known by
them to be subject to disclosure restrictions, (iii) to the extent disclosure is required by
applicable requirements of law or other legal process or requested or demanded by any governmental
authority, and (iv) to current or prospective assignees or participants, in each case to the extent
such assignees or participants agree to be bound by provisions substantially similar to the
provisions of this Section 20.20.

          20.21 Headings. Section headings have been inserted in this Agreement as a matter of
convenience of reference only; such Section headings are not a part of this Agreement and shall not
be used in the interpretation of this Agreement.

          20.22 Borrower’s Knowledge. As used herein the term “to Borrower’s actual knowledge”
or “to Borrower’s knowledge” is intended to mean to the actual knowledge of employees, officers,
contractors or in-house attorneys of Borrower, Guarantor or of DRC or any subsidiaries or DRC
Affiliates and its outside law firms and attorneys who have been involved with or undertaken due
diligence in connection with the Bankruptcy Case or Plan.

          20.23 Gender. Words of any gender in this Agreement shall include each other gender
where appropriate.

          20.24 Time of the Essence. Time is of the essence of all obligations and agreements
of Borrower and Guarantor.

          20.25 Conflict. The provisions of this Agreement shall control in the event of any
conflict among it, and any other Loan Document.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

67

 

     IN WITNESS WHEREOF, Borrower, Guarantor and Lender have caused this Agreement to be duly
executed and delivered effective as of the date first above written.

	 	 	 	 	 
	 	LENDER:

TEXTRON FINANCIAL CORPORATION,  
a Delaware corporation

 	 
	 	By:  	/s/ Michael J. LeClair
 	 
	 	Name:  Michael J. LeClair 	 
	 	Title:  VP Loan Servicing 	 
	 
	 	BORROWER:

MYSTIC DUNES MYRTLE BEACH, LLC, a Delaware limited liability company

 	 
	 	By:  	/s/ Yanna Huang
 	 
	 	Name:  Yanna Huang 	 
	 	Title:  Treasurer 	 
	 
	 	GUARANTOR:

MYSTIC DUNES, LLC, a Delaware limited liability company

 	 
	 	By:  	/s/ Yanna Huang
 	 
	 	Name:  Yanna Huang 	 
	 	Title:  Treasurer 	 
	 

Signature Page to Amended and Restated Inventory Loan and Security Agreement

 

 

Schedules

	 	 	 

	Schedule 12.2

	 	Affiliates and Capital Structure
	Schedule 12.3

	 	Names and Addresses
	Schedule 12.7

	 	Permitted Exceptions to Title
	Schedule 12.10

	 	Litigation Proceedings, Etc.
	Schedule 13.8

	 	Personal Property Leases
	Schedule 13.10

	 	Material Project Agreements
	Schedule 13.20

	 	Leases, Licenses or Occupancy Agreements

Exhibits

	 	 	 

	Exhibit A

	 	Legal Description of Property on which the Borrower Project is
located
	Exhibit B

	 	Mortgagee’s Title Insurance Commitment
	Exhibit C

	 	Form of Request for Inventory Loan Advance
	Exhibit D

	 	Form of Public Offering Statement
	Exhibit E

	 	Form of Compliance Certificate
	Exhibit F

	 	Form of Reassignment
	Exhibit G

	 	Form of Partial Release for Inventory

 

 

SCHEDULE 12.2

Affiliates and Capital Structure

 

 

Schedule 12.3

	 	 	 

	 

	 	Names and Addresses
	 
	 	 
	Address of Borrower:

	 	Mystic Dunes Myrtle Beach, LLC
	 

	 	c/o Diamond Resorts Corporation
	 

	 	10615 Park Run Drive
	 

	 	Las Vegas, Nevada 89144
	 
	 	 
	Address of Inventory Collateral:

	 	Mystic Dunes Myrtle Beach, LLC
	 

	 	5200 N. Ocean Blvd.
	 

	 	Myrtle Beach, South Carolina 29577
	 
	 	 
	Address of Books and Records:

	 	Mystic Dunes Myrtle Beach, LLC
	 

	 	c/o Diamond Resorts Corporation
	 

	 	10615 Park Run Drive
	 

	 	Las Vegas, Nevada 89144

 

 

Schedule 12.7 

Permitted Exceptions to Title

	1.	 	Taxes and assessments for the year 2011 and subsequent years, not yet due and payable.
	 
	2.	 	Easements, rights and agreements concerning cable communications facilities set forth in
that certain Communications Easement given by Dunes Village Properties LLC to
Time Warner Entertainment-Advance/Newhouse Partnership, dated Nov. 29, 2005, recorded
Jan. 4, 2006 in Deed Book 3030 at page 835, records of Horry County.
	 
	3.	 	Terms and conditions of that certain Pool and Amenity Easement Grant (to Dunes Village),
dated Sept. 20, 2006 and recorded Sept. 20, 2006 in Deed Book 3160 at page 648, records of
Horry County.
	 
	4.	 	Terms and conditions of that certain Pool and Amenity Easement Grant (to Pan American), dated
Sept. 20, 2006 and recorded Sept. 20, 2006 in Deed Book 3160 at page 657, records of Horry
County.
	 
	5.	 	All of the grants, terms, conditions and obligations set forth in that certain Condominium
and Parking and Amenity Easement Grant with Unilateral Right to Relocate given by S.A.B.
Properties, LLC to Pan American Properties, LLC, dated Sept. 20, 2006 and recorded Sept. 20,
2006 in Deed Book 3160 at page 618, records of Horry County (the “Easement Grant”).
	 
	6.	 	That certain survey entitled “Compiled Map of 2.4 +/– Acre Tract of Land located northeast of
52nd Avenue North in the Dunes Section of Myrtle Beach” prepared by Robert L.
Bellamy & Associates for Dunes Village, Inc., dated Oct. 1, 1987 and recorded in Plat Book 98
at page 108, and that certain survey entitled “Recombination Subdivision Map” prepared for Pan
American Properties, LLC and S.A.B. Properties, LLC by Huntley and Associates, Inc., dated
December 29, 2005 and recorded in Plat Book 212 at page 18 reveals that a portion of the
property subject to the Easement Grant is within the bounds of Deep Head Swash Lake.
	 
	7.	 	Any portion of the Property subject to the Easement Grant that is below the highwater mark of
Deep Head Swash Lake.
	 
	8.	 	Rights, including, without limitation, riparian rights, of the State of South Carolina, the
City of Myrtle Beach, the public, or any others to any portion of the premises subject to the
Easement Grant that is below the mean high water level of Deep Head Swash Lake.
	 
	9.	 	That certain Recombination Subdivision Map, dated Aug. 15, 2006, prepared by Huntley &
Associates, Inc. for Pan American Properties LLC

 

 

	 	 	and S.A.B. Properties LLC, recorded Aug. 31, 2006 in Plat Book 216 at page 193, records of
Horry County, South Carolina, demonstrates the existence of the following: (a) A portion of the
property that is subject to the Easement Grant is within the bounds of Deep Head Swash Lake;
(b) A portion of the property that is subject to the Easement Grant (shown and described as a
portion of Tract B-I-formerly a portion of Horry County Tax Map No. 174-06-18-009) has been
subdivided and recombined with the parcel shown and described as Tract B (Horry County Tax Map
No. 174-06-18-006); (c) A chain link fence located in the northwest corner of a portion of the
property subject to the Easement Grant; and (d) The foundation of a multi-story parking garage
that is located upon a portion of the property that is subject to the Easement Grant.
	 
	10.	 	That certain as-built survey, dated Aug. 4, 2006, prepared by Huntley & Associates Inc. for Pan
American Properties LLC recorded Sept. 19, 2006 in Plat Book 217 at page 46, records of Horry
County, South Carolina, demonstrates the existence of the following: (a) A portion of the
property that is subject to the Easement Grant is within the bounds of Deep Head Swash Lake;
(b) A chain link fence located in the northwest corner of a portion of the property subject
to the Easement Grant; and (d) The foundation of a multi-story parking garage that is located
upon a portion of the property that is subject to the Easement Grant.
	 
	11.	 	That certain Storm Water Management, Right of Way and Utility Easement granted by
Pan American Properties LLC and S.A.B. Properties LLC to the City of Myrtle Beach by
instrument dated Sept 28, 2007 and recorded Oct. 9, 2007 in Deed Book 3283 at page 120,
records of Horry County and as shown on that certain Easement Survey prepared by Huntley &
Associates, Inc. for the City of Myrtle Beach, recorded Oct. 9, 2007 in Plat Book 230 at page
308, records of Horry County.
	 
	12.	 	That certain Perpetual Signage and Utilities Easement granted by S.A.B. Properties LLC to
Dunes Village Property Owners Association Inc. by instrument dated Oct. 4, 2007 and recorded
Oct 5, 2007 in Deed Book 3282 at page 1717, records of Horry County and as shown on that
certain Signage Easement Survey prepared by Huntley & Associates Inc. for S.A.B. Properties,
LLC recorded Oct. 5, 2007 in Plat Book 230 at page 295, records of Horry County.
	 
	13.	 	Matters and things disclosed upon that certain as-built survey prepared by Huntley &
Associates, Inc. for Dunes Village Properties, LLC on the Dunes Sections Lots 1, 2, 3 and 4 of
Block 25, recorded Oct. 16, 2007 in Plat Book 231 at page 24, records of Horry County.
	 
	14.	 	All of the terms, provisions, conditions, rights, privileges, restrictions, assessments,
obligations, easements and liens set forth in the Master Deed for Dunes Village Property
Regime creating the condominium

 

 

	 	 	estate, recorded on Oct. 16, 2007 in Deed Book 3284 at page 2688, as amended that certain First
Amendment recorded in Deed Book 3307 at page 392 and by that certain Second Amendment recorded
June 23, 2008 in Deed Book 3344 at page 2790, records of Horry County, and as may thereafter be
further modified and/or amended.
	 
	15.	 	Covenants, conditions, restrictions, reservations, easements, liens for assessments,
options, powers of attorney and limitations set forth in the Declaration of Fractional
Vacation Ownership Plan for Dunes Village Resort, recorded January 15, 2009, in the Office of
the Register of Deeds for Horry County in Deed Book 3382, at Page 1465, re-recorded on January
21, 2009, and First Amendment recorded in Deed Book 3435 at page 17; in the related by-laws;
in any instrument creating the estate or interest in the Property; and in any other related
instrument referred to in any of the instruments aforesaid.
	 
	16.	 	Limitations and conditions set out and imposed in the Horizontal Property Act, Chapter 31,
Code of Laws of South Carolina, 1976, as amended.
	 
	17.	 	Matters of Title to the Land located between the highwater mark of the Atlantic Ocean and the
boundary line of the Property.
	 
	18.	 	Any right, Title or interest of anyone whomever in any of the Property below the mean high
water mark or below the spring tide flood water boundary, marsh (whether salt or fresh),
lagoon, man-made canal, swamp areas, or any tidal area below the mean high water mark, or the
spring tide flood water boundary, or to any such areas as may be claimed by or over which
jurisdiction is asserted by any local, state or national governmental entity or
quasi-governmental entity. The Company does not insure riparian rights, nor does it insure
Title to the portion of the Land which lies below the mean high water mark of rivers, creeks
or ocean, nor Title to any portion of the Land that may be accreted as defined in the Coastal
Tidelands and Wetlands Act, Section 48-39-10 et seq. of the South Carolina Code of Laws, 1976,
as amended.
	 
	19.	 	Facilities Use Agreement by and between Dunes Village Property Owners Association, Inc. and
Backstage Myrtle Beach, LLC recorded June 23, 2008 in Deed Book 3344 at Page 2833, records of
Horry County.
	 
	20.	 	Limited Assignment of Grantor’s Rights filed June 23, 3008 in Deed Book 3344 at Page 2820,
records of Horry County.

 

 

Schedule 12.10

Litigation Proceedings

None.

 

 

Schedule 13.8 

Personal Property Leases

     1. Equipment Lease Agreement between Tempus Resorts International and Zeno Office
Solutions, dated May 30, 2008.

 

 

Schedule 13.10 

Material Project Agreements

     1. Master Deed for Dunes Village Property Regime creating the condominium estate, recorded on
Oct. 16, 2007 in Deed Book 3284 at page 2688, as amended by Second Amendment recorded June 23, 2008
in Deed Book 3344 at page 2790, records of Horry County.

     2. Declaration of Fractional Vacation Ownership Plan for Dunes Village Resort, recorded
January 15, 2009, in the Office of the Register of Deeds for Horry County in Deed Book 3382, at
Page 1465, re-recorded on January 21, 2009, and First Amendment recorded in Deed Book 3435 at page
17.

     3. Bylaws of Dunes Village Vacation Owners Association, Inc. adopted October 8, 2009.

     4. Fractional Management Contract between Dunes Village Vacation Owners Association, Inc.
and Tempus Resort Management, Ltd., dated January 16, 2009.

     5. Management Subcontract between Tempus Resorts Management Ltd. and Pan American Vacations
Management, LLC, dated June 20, 2008.

     6. Limited License Agreement between Backstage Myrtle Beach, LLC and Pan American
Vacations Management, LLC, dated June 20, 2008.

Material Vendor Contracts

     7. AON Risk Services Inc. — Insurance

     8. Cigna — Health and dental insurance

     9. John Hancock USA — 401(k) contributions

 

 

Schedule 13.20

Leases, Licenses or Occupancy Agreements

     1. Limited License Agreement between Backstage Myrtle Beach, LLC and Pan American
Vacations Management, LLC, dated June 20, 2008.

 

 

Exhibit A

 Legal Description of Borrower Project

ALL AND SINGULAR, those certain condominium units listed below, being Units of Dunes Village
Horizontal Property Regime, a condominium established pursuant to the South Carolina Horizontal
Property Act, Title 27, Chapter 31, Code of Laws of South Carolina (2005), as amended, and
submitted by Master Deed for Dunes Village Horizontal Property Regime, dated October 10, 2007,
recorded October 16, 2007 in Deed Book 3284 at page 2688, records of Horry County, South
Carolina, and all Exhibits and amendments thereto, referenced to which is craved as forming a
part and parcel of these presents.

	 	 	 	 	 	 	 
	UNIT	 	TMS NO.	 	UNIT	 	TMS NO.
	PH-34
	 	174-10-02-270	 	256	 	174-10-02-049
	PH-37
	 	174-10-02-273	 	356	 	174-10-02-070
	PH-45
	 	174-10-02-194	 	437	 	174-10-02-078
	PH-53
	 	174-10-02-277	 	655	 	174-10-02-150
	PH-55
	 	174-10-02-279	 	656	 	174-10-02-151
	PH-57
	 	174-10-02-281	 	657	 	174-10-02-152
	153
	 	174-10-02-027	 	755	 	174-10-02-177
	154
	 	174-10-02-028	 	953	 	174-10-02-217
	157
	 	174-10-02-031	 	1055	 	174-10-02-234
	254
	 	174-10-02-047	 	1135	 	174-10-02-241

These being the identical property conveyed to Backstage Myrtle Beach, LLC, a Florida limited
liability company, by deed of Dunes Village Properties, LLC filed June 23, 2008 in Deed Book 3344
at page 2809, records of Horry County.

A-1

 

Exhibit B

Mortgagee’s Title Insurance Commitment

[See attached]

B-1

 

FATIC-210X

ALTA Commitment (6-17-06)

First American Title Insurance Company

SCHEDULE A

First
American Title Insurance Company

1 First American Way

Santa Ana, California 92707

Issuing Office File No.: dunes village/diamond/t-s

	1.	 	Commitment Date: April 25, 2011 @ 8:00:00 AM
	 
	2.	 	Policy or Policies to be issued:

	 	 	 

	 þ (a) Owner’s Policy ALTA Owner’s Policy (6-17-2006)

	 	Amount of Insurance: $0.00
	               Proposed Insured:
	 	 
	               Mystic Dunes Myrtle Beach, LLC
	 	 
	 
	 	 
	 þ (b) Loan Policy ALTA Loan Policy (6-17-2006)

	 	Amount of Insurance: $0.00
	Proposed Insured:
	 	 
	               Textron Financial Corp., a Delaware corporation, its successors and/or assigns as their interests may
appear
	 
	 	 
	 o (c) Other Policy

	 	Amount of Insurance:
	               Proposed Insured:
	 	 

	3.	 	Fee Simple interest in the Land described in this Commitment is owned, at the
Commitment Date, by:

Backstage Myrtle Beach, LLC

	4.	 	The land referred to in this Commitment is
described as follows:
 See Attached Exhibit “A” for Legal Description

	 	 	 	 	 
	Issue Date: June 10, 2011 	RESORT TITLE COMPANY INC.

 	 
	 	By:  	 	 
	 	 	ALAN D. CLEMMONS 	 
	 	 	 	 
	 

	 	 	THIS COMMITMENT IS FURNISHED BY FIRST AMERICAN TITLE INSURANCE COMPANY OR ITS POLICY ISSUING
AGENT SOLELY FOR THE ISSUANCE OF A POLICY OR POLICIES OF TITLE INSURANCE OF FIRST AMERICAN TITLE
INSURANCE COMPANY. THIS COMMITMENT IS NOT AN ABSTRACT OR AN OPINION OF TITLE. LIABILITY UNDER
THIS COMMITMENT IS DEFINED BY AND LIMITED TO THE TERMS AND CONDITIONS OF THIS COMMITMENT AND THE
TITLE INSURANCE POLICY TO BE ISSUED. PERSONS AND ENTITIES NOT LISTED ABOVE AS PROPOSED INSUREDS
ARE NOT ENTITLED TO RELY UPON THIS COMMITMENT FOR ANY PURPOSE.

 

 

First American Title Insurance Company

EXHIBIT A

Issuing Office File No.: dunes village/diamond/t-s

LEGAL DESCRIPTION:

ALL AND SINGULAR, those certain undivided one-one hundred fourth (1/104) interests in Units listed
on Exhibit A-1, in Dunes Village Horizontal Property Regime, established pursuant to the South
Carolina Horizontal Property Act, Title 27, Chapter 31, Code of Laws of South Carolina, 1976 (Supp.
2006), and Vacation and Timesharing Plans, Chapter 32, Title 27, Code of Laws of South Carolina,
1976 (Supp. 2006), and submitted by Master Deed for Dunes Village Horizontal Property Regime, dated
October 10, 2007 and recorded October 16, 2007 in Deed Book 3284 at page 2688, records of Horry
County, South Carolina (the “Master Deed”), and the Declaration of Fractional Ownership Plan for
Dunes Village Resort, dated December 30, 2008 and recorded January 15, 2009 in Deed Book 3382 at
page 1465, and re-recorded January 21, 2009 in Deed Book 3383 at page 203, records of Horry County,
South Carolina, and all exhibits and amendments thereto, reference to which is craved as forming a
part and parcel of these presents.

 

 

FATIC-211X

ALTA Commitment (6-17-06)

First American Title Insurance Company

SCHEDULE B — SECTION I

REQUIREMENTS

Issuing Office File No.: dunes village/diamond/t-s

The following requirements must be met:

	1.	 	Pay the agreed amounts for the interest in the land and/or the mortgage to be insured.
	 
	2.	 	Pay us the premiums, fees and charges for the policy.
	 
	3.	 	Pay all taxes and /or assessments, levied and assessed against the land, which are due and
payable.
	 
	4.	 	You must tell us in writing the name of anyone not referred to in this Commitment who will
get an interest in the
land or who will make a loan on the land. We may then make additional requirements or
exceptions.
	 
	5.	 	Documents, satisfactory to us, creating the interest in the land and/or the mortgage to be
insured, must be signed,
delivered and recorded:
	 
	 	 	a) Warranty Deed from Backstage Myrtle Beach, LLC to Mystic Dunes Myrtle Beach, LLC
conveying the
Land described under Schedule A herein.
	 
	 	 	b) Mortgage from Mystic Dunes Myrtle Beach, LLC to Textron Financial Corp., a Delaware
corporation, in
the amount of $4,000,000.00, secured by the Land described in Schedule A herein.
	 
	6.	 	We must be furnished with a copy of SCID 3601 executed pursuant to Section 38-75-960
S.C. Code of Laws
1976, as amended, and an executed Notice of Availability of Title Insurance Pursuant to
S.C. Insurance
Department regulation R-69-18, Vol. 25A of S.C. Code of Laws 1976, as amended.
	 
	7.	 	Seller’s/Owner’s Affidavit Indemnity executed by current owner(s) of the land on a form to be
supplied by the
Company stating that there have been no improvements to the land within the past 90 days which
could give rise
to a construction lien and that there are no accounts or claims pending and unpaid which could
constitute a lien
against the land. The affidavit will also state that affiant has no knowledge of any natural
person or legal entity
who has or could have a claim of right, interest or lien adverse to the Insured.
	 
	8.	 	Receipt of the acknowledged First American Title Insurance Company Privacy Policy.
	 
	9.	 	Satisfaction of Mortgage from Backstage Myrtle Beach, LLC to Textron Financial Corp.
dated 11/7/2008,
recorded 11/7/2008, in the Office of the Register of Deeds for Horry County in Mortgage Book
5124, Page
827.
	 
	10.	 	Termination of UCC-1 Financing Statement naming Textron Financial Corp., as secured party,
and
Backstage Myrtle Beach, LLC, as debtor, recorded in the Office of the Register of Deeds for
Horry County
in Mortgage Book 5124, Page 843.
	 
	11.	 	Comply with the requirements of that certain Order Approving Debtors’ Amended Disclosure
Statement
and Confirming Debtors’ Amended Plan of Reorganization entered in the case styled In re: Tempus
Resorts
International, Ltd., et al., Case No. 6:10-bk-20709-KSJ, United States Bankruptcy Court, Middle
District of
Florida, Orlando Division.
	 
	12.	 	The actual value of the estate or interest to be Insured must be disclosed to the
Company and, subject to
approval by the Company, entered as the amount of the Policy to be issued. Until the
amount of the policy to be issued shall be determined and entered as aforesaid, it is agreed
by and between the Company, the

 

 

First American Title Insurance Company

CONTINUATION OF SCHEDULE B — SECTION I

REQUIREMENTS

Issuing Office File No.: dunes village/diamond/t-s

	12.	 	applicant for this Commitment, and every person relying on this Commitment, that the
Company cannot be
required to approve any such evaluation in excess of $1,000, and the total liability of the
Company on
account of this Commitment shall not exceed said amount.
	 
	13.	 	We must be furnished with a stamped copy of the Articles of Organization as filed with the
Secretary of
State indicating formation of the limited liability company prior to the taking of Title by the
limited liability
company.
	 
	 	 	NOTE: The Lender’s Policy when issued will contain the following ALTA endorsements: 4, 8.1, 9

 

 

FATIC-212X

ALTA Commitment (6-17-06)

First American Title Insurance Company
SCHEDULE B —
SECTION II

EXCEPTIONS

Agent’s File No.: dunes village/diamond/t-s

Any policy we issue will have the following exceptions unless they are taken care of to our
satisfaction.

	1.	 	(a) Taxes or assessments that are not shown as existing liens by the records of any
taxing authority that levies
taxes or assessments on real property or by the Public Records; (b) proceedings by a public
agency that may
result in taxes or assessments, or notices of such proceedings, whether or not shown by the
records of such
agency or by the Public Records.
	 
	2.	 	Any facts, rights, interests, or claims that are not shown by the Public Records but that
could be ascertained by an
inspection of the Land or that may be asserted by persons in possession in the Land.
	 
	3.	 	Easements, liens or encumbrances, or claims thereof, not shown by the Public Records.
	 
	4.	 	Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the
Title that would be
disclosed by an accurate and complete land survey of the Land and not shown by the Public
Records.
	 
	5.	 	Any mineral or mineral rights leased, granted or retained by current or
prior owners.

NOTE: Exceptions Numbered 1-5 above will be hereby deleted upon issuance of the
Loan Policy Only.

	6.	 	Taxes and assessments for the year 2011 and subsequent years, not yet due and payable.
	 
	 	 	NOTE: EXCEPTIONS NUMBERED 1-5 ABOVE ARE HEREBY DELETED.
	 
	7.	 	Easements, rights and agreements concerning cable communications facilities set forth in that
certain
Communications Easement given by Dunes Village Properties LLC to Time Warner
Entertainment-Advance/Newhouse Partnership, dated Nov. 29, 2005, recorded Jan. 4, 2006 in Deed
Book
3030 at page 835, records of Horry County.
	 
	8.	 	Terms and conditions of that certain Pool and Amenity Easement Grant (to Dunes Village),
dated Sept. 20,
2006 and recorded Sept. 20, 2006 in Deed Book 3160 at page 648, records of Horry County.
	 
	9.	 	Terms and conditions of that certain Pool and Amenity Easement Grant (to Pan American), dated
Sept. 20,
2006 and recorded Sept. 20, 2006 in Deed Book 3160 at page 657, records of Horry County.
	 
	10.	 	All of the grants, terms, conditions and obligations set forth in that certain Condominium
Parking and
Amenity Easement Grant with Unilateral Right to Relocate given by S.A.B. Properties, LLC to Pan
American Properties, LLC, dated Sept. 20, 2006 and recorded Sept. 20, 2006 in Deed Book 3160 at
page 618,
records of Horry County (the “Easement Grant”).
	 
	11.	 	That certain survey entitled “Compiled Map of 2.4 +/- Acre Tract of Land located northeast of
52nd
Avenue North in the Dunes Section of Myrtle Beach” prepared by Robert L. Bellamy & Associates
for
Dunes Village, Inc., dated Oct. 1, 1987 and recorded in Plat Book 98 at page 108, and that
certain survey
entitled “Recombination Subdivision Map” prepared for Pan American Properties, LLC and S.A.B.
Properties, LLC by Huntley and Associates, Inc., dated December 29, 2005 and recorded in Plat
Book 212 at

 

 

First American Title Insurance Company

CONTINUATION OF SCHEDULE B — SECTION II

EXCEPTIONS

Agent’s
File No.: dunes village/diamond/t-s

	11.	 	page 18 reveals that a portion of the property subject to the Easement Grant is within
the bounds of Deep
Head Swash Lake.
	 
	12.	 	This policy does not insure any portion of the property subject to the Easement Grant
that is below the
highwater mark of Deep Head Swash Lake.
	 
	13.	 	Rights, including, without limitation, riparian rights, of the State of South Carolina, the
City of Myrtle
Beach, the public, or any others to any portion of the premises subject to the Easement Grant
that is below
the mean high water level of Deep Head Swash Lake.
	 
	14.	 	That certain Recombination Subdivision Map, dated Aug. 15, 2006, prepared by Huntley &
Associates, Inc.
for Pan American Properties LLC and S.A.B. Properties LLC, recorded Aug. 31, 2006 in Plat Book
216 at
page 193, records of Horry County, South Carolina, demonstrates the existence of the following:
(a) A
portion of the property that is subject to the Easement Grant is within the bounds of Deep Head
Swash
Lake; (b) A portion of the property that is subject to the Easement Grant (shown and described
as a portion
of Tract B-1-formerly a portion of Horry County Tax Map No. 174-06-18-009) has been subdivided
and
recombined with the parcel shown and described as Tract B (Horry County Tax Map No.
174-06-18-006);
(c) A chain link fence located in the northwest corner of a portion of the property subject to
the Easement
Grant; and (d) The foundation of a multi-story parking garage that is located upon a portion of
the
property that is subject to the Easement Grant.
	 
	15.	 	That certain as-built survey, dated Aug. 4, 2006, prepared by Huntley & Associates Inc. for
Pan American
Properties LLC recorded Sept. 19, 2006 in Plat Book 217 at page 46, records of Horry County,
South
Carolina, demonstrates the existence of the following: (a) A portion of the property that is
subject to the
Easement Grant is within the bounds of Deep Head Swash Lake; (b) A chain link fence located in
the
northwest corner of a portion of the property subject to the Easement Grant; and (d) The
foundation of a
multi-story parking garage that is located upon a portion of the property that is subject to
the Easement
Grant.
	 
	16.	 	That certain Storm Water Management, Right of Way and Utility Easement granted by Pan
American
Properties LLC and S.A.B. Properties LLC to the City of Myrtle Beach by instrument dated Sept.
28, 2007
and recorded Oct. 9, 2007 in Deed Book 3283 at page 120, records of Horry County and as shown
on that
certain Easement Survey prepared by Huntley & Associates, Inc. for the City of Myrtle Beach,
recorded
Oct. 9, 2007 in Plat Book 230 at page 308, records of Horry County.
	 
	17.	 	That certain Perpetual Signage and Utilities Easement granted by S.A.B. Properties LLC to
Dunes Village
Property Owners Association Inc. by instrument dated Oct. 4, 2007 and recorded Oct. 5, 2007 in
Deed Book
3282 at page 1717, records of Horry County and as shown on that certain Signage Easement Survey
prepared by Huntley & Associates Inc. for S.A.B. Properties, LLC recorded Oct. 5, 2007 in Plat
Book 230 at
page 295, records of Horry County.
	 
	18.	 	Matters and things disclosed upon that certain as-built survey prepared by Huntley &
Associates, Inc. for
Dunes Village Properties, LLC on the Dunes Sections Lots 1, 2, 3 and 4 of Block 25, recorded
Oct. 16, 2007
in Plat Book 231 at page 24, records of Horry County.
	 
	19.	 	All of the terms, provisions, conditions, rights, privileges, restrictions, assessments,
obligations, easements

 

 

First American Title Insurance Company

CONTINUATION OF SCHEDULE B — SECTION II

EXCEPTIONS

Agent’s File No.: dunes village/diamond/t-s

	19.	 	and liens set forth in the Master Deed for Dunes Village Property Regime creating the
condominium estate
hereby Insured, recorded on Oct. 16, 2007 in Deed Book 3284 at page 2688, as may thereafter
further
modified and/or amended (First Amendment recorded in Deed Book 3307 at page 392; Second
Amendment
recorded in Deed Book 3344 at page 2790), records of Horry County.
	 
	20.	 	Covenants, conditions, restrictions, reservations, easements, liens for assessments, options,
powers of
attorney and limitations set forth in the Declaration of Fractional Vacation Ownership Plan for
Dunes
Village Resort, recorded January 15, 2009, in the Office of the Register of Deeds for Horry
County in Deed
Book 3382, at Page 1465, re-recorded on January 21, 2009 in Deed Book 3383 at page 203, and
First
Amendment recorded in Deed Book 3435 at page 17; in the related by-laws; in any instrument
creating the
estate or interest Insured by this policy; and in any other related instrument referred to in
any of the
instruments aforesaid.
	 
	21.	 	Limitations and conditions set out and imposed in the Horizontal Property Act, Chapter 31,
Code of Laws
of South Carolina, 1976, as amended.
	 
	22.	 	This policy does not insure matters of Title to the Land located between the highwater mark
of the Atlantic
Ocean and the boundary line of the Insured premises.
	 
	23.	 	Any right, Title or interest of anyone whomever in any of the Land below the mean high water
mark or
below the spring tide flood water boundary, marsh (whether salt or fresh), lagoon, man-made
canal, swamp
areas, or any tidal area below the mean high water mark, or the spring tide flood water
boundary, or to any
such areas as may be claimed by or over which jurisdiction is asserted by any local, state or
national
governmental entity or quasi-governmental entity. The Company does not insure riparian rights,
nor does it
insure Title to the portion of the Land which lies below the mean high water mark of rivers,
creeks or
ocean, nor Title to any portion of the Land that may be accreted as defined in the Coastal
Tidelands and
Wetlands Act, Section 48-39-10 et seq. of the South Carolina Code of Laws, 1976, as amended.
	 
	24.	 	Facilities Use Agreement by and between Dunes Village Property Owners Association, Inc. and
Backstage
Myrtle Beach, LLC recorded June 23, 2008 in Deed Book 3344 at page 2833, records of Horry
County.
	 
	25.	 	Limited Assignment of Grantor’s Rights filed June 23, 2008 in Deed Book 3344 at page 2820,
records of
Horry County.

 

 

Exhibit C 

Form of Request for Inventory Loan Advance

BORROWER’S CERTIFICATE 

AND REQUEST FOR ADVANCE ON INVENTORY LOAN

                                                            , 200_

Textron Financial Corporation

13701 West Jewell Avenue – Suite 200

Lakewood, Colorado 80228

			
	     RE:	 	Amended and Restated Inventory Loan any Security Agreement between Textron
Financial Corporation (“Lender”) and Mystic Dunes
Myrtle Beach, LLC (“Borrower”),
dated as of June      , 2011 (as amended, supplemented or restated from time to
time, the “Loan Agreement”)

Ladies and Gentlemen:

     In accordance with the terms of advance Loan Agreement, Borrower desires to
obtain the advance (the “Advance”) of 

$                                         of the principal balance on the
Inventory Loan on
                                        ,                     . Unless otherwise defined herein, terms
used herein with initial capital letters shall have the same meaning assigned to such terms in the
Loan Agreement.

     In order to induce Lender to make such Advance, Borrower hereby certifies, represents and
warrants the following to Lender:

     No Default or Event of Default has occurred under the Loan Agreement and no Default or Event
of Default will occur under the Loan Agreement as a result of the Advance requested herein.

     All of Borrower’s representations and warranties under the Loan Agreement and the other Loan
Documents, including, without limitation, all representations and warranties ensuring compliance
with all environmental laws, rules and regulations, are true and correct as of the date hereof,
and after giving effect to the making of such requested Advance, will be true and correct as of
the date on which such Advance is made.

     There is no material litigation (except as disclosed in the Loan Agreement and except as fully
disclosed to Lender in writing) either pending or threatened against Borrower, the Borrower Project
or the Inventory Collateral. Neither Borrower nor the Borrower Project, nor the operations,
marketing or sales conducted with respect to the Borrower Project, are under any material
investigation with respect to any declaration, timeshare act, environmental law, rule or
regulation, or any other legal requirements, and Borrower has not received notification of, nor is
Borrower aware of, any violations of

C-1

 

the declaration, any environmental law, rule or regulation, any timeshare act, or any other legal
requirements relating to the Borrower Project, marketing or sales activities or the Inventory
Collateral.

     Borrower is in compliance with each and every one of its covenants, agreements and
obligations under the Loan Agreement and the other Loan Documents.

     Borrower has no defenses to or offsets against the payment of all amounts due to Lender under
or in connection with the Inventory Loan, or defenses against the performance of all of Borrower’s
Obligations under the Loan Agreement and all of the other Loan Documents.

     The applicable conditions to the making of an Advance set forth in the Loan Agreement have
been satisfied as of the date hereof.

     The chief executive office of Borrower, and all its books and records, are located at Mystic
Dunes Myrtle Beach, LLC, c/o Diamond Resorts Corporation, 10615 Park Run Drive, Las Vegas, Nevada
89144.

     The Inventory Collateral is free and clear of all Liens and other encumbrances, except for
any Permitted Exceptions described in the Loan Agreement and the Lien of Lender granted pursuant
to the Loan Documents.

     At all times prior to and as of the date hereof, and after giving effect to the transactions
contemplated under the Loan Agreement, including without limitation, the borrowing of the
Inventory Loan, the granting of liens to Lender in all of the Inventory Collateral, and the
incurring of the Obligations, the total fair value of the Borrower’s properties exceeds the total
amount of its debts, and the Borrower is able to pay and is paying its debts as they become due.

     Borrower hereby requests an Advance in the amount set forth above be made only upon
confirmation by Lender of satisfaction, with respect to the initial Advance, of all conditions to
the closing, and with respect to all Advances, to the making of such Advance.

The requested Advance should be made in care of

Bank Name:                                                                 

Bank Address:                                                             

ABA No.:                                                                     

Account No.:                                                                

     Borrower acknowledges that interest will accrue on the Advance at the rate set forth in the
Loan Agreement from the date of the making of such Advance by Lender.

     The information set forth herein is true, correct and complete, and Borrower acknowledges
that, in connection with making an Advance under the Inventory Loan, Lender is relying on the
information contained herein (including the exhibits hereto) and

C-2

 

certified, both on behalf of the Borrower and by the undersigned, individually, as being true,
correct and complete.

[Signature page follows]

C-3

 

	 	 	 	 	 	 	 

	 	 	BORROWER:	 	 
	 
	 	 	 	 	 	 
	 	 	MYSTIC DUNES MYRTLE BEACH, LLC, a

Delaware limited liability company.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

C-4

 

Exhibit D 

Form of Public Offering Statement

[Amended S.C. Public Offering Statement to be provided post closing]

[Existing S.C. Public Offering Statement in Files]

D-1

 

Exhibit E 

 Form of Compliance Certificate

Testing Date:                                                             

COMPLIANCE CERTIFICATE

     In
accordance with Section 15.4 of the Amended and Restated Inventory Loan
and Security Agreement dated as of June                     , 2011 by and between MYSTIC DUNES
MYRTLE BEACH, LLC, a Delaware limited liability company (“Borrower”) and TEXTRON FINANCIAL
CORPORATION (“Lender”) (as it may be amended, modified, supplemented or restated, from time to
time, the “Loan Agreement”), the undersigned hereby certifies to Lender that as of the Testing
Date described above:

	 	1.	 	The undersigned is the (*the undersigned is the                     
 of Borrower.*) of Borrower.
	 
	 	2.	 	The undersigned has reviewed the relevant terms of the Loan Agreement (and all
other Loan Documents to which Borrower is a party or by which Borrower is bound) and has
made, or caused to be made, under his/her supervision, a review of the transactions and
conditions of Borrower from the beginning of the period covered by the Financial
Statements or reports being delivered herewith to the date of this Compliance
Certificate and that such review has not disclosed the existence during such period of
any condition or event which constitutes a Default or Event of Default.

     Capitalized
terms shall have the meanings set forth therefor in the Loan Agreement. The
certifications in this Compliance Certificate are made by the
undersigned, in his capacity as the
      of Borrower, from the undersigned’s own
personal knowledge, after due inquiry and with full knowledge that Lender will rely upon this
Compliance Certificate. The undersigned has executed and delivered this Compliance Certificate as
an inducement for Lender to continue to extend the Inventory Loan to Borrower pursuant to the Loan
Agreement.

	 	 	 	 	 	 	 

	 	 	BORROWER:	 	 
	 
	 	 	 	 	 	 
	 	 	MYSTIC DUNES MYRTLE BEACH, LLC,

a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Print Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 

Dated:

E-1

 

The undersigned Guarantor concurs with the conclusions described in Section 2 above and executes
and delivers this concurrence as inducement for Lender to continue to extend the Inventory Loan to
Borrower pursuant to the Loan Agreement.

	 	 	 	 	 	 	 

	 	 	GUARANTOR:	 	 
	 
	 	 	 	 	 	 
	 	 	MYSTIC DUNES, LLC, a Delaware limited

liability company,	 	 
	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Print Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 

Dated:

E-2

 

Exhibit F

Form of Reassignment 

Drawn by and Return to:

Mystic Dunes Myrtle Beach, LLC

c/o Diamond Resorts Corporation

10615 Park Run Drive

Las Vegas, Nevada 89144

Attention: Chief Legal Officer

STATE OF SOUTH CAROLINA

COUNTY OF HORRY

REASSIGNMENT
OF OWNED NOTE(S) RECEIVABLE 

AND INTERVAL MORTGAGE(S)

     KNOW ALL MEN BY THESE PRESENTS that in consideration of Ten Dollars (10.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
undersigned, TEXTRON BUSINESS SERVICES, INC., whose address is 45 Glastonbury Blvd., Glastonbury,
Connecticut 06033-4450, (“Lender”) hereby assigns to
MYSTIC DUNES MYRTLE BEACH, LLC, a
Delaware limited liability company, whose address is c/o Diamond Resorts Corporation, 10615 Park
Run Drive, Las Vegas, Nevada 89144, without recourse, representation or warranty of any kind other
than to the extent set forth in the Loan Agreement defined below, all of the undersigned’s right,
title and interest as seller under those certain hereinafter described mortgage(s) (“Interval
Mortgage(s)”) and all powers, covenants and provisions therein contained, together with the
promissory note(s) executed in connection with such Interval
Mortgage(s) (“Owned Note(s)”), all
other documents and instruments executed in connection with such Interval Mortgage(s) and Owned
Note(s), all monies due and to become due on account of such Interval Mortgage(s) and Owned Note(s)
and all rights accrued or to accrue under such Interval Mortgage(s), Owned Note(s) and other
documents and instruments.

     Description of Interval Mortgages and related Owned Notes Receivable assigned hereby:

[See Exhibit B attached hereto and incorporated herein by this reference.]

     The Interval Mortgage(s) constitutes a lien on the property and time sharing interest(s) in
the unit(s) as described therein, located within that resort commonly known as Dunes Village
located at 5200 North Ocean Boulevard, Myrtle Beach, Horry County, South Carolina, and more fully
described on the attached Exhibit A.

F-1

 

     This Reassignment has been made and delivered pursuant to the provisions of
an Amended and Restated Inventory Loan and Security Agreement dated June                     ,
2011 among the undersigned and Lender, as it may from time to time be
amended (the “Loan Agreement”). In no event shall this Reassignment constitute a release of the lien created by the
individual obligors under the Interval Mortgages described herein.

     IN WITNESS WHEREOF, the undersigned has executed this Reassignment under seal as of the above
written date.

	 	 	 	 	 	 	 

	Signed, sealed and delivered in the
presence of the following witnesses:	 	TEXTRON BUSINESS SERVICES, INC.,

a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 
	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	Signature of Witness

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

Printed Name of Witness

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

Signature of Witness

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

Printed Name of Witness

	 	 	 	 	 	 

STATE OF

COUNTY OF

     The foregoing instrument was acknowledged before me this                      day of
                                        , 2011, by                                         , the                                          of Textron
Business Services, Inc., a Delaware corporation, on behalf of corporation.

	 	 	 	 	 

	 

	 	 

Notary Public for the State of                     
	 	 
	 
	 	 	 	 
	My Commission Expires:                                                             
	 	 	 	 

F-2

 

EXHIBIT A

Legal Description

ALL AND SINGULAR, those certain condominium units listed below, being Units of Dunes Village
Horizontal Property Regime, a condominium established pursuant to the South Carolina Horizontal
Property Act, Title 27, Chapter 31, Code of Laws of South Carolina (2005), as amended, and
submitted by Master Deed for Dunes Village Horizontal Property Regime, dated October 10, 2007,
recorded October 16, 2007 in Deed Book 3284 at page 2688, records of Horry County, South Carolina,
and all Exhibits and amendments thereto, referenced to which is craved as forming a part and
parcel of these presents.

	 	 	 	 	 	 	 
	UNIT	 	TMS NO.	 	UNIT	 	TMS NO.
	PH-34
	 	174-10-02-270	 	256	 	174-10-02-049
	PH-37
	 	174-10-02-273	 	356	 	174-10-02-070
	PH-45
	 	174-10-02-194	 	437	 	174-10-02-078
	PH-53
	 	174-10-02-277	 	655	 	174-10-02-150
	PH-55
	 	174-10-02-279	 	656	 	174-10-02-151
	PH-57
	 	174-10-02-281	 	657	 	174-10-02-152
	153
	 	174-10-02-027	 	755	 	174-10-02-177
	154
	 	174-10-02-028	 	953	 	174-10-02-217
	157
	 	174-10-02-031	 	1055	 	174-10-02-234
	254
	 	174-10-02-047	 	1135	 	174-10-02-241

These being the identical property conveyed to Backstage Myrtle Beach, LLC, a Florida limited
liability company, by deed of Dunes Village Properties, LLC filed June 23, 2008 in Deed Book 3344
at page 2809, records of Horry County.

F-3

 

EXHIBIT B

Interval
Mortgage(s)

(TO BE ATTACHED)

F-4

 

Exhibit G

Form of Release for Inventory

	 	 	 	 	 

	STATE OF SOUTH CAROLINA
	 	)	 	 
	 
	 	)	 	PARTIAL RELEASE
	COUNTY OF HORRY
	 	)	 	 

     KNOW ALL MEN BY THESE PRESENTS, that TEXTRON FINANCIAL CORPORATION (“Bank”), for
valuable consideration to it in hand paid, receipt of which is hereby acknowledged,
hereby remises, releases and forever discharges the property described on Exhibit A
attached hereto and incorporated herein by reference, together with all purchase
agreements and documents related to the sale of timeshare interests in such property
described on Exhibit A, from the lien, operation and effect of that certain MORTGAGE,
SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT from MYSTIC
DUNES MYRTLE BEACH, LLC, to TEXTRON FINANCIAL CORPORATION, dated
June 30, 2011 and recorded in Deed
      Book at Page
     , records of Horry
County, South Carolina as amended from time to time (the “Mortgage”):

     PROVIDED, however, that the security of said Bank, as set forth in the Mortgage be
preserved and protected in all respects except as to the property described on Exhibit A
hereto, and that the operation, effect and lien of the Mortgage, except as is hereby
remised, released and discharged, shall remain in full force and effect.

     IN WITNESS WHEREOF, TEXTRON FINANCIAL CORPORATION has caused these presents
to be executed in its name and its seal to be affixed by its duly
authorized officer, this       day
                                        ,
20     .

	 	 	 	 	 	 	 	 	 

	SIGNED, SEALED AND DELIVERED 

IN THE PRESENCE OF:	 	TEXTRON FINANCIAL CORPORATION, a

Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Witness
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
Its: (title)

	 	 
	 

Witness

	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 

	STATE OF

	 	 	)	 	 	 
	 

	 	 	)	 	 	ACKNOWLEDGEMENT
	COUNTY OF

	 	 	)	 	 	 

     The
foregoing instrument was acknowledged before me this
      day of
                                        ,
20                    , by
                                        , (title)/Authorized Officer of Textron Financial Corporation, a Delaware
corporation, on behalf of said corporation.

                                                                     
           
(L.S.)

Notary for                                         

My Commission Expires:                                                             

[SEAL]

G-1exv10w2

Exhibit 10.2

LOAN AND SECURITY AGREEMENT

between

RESORT FINANCE AMERICA, LLC,

a Delaware limited liability company

(“Lender”)

and

MYSTIC DUNES RECEIVABLES, LLC,

a Delaware limited liability company

(“Borrower”)

$74,517,139.00

Receivables Loan

June 30, 2011

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	Section 1.1 Certain Defined Terms
	 	 	2	 
	Section 1.2 Other Definitional Provisions
	 	 	19	 
	 
	 	 	 	 
	ARTICLE II THE LOAN
	 	 	19	 
	 
	 	 	 	 
	Section 2.1 The Loan
	 	 	19	 
	Section 2.2 Use of Proceeds
	 	 	20	 
	Section 2.3 Evidence of Indebtedness; Note
	 	 	20	 
	Section 2.4 Interest
	 	 	20	 
	Section 2.5 Interest Rate Limitation
	 	 	21	 
	Section 2.6 Payment of Principal, Interest and Fees
	 	 	21	 
	Section 2.7 Optional Prepayments
	 	 	24	 
	Section 2.8 Late Charge
	 	 	24	 
	Section 2.9 Payments
	 	 	24	 
	Section 2.10 Release Fees for Defaulted Timeshare Loans
	 	 	25	 
	Section 2.11 Custodial Fee
	 	 	25	 
	Section 2.12 Servicing Fee
	 	 	25	 
	Section 2.13 Backup Servicing Fee
	 	 	25	 
	Section 2.14 Borrower’s Unconditional Obligation to Make Payments
	 	 	25	 
	Section 2.15 True-Up of Effective Date Payments
	 	 	26	 
	 
	 	 	 	 
	ARTICLE III SECURITY
	 	 	26	 
	 
	 	 	 	 
	Section 3.1 Grant of Security Interest in Collateral
	 	 	26	 
	Section 3.2 Maintenance of Borrowing Base
	 	 	27	 
	Section 3.3 Reassignment of Timeshare Loans
	 	 	27	 
	Section 3.4 Collections
	 	 	28	 
	Section 3.5 Servicing of Timeshare Loans
	 	 	28	 
	Section 3.6 Reconciliation Between Collections and Servicing Reports
	 	 	28	 
	Section 3.7 Replacement of Agents
	 	 	28	 
	Section 3.8 Maintenance of Security
	 	 	28	 
	Section 3.9 Permitted Contests
	 	 	29	 
	Section 3.10 Liability of Guarantor
	 	 	29	 
	 
	 	 	 	 
	ARTICLE IV CLOSING
	 	 	29	 
	 
	 	 	 	 
	Section 4.1 Closing Conditions
	 	 	29	 
	 
	 	 	 	 
	ARTICLE V BORROWER’S REPRESENTATIONS AND WARRANTIES
	 	 	33	 
	 
	 	 	 	 
	Section 5.1 Consideration
	 	 	33	 
	Section 5.2 Organization
	 	 	33	 

i

 

	 	 	 	 	 
	 	 	Page	 
	Section 5.3 Authorization
	 	 	33	 
	Section 5.4 Governmental Consents
	 	 	34	 
	Section 5.5 Validity
	 	 	34	 
	Section 5.6 Financial Position
	 	 	34	 
	Section 5.7 Governmental Regulations
	 	 	34	 
	Section 5.8 Employee Benefit Plans
	 	 	35	 
	Section 5.9 Securities Activities
	 	 	35	 
	Section 5.10 No Material Adverse Change
	 	 	35	 
	Section 5.11 No Default
	 	 	35	 
	Section 5.12 Payment of Taxes
	 	 	35	 
	Section 5.13 Litigation
	 	 	35	 
	Section 5.14 Ownership of Property; Liens
	 	 	36	 
	Section 5.15 Subsidiaries; Equity Interests; Loan Party Information
	 	 	36	 
	Section 5.16 No Burdensome Restrictions
	 	 	36	 
	Section 5.17 Full Disclosure
	 	 	36	 
	Section 5.18 Compliance with Laws and Regulations
	 	 	37	 
	Section 5.19 Solvency
	 	 	37	 
	Section 5.20 Timeshare Interests
	 	 	37	 
	Section 5.21 Affiliate Debt
	 	 	37	 
	Section 5.22 Security Documents
	 	 	37	 
	Section 5.23 Special Purpose Entity
	 	 	37	 
	Section 5.24 Embargoed Persons
	 	 	38	 
	Section 5.25 Survival and Additional Representations and Warranties
	 	 	38	 
	 
	 	 	 	 
	ARTICLE VI BORROWER’S COVENANTS
	 	 	38	 
	 
	 	 	 	 
	Section 6.1 Consideration
	 	 	38	 
	Section 6.2 Reporting Requirements
	 	 	38	 
	Section 6.3 Borrower’s Operations and Management
	 	 	40	 
	Section 6.4 Modifications
	 	 	42	 
	Section 6.5 No Transfers
	 	 	43	 
	Section 6.6 Preservation of Security Interests
	 	 	43	 
	Section 6.7 Special Purpose Entity
	 	 	43	 
	Section 6.8 Prohibition of Fundamental Changes; Sale of Assets, etc.
	 	 	43	 
	Section 6.9 Distributions; Restricted Payments
	 	 	43	 
	Section 6.10 Liens
	 	 	44	 
	Section 6.11 Indebtedness; Guarantees
	 	 	44	 
	Section 6.12 Accounts
	 	 	44	 
	Section 6.13 Further Assurances
	 	 	44	 
	Section 6.14 Covenants Not Exclusive
	 	 	44	 
	 
	 	 	 	 
	ARTICLE VII DEFAULT
	 	 	44	 
	 
	 	 	 	 
	Section 7.1 Events of Default
	 	 	44	 
	Section 7.2 Remedies
	 	 	46	 
	Section 7.3 Application of Proceeds During an Event of Default
	 	 	48	 
	Section 7.4 Uniform Commercial Code Remedies; Sale; Assembly of Collateral
	 	 	48	 

ii

 

	 	 	 	 	 
	 	 	Page	 
	Section 7.5 Application of UCC Sale Proceeds
	 	 	48	 
	Section 7.6 Authorization to Apply Assets to Payment of Loan
	 	 	49	 
	Section 7.7 Lender’s Right to Perform
	 	 	49	 
	Section 7.8 Waiver of Marshalling
	 	 	49	 
	 
	 	 	 	 
	ARTICLE VIII MISCELLANEOUS
	 	 	49	 
	 
	 	 	 	 
	Section 8.1 Successors and Assigns; Limited Assignment by Borrower or by Lender
	 	 	49	 
	Section 8.2 Notices
	 	 	50	 
	Section 8.3 Borrower’s Representative
	 	 	51	 
	Section 8.4 Amendments, Changes, Waivers, Discharge and Modifications in Writing
	 	 	52	 
	Section 8.5 No Waiver; Remedies Cumulative
	 	 	52	 
	Section 8.6 Costs, Expenses and Taxes
	 	 	52	 
	Section 8.7 Disclaimer by Lender; No Joint Venture
	 	 	53	 
	Section 8.8 Indemnification
	 	 	54	 
	Section 8.9 Third-Party Fees
	 	 	54	 
	Section 8.10 Titles and Headings
	 	 	54	 
	Section 8.11 Counterparts
	 	 	55	 
	Section 8.12 Lender’s Rights with Respect to Loan
	 	 	55	 
	Section 8.13 Recourse Obligations
	 	 	55	 
	Section 8.14 Confidentiality
	 	 	55	 
	Section 8.15 Time is of the Essence
	 	 	56	 
	Section 8.16 No Third Parties Benefited
	 	 	56	 
	Section 8.17 Severability
	 	 	56	 
	Section 8.18 FORUM SELECTION; JURISDICTION; CHOICE OF LAW
	 	 	56	 
	Section 8.19 WAIVER OF JURY TRIAL
	 	 	57	 
	Section 8.20 Interpretation
	 	 	58	 
	Section 8.21 Destruction of Note
	 	 	58	 
	Section 8.22 No Relationship With Obligors
	 	 	58	 
	Section 8.23 Entire Agreement
	 	 	58	 
	Section 8.24 Reliance
	 	 	58	 
	 
	 	 	 	 
	EXHIBIT A RECEIVABLES RE-ASSIGNMENT
	 	 	A-1	 
	EXHIBIT B FORM OF ENDORSEMENT
	 	 	B-1	 
	EXHIBIT C FORM OF ASSIGNMENT
	 	 	C-1	 
	SCHEDULE 1 TIMESHARE LOANS AND TIMESHARE INTERESTS
	 	 	1-1	 
	SCHEDULE 5.13 LITIGATION SCHEDULE
	 	 	5.13-1	 
	SCHEDULE 5.15 GUARANTOR SUBSIDIARIES
	 	 	5.16-1	 

iii

 

LOAN AND SECURITY AGREEMENT

     THIS LOAN AND SECURITY AGREEMENT (this “Loan Agreement”) is made as of June 30, 2011 by and
between MYSTIC DUNES RECEIVABLES, LLC, a Delaware limited liability company (“Borrower”), and
RESORT FINANCE AMERICA, LLC, a Delaware limited liability company (the “Lender”).

RECITALS:

     A. On November 19, 2010, Tempus Resorts International Ltd. (“Tempus”) and the other Debtors
(as defined herein) filed voluntary petitions in the Bankruptcy Court (as defined herein) for
relief under Chapter 11 of the Bankruptcy Code (as defined herein) and commenced the Chapter 11
Cases (as defined herein).

     B. Tempus and the other Debtors shall emerge from bankruptcy on the Effective Date (as defined
herein) when the Plan of Reorganization (as defined herein), which was confirmed by the Bankruptcy
Court on May 6, 2011, is consummated.

     C. Tempus Palms International, Ltd., a Florida limited partnership (“Tempus Palms”) and Resort
Finance America, LLC, a Delaware limited liability company (as assignee of GMAC Commercial Finance,
LLC, and in such capacity, the “Prepetition Lender”) are parties to a Loan and Security Agreement,
dated as of October 28, 2004 (as amended, modified or supplemented from time to time (including,
without limitation, pursuant to that certain Agreement, dated as of January 8, 2010, by and among
Tempus, Tempus Palms, Tempus Golf Development, LLC, a Delaware limited liability company (“Tempus
Golf”) and Prepetition Lender), the “Prepetition Loan Agreement”), pursuant to which the
Prepetition Lender agreed, subject to the terms and conditions therein contained, to make available
to Tempus Palms certain revolving pre-sale and receivables loans as provided for therein.

     D. Pursuant to the Plan of Reorganization: (i) Tempus is being reorganized into a new entity,
Mystic Dunes, LLC, a Delaware limited liability company (“Mystic Dunes”), (ii) all legal and
beneficial ownership interests in, to and under the Timeshare Loans (as defined herein) and all
related Collateral (as defined herein) are being transferred and assigned by Mystic Dunes to
Borrower, free and clear of all liens (other than the liens created hereunder in favor of Lender),
in consideration of the assumption by Borrower of Tempus Palms’ obligations under the Prepetition
Loan Agreement, (iii) the Prepetition Lender is receiving a payment in full of all amounts due
under the AD&C Loan Agreement (as defined herein), (iv) the Prepetition Lender is receiving the
Effective Date Prepayment (as defined herein) on the Effective Date, and (v) the Prepetition Lender
is receiving, among other things, interests in a term loan facility in the aggregate principal
amount equal to the outstanding balance of all principal, interest, fees and other amounts owed by
Tempus Palms to Prepetition Lender under the Prepetition Loan Agreement as of the Effective Date
less the Effective Date Prepayment (which amount shall constitute the Loan Amount hereunder), on
the terms and subject to the conditions set forth herein.

1

 

AGREEMENT:

     NOW, THEREFORE, in consideration of the covenants and conditions herein contained, the parties
agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Certain Defined Terms

     As used herein (including any Exhibits attached hereto), the following terms shall have the
meanings set forth below (unless expressly stated to the contrary):

     “AD&C Loan Agreement” means the AD&C Loan Agreement, dated as of October 28, 2004, between
Tempus Palms and Prepetition Lender, as amended, modified or supplemented from time to time
(including, without limitation, pursuant to that certain Agreement, dated as of January 8, 2010, by
and among Tempus, Tempus Palms, Tempus Golf and Prepetition Lender).

     “Affiliate” means a Person that, directly or indirectly, controls, is controlled by, or is
under common control with, a referenced Person.

     “Agents” mean the Servicing Agent, the Backup Servicing Agent and the Custodial Agent.

     “Articles of Organization” means, as applicable, the charter, articles, operating agreement,
joint venture agreement, partnership agreement, by-laws and any other written documents evidencing
the formation, organization, governance and continuing existence of an entity.

     “Assignment” means a written assignment of specific Timeshare Loans and their proceeds,
executed by Borrower substantially in the form and substance of Exhibit C attached to this
Loan Agreement.

     “Available Collateral Proceeds” means, with respect to any Payment Date, all Collateral
Proceeds that have been received by Lender (whether from Servicing Agent or otherwise) during the
calendar month immediately preceding the calendar month in which such Payment Date occurs;
provided, that on the final Payment Date hereunder, Available Collateral Proceeds shall
include all Collateral Proceeds received by Lender and not yet distributed in accordance with
Section 2.6(a).

     “Backup Servicing Agent” means Wells Fargo Bank, National Association, as backup servicing
agent under the Backup Servicing Agreement, or its successor in such capacity.

     “Backup Servicing Agreement” means the agreement dated as of the date hereof, among Lender,
Borrower and Backup Servicing Agent, which provides for Backup Servicing Agent to perform for the
benefit of Lender certain backup accounting, reporting and other servicing

2

 

functions with respect to the Collateral, as it may be from time to time renewed, amended,
restated or replaced.

     “Bankruptcy Action” shall mean with respect to any Person (a) such Person filing a voluntary
petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law to
have such Person be adjudicated bankrupt or insolvent; (b) the filing of an involuntary petition
against such Person under the Bankruptcy Code or any other Federal or state bankruptcy or
insolvency law, or soliciting or causing to be solicited petitioning creditors for any involuntary
petition against such Person; (c) such Person filing an answer consenting to or otherwise
acquiescing in or joining in any involuntary petition filed against it, by any other Person under
the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or soliciting or
causing to be solicited petitioning creditors for any involuntary petition from any Person; (d)
such Person consenting to or acquiescing in or joining in an application for the appointment of a
custodian, receiver, trustee, liquidator, assignee, sequestrator, examiner or any similar official
of or for such Person or any portion of its property; or (e) such Person making an assignment for
the benefit of creditors, or admitting, in writing or in any legal proceeding, its insolvency or
inability to pay its debts generally as they become due, or taking any action in furtherance of the
foregoing.

     “Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now or
hereafter in effect, or any successor thereto.

     “Bankruptcy Court” means the United States Bankruptcy Court for the Middle District of
Florida.

     “Borrower” means Mystic Dunes Receivables, LLC, a Delaware limited liability company.

     “Borrowing Base” with respect to an Eligible Timeshare Loan assigned to Lender, an amount
equal to 85% of the unpaid principal balance of such Eligible Timeshare Loan.

     “Borrowing Base Shortfall” means, at any time, the amount by which the unpaid principal
balance of the Loan exceeds the aggregate Borrowing Base.

     “Business Day” means any day other than Saturday, Sunday, or a day on which national banks are
legally closed for business in the State of New York.

     “Change of Control” means Diamond Resorts Holdings, LLC’s failure to own, directly or
indirectly, at least 51% of all the voting and economic interests in Guarantor and Borrower.

     “Chapter 11 Cases” means the cases commenced under Chapter 11 of the Bankruptcy Code by Tempus
and its Affiliates in the Bankruptcy Court, which are jointly administered under Case Number
6:10-bk-20709-KSJ.

     “Collateral” means all of the Borrower’s right, title and interest in and to the following
whether now owned or hereafter acquired and any and all benefits accruing to the Borrower from (i)
the Timeshare Loans, (ii) the Receivables in respect of each Timeshare Loan, (iii) the related
Timeshare Loan Documents, (iv) all Related Security in respect of each Timeshare Loan, (v) all

3

 

rights and remedies under the Custodial Agreement, (vi) all amounts in or to be deposited to
the Interim Lockbox Account, the Interim Collection Account, the Lockbox Account (to the extent
allocable to Lender in accordance with the Intercreditor Agreement) and the Collection Account, and
(vii) 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). Notwithstanding the foregoing, the Collateral shall not include
any Timeshare Loan hereafter released from Lender’s lien in accordance with the terms hereof,
together with any Related Security, Timeshare Loan Files, income or proceeds related to such
released Timeshare Loan.

     “Collateral Proceeds” means all proceeds of the Collateral, including, without limitation, all
Receivables and other payments collected under the Timeshare Loans, whether in respect of
principal, interest, fees (including Customer Service Fees) or other amounts, which constitute part
of the Collateral.

     “Collection Account” means the segregated bank account required to be opened and maintained by
Lender in accordance with the provisions of the Servicing Agreement.

     “Custodial Agent” means Wells Fargo Bank Minnesota National Association, a national banking
association, as the Custodial Agent, or its successor as Custodial Agent under the Custodial
Agreement.

     “Custodial Agreement” means the Custodial Agreement dated as of October 28, 2004, among Lender
(as successor by assignment from Prepetition Lender, itself successor by assignment from GMAC
Commercial Finance LLC, itself successor by assignment from Residential Funding Corporation),
Borrower (as successor by assignment from Prepetition Borrower) and Custodial Agent, which provides
for Custodial Agent to hold the Collateral, to the extent necessary to perfect Lender’s security
interest in such Collateral, as a bailee, on behalf of Lender, as it may be from time to time
renewed, amended, restated or replaced.

     “Custodial Fee” means a fee to be paid for the services provided by Custodial Agent in
accordance with the Custodial Agreement.

     “Customer Service Fee” means any customer charge, processing fee, credit card fee, late
payment fee, modification fee, documentation fee or other amount not in the nature of principal or
interest paid by or on behalf of an Obligor in connection with the servicing, administration or
collection of such Obligor’s Timeshare Loan.

     “Debt” means, for Borrower or Guarantor, without duplication, the sum of the following:

     (1) indebtedness for borrowed money,

     (2) obligations evidenced by bonds, debentures, notes or other similar instruments,

4

 

     (3) obligations to pay the deferred purchase price of property or services to the
extent deferred more than 30 days,

     (4) obligations as lessee under leases which have been or should be, in accordance with
GAAP, recorded as capital leases,

     (5) obligations of such Person to purchase securities (or other property) which arise
out of or in connection with the sale of the same or substantially similar securities or
property,

     (6) obligations of such Person to reimburse any bank or other Person in respect of
amounts actually paid under a letter of credit or similar instrument,

     (7) indebtedness or obligations of others secured by a lien on any asset of such
Person, whether or not such indebtedness or obligations are assumed by such Person (to the
extent of the value of the asset),

     (8) obligations under direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a
creditor against loss in respect of, indebtedness or obligations of others of the kinds
referred to in clauses (1) through (7) above, and

     (9) liabilities in respect of unfunded vested benefits under plans covered by Title IV
of ERISA.

     “Debtors” means Tempus, Tempus Palms, Tempus Golf, Tempus Select, LLC, Backstage Myrtle Beach,
LLC, Tempus Resorts Management, Ltd., Tempus Resorts Realty, LLC, Tempus International Marketing
Enterprises, Ltd., and Time Retail, LLC.

     “Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship,
bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership,
insolvency, reorganization, or similar debtor relief laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors generally.

     “Default Rate” means a rate per annum equal to (i) the Interest Rate plus (ii) 3.00%.

     “Defaulted Timeshare Loan” means (i) any Initial Defaulted Timeshare Loan and (ii) any
Timeshare Loan with respect to which any payment installment becomes more than 180 days
contractually past due after the Effective Date.

     “Diamond Participant” means Tempus Acquisition, LLC, a Delaware limited liability company, as
participant under the Diamond Participation.

     “Diamond Participation” means the Participation Agreement, dated as of the Effective Date,
between Lender and Diamond Participant.

5

 

     “DIP Credit Agreement” means the Post-Petition Term Credit and Security Agreement dated
November 23, 2010, by and between TAC and the Debtors, as amended from time to time.

     “Effective Date” means the “Effective Date” as defined in the Plan of Reorganization.

     “Effective Date Prepayment” means an amount equal to the Borrowing Base Shortfall calculated
as of the Effective Date.

     “Eligible Timeshare Loan” means, initially, the Timeshare Loans pledged to the Lender
hereunder (which Timeshare Loans are identified on Schedule 1 attached hereto) other than
Timeshare Loans for which any installment due with respect to such Timeshare Loan has become more
than 60 days contractually past due, measured as of the last day of the calendar month immediately
preceding the month in which the Effective Date occurs. A Timeshare Loan that has qualified as an
Eligible Timeshare Loan shall cease to be an Eligible Timeshare Loan upon the date (or, to the
extent the following occurred on or prior to the Effective Date, upon and as of the Effective Date)
that any installment due with respect to such Timeshare Loan becomes more than 60 days
contractually past due, measured as of the last day of each calendar month. In addition (but
subject to the restrictions set forth in Section 6.4), a Timeshare Loan that has qualified
as an Eligible Timeshare Loan and that has been amended or modified in any respect after the
Petition Date, shall cease to be an Eligible Timeshare Loan from and as of the date of such
amendment or modification until the Maturity Date, if such amendment or modification (x) extends
the maturity date of such Timeshare Loan and such extension causes any installment with respect to
such Timeshare Loan that was more than 60 days contractually past due to be less than 61 days
contractually past due, (y) modifies in any respect (including, without limitation, by reduction,
forbearance, deferral or forgiveness of any principal amount thereof), without regard to whether
any installment with respect to such Timeshare Loan that was more than 60 days contractually past
due at the time of such modification, or (z) is otherwise prohibited by Section 6.4 hereof.

     “Embargoed Person” has the meaning set forth in Section 5.24 hereof.

     “Event of Default” means the occurrence, after any applicable grace or cure period, of any of
the events listed in Section 7.1.

     “Existing Servicer” means Tempus Resorts International, Ltd., a Florida corporation.

     “Force Majeure Event” means fire, flood, labor dispute, terrorist event, weather-related
event, governmental action or other cause beyond the reasonable control of Borrower.

     “GAAP” means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as may be approved by a significant segment of the
accounting profession prevalent in the United States of America.

     “Guarantor” means, jointly and severally, each of Mystic Dunes, LLC, a Delaware limited
liability company, and Tempus Acquisition, LLC, a Delaware limited liability company.

6

 

     “Guaranty” means a primary, joint and several guaranty and subordination agreement dated as of
the date hereof made by Guarantor with respect to all or any part of Borrower’s obligations under
the Loan Documents, as it may be from time to time renewed, amended, restated or replaced.

     “Hazardous Materials” means the following:

	 	(1)	 	any oil, flammable substances, explosives, radioactive
materials, hazardous wastes or substances, toxic wastes or substances or any
other materials or pollutants, exposure to which is prohibited, limited or
regulated by any governmental authority pursuant to any Hazardous Materials
Law;
	 
	 	(2)	 	asbestos in any form which is or could become friable, urea
formaldehyde foam insulation, transformers or other equipment which contain
dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty (50) parts per million, exposure to which is prohibited, limited or
regulated by any governmental authority pursuant to any Hazardous Materials
Law;
	 
	 	(3)	 	any chemical, material or substance defined as or included in
the definition of “hazardous substances”, “hazardous wastes”, “hazardous
materials”, “extremely hazardous waste”, “restricted hazardous waste”, or
“toxic substances” or words of similar import under any Hazardous Material
Laws; and
	 
	 	(4)	 	any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority pursuant to any
Hazardous Materials Law.

     “Hazardous Materials Laws” means any federal, state or local laws, ordinances and the
regulations, policies or publications promulgated pursuant thereto relating to (i) the environment,
(ii) health and safety, (iii) any Hazardous Materials (including, without limitation, the use,
handling, transportation, production, disposal, discharge or storage thereof), (iv) industrial
hygiene or (v) environmental conditions on, under or about property, including, without limitation,
soil and groundwater conditions; including, but not limited to: the Clean Air Act, as amended, 42
U.S.C. Section 7401, et seq.; the Clean Water Act, 33 U.S.C. Section 1251, et seq.; the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. Section
9601, et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.
Section 11001, et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section
1251, et seq.; the Hazardous Materials Transportation Act, as amended, 49 U.S.C. Section 5101, et
seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq.; the Safe
Drinking Water Act, 42 U.S.C. Sections 300f to 300j; the Solid Waste Disposal Act, 42 U.S.C.
Section 3251, et seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601, et seq.; the
Occupational Safety and Health Act, 29 U.S.C. § 651 et seq.; the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. §§ 136 et seq.; the Endangered

7

 

Species Act, 16 U.S.C. §§ 1531 et seq. and the National Environmental Policy Act, 42 U.S.C. §
4321 et seq.

     “Indemnified Party” means Lender and any Affiliate of Lender and any successors or assigns of
Lender or any such Affiliate and each of their officers, directors, employees, agents, and
advisors.

     “Independent Director” or “Independent Manager” of any corporation or limited liability
company shall mean an individual who has prior experience as an independent director, independent
manager or independent member with at least three (3) years of employment experience and who is
provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc.,
Wilmington Trust Company, Stewart Management Company, Lord Securities Corporation or, if none of
those companies is then providing professional Independent Directors or Independent Managers,
another nationally-recognized company reasonably approved by Lender, in each case that is not an
Affiliate of Borrower and that provides professional Independent Directors or Independent Managers
and other corporate services in the ordinary course of its business, and which individual is duly
appointed as a member of the board of directors or board of managers of such corporation or limited
liability company and is not, and has never been, and will not while serving as Independent
Director or Independent Manager be, any of the following:

     (1) a member, partner, equityholder, manager, director, officer or employee of Borrower
or any of its Affiliates;

     (2) a creditor, supplier or service provider (including provider of professional
services) to Borrower or any of their respective equityholders or Affiliates;

     (3) a family member of any such member, partner, equityholder, manager, director,
officer, employee, creditor, supplier or service provider;

     (4) an independent manager, independent director or similar officer of any entity that
is in the direct chain of ownership of Borrower; or

     (5) a Person that controls (whether directly, indirectly or otherwise) any of (1), (2)
or (3) above.

     “Initial Defaulted Timeshare Loan” means a Timeshare Loan with respect to which any payment
installment has become more than 180 days contractually past due as of the Effective Date.

     “Initial Defaulted Timeshare Loans Release Fee” means a release fee in the amount of one
thirty-sixth (1/36) of the product of (x) the number of Initial Defaulted Timeshare Loans existing
as of the Effective Date, multiplied by (y) $800 for each Annual Unit Week or $400 for each
Biennial Unit Week, as such terms are defined by the Timeshare Declaration.

     “Insurance Proceeds” means (i) proceeds of any insurance policy, including property and
casualty insurance policies and title insurance policies, and (ii) any condemnation proceeds, in
each case which relate to the Timeshare Loans or the Timeshare Project and are paid or

8

 

required to be paid to, and may be retained by, the Borrower, any of its Affiliates or to the
mortgagee under any Obligor Mortgage.

     “Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of August 8,
2007, among Servicing Agent (f/k/a Sunterra Financial Services Inc.), as servicer thereunder, Wells
Fargo Bank, National Association, as agent thereunder, and the other borrowers, creditors and other
Persons party thereto from time to time, as such agreement is amended, modified or restated from
time to time.

     “Interest Period” means, with respect to any Payment Date other than the initial Payment Date,
the calendar month immediately preceding the month in which such Payment Date occurs, and with
respect to the initial Payment Date, the period commencing on the Effective Date and ending on the
last day of the calendar month immediately preceding the month in which such initial Payment Date
occurs.

     “Interest Rate” means, the greater of (i) the variable interest rate per annum equal to LIBOR
plus 7.0% and (ii) 10.0% per annum, in each case adjusted monthly on the first (1st)
Business Day of each calendar month.

     “Interim Collection Account” means each of (i) the segregated bank account having account
number 005502718882 established and maintained by Bank for Borrower, and subject to that certain
Deeded ACH Account Activation Agreement, dated as of the date hereof among Lender, Borrower and
Interim Collection Account Bank, and (ii) the segregated bank account having account number
005502712671 established and maintained by Bank for Borrower, and subject to that certain Deposit
Account Control Agreement (Deeded), dated as of the date hereof among Lender, Borrower and Interim
Collection Account Bank.

     “Interim Collection Account Bank” means Bank of America, N.A.

     “Interim Lockbox” means the “Lockbox” as defined in the Interim Lockbox Agreement.

     “Interim Lockbox Agreement” means that certain Lockbox Agreement (Deeded) entered into among
Lender, Borrower and Regulus America LLC.

     “Interim Servicing Period” means the period commencing on the Effective Date and ending on the
date on which the Servicing Agent becomes responsible for servicing the Timeshare Loans and
Receivables pursuant to the Servicing Transition Agreement.

     “Laws and Regulations” shall mean (i) all laws, regulations, orders, codes, ordinances, rules
and statutes of all local, regional, county, state and federal governmental authorities having
jurisdiction over Borrower, Guarantor, the Collateral, the Timeshare Project, the Timeshare
Association, the Timeshare Manager, or the offer and sale of Timeshare Interests, including but not
limited to Chapters 718 and 721, Florida Statutes, and (ii) all restrictive covenants and other
title encumbrances, permits and approvals, contracts, leases and other rental agreements which in
any case relate to the development, occupancy, ownership, management, use, and/or operation of a
Timeshare Project or the sale of Timeshare Interests.

9

 

     “Lender” means Resort Finance America, LLC, a Delaware limited liability company, and its
successors and permitted assigns.

     “LIBOR” means the average of interbank offered rates for 30-day dollar deposits in the London
market based on quotations of five major banks, as published from time to time in The Wall Street
Journal. In the event that The Wall Street Journal ceases to be published or ceases to
publish such a compilation of interbank offered rates, Borrower and Lender will agree on a
substitute source and method of determining the interest rate generally known as the one-month (or
30-day) LIBOR rate.

     “Loan” means the loan made pursuant to Section 2.1 hereof.

     “Loan Agreement” means this Loan and Security Agreement with any and all addendums and
exhibits as they may be from time to time renewed, amended, restated or replaced.

     “Loan Amount” means $74,517,139.00.

     “Loan Documents” means this Loan Agreement, the Note, the Guaranty, Intercreditor Agreement,
the Servicing Agreement, the Servicing Transition Agreement, the Backup Servicing Agreement, the
Custodial Agreement, the Security Documents and all other documents now or hereafter executed in
connection with the Loan, as they may be from time to time renewed, amended, restated or replaced.

     “Lockbox Account” means the centralized lockbox account managed by the Servicing Agent, and
into which the Servicing Agent will remit all Collateral Proceeds received by it, pursuant to the
provisions of the Servicing Agreement.

     “Material Adverse Change” means any material and adverse change in, or a change which has a
material and adverse effect upon, any of:

     (1) the business, properties, operations or condition (financial or otherwise) of
Borrower or of Guarantor, which, with the giving of notice or the passage of time, or both,
could reasonably be expected to result in either (i) Guarantor failing to comply with any of
the financial covenants contained in Section 5(f) of the Guaranty, or (ii) Borrower’s or
Guarantor’s inability to perform its or their respective obligations pursuant to the terms
of the Loan Documents; or

     (2) the legal or financial ability of Borrower or Guarantor to perform its or their
respective obligations under the Loan Documents and to avoid any Potential Default or Event
of Default; or

     (3) the legality, validity, binding effect or enforceability against Borrower or
Guarantor of any Loan Document; or

     (4) the value of a material portion of the Collateral.

10

 

     “Maturity Date” means the first to occur of (i) the date which occurs four (4) years following
the Effective Date, or (ii) the date on which the entire outstanding principal amount of the Loan
is required to be repaid pursuant to the terms of this Loan Agreement, whether by acceleration or
otherwise.

     “Minimum Foreclosure Amount” means, with respect to any calendar month, an amount of Timeshare
Loans equal to the total number of Initial Defaulted Timeshare Loans as of the Effective Date
divided by 36.

     “Mystic Dunes” has the meaning set forth in the recitals hereto.

     “Note” means the promissory note to be made and delivered by Borrower to Lender having a face
amount equal to the Loan Amount, dated as of even date herewith, and made payable to Lender to
evidence the Loan, as it may be from time to time renewed, amended, restated or replaced.

     “Obligor” means a Person obligated to make payments under a Timeshare Loan.

     “Obligor Mortgage” means a purchase money mortgage that secures a Timeshare Loan.

     “Obligor Note” means the executed promissory note or other instrument of indebtedness
evidencing the indebtedness of an Obligor under a Timeshare Loan, together with any rider, addendum
or amendment thereto, or any renewal, substitution or replacement of such note or instrument.

     “Payment Date” means each of (i) the 20th day of each calendar month or, if such
day is not a Business Day, the next succeeding Business Day, and (ii) the Maturity Date.

     “Payment Date Invoice” has the meaning set forth in Section 2.6(c) hereof.

     “Person” means an individual, partnership, corporation (including a business trust), limited
liability company, joint stock company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency thereof.

     “Petition Date” means November 19, 2010.

     “Plan of Reorganization” means the Debtors’ First Amended Joint Plan of Reorganization Under
Chapter 11 of the Bankruptcy Code, filed on March 22, 2011.

     “Potential Default” means the existence of any event, which with the giving of notice, the
passage of time, or both, would constitute an Event of Default hereunder.

     “Prepetition Lender” has the meaning set forth in the recitals hereto.

     “Prepetition Loan Agreement” has the meaning set forth in the recitals hereto.

     “Purchase Contract” means a purchase contract evidencing the sale and purchase of a Timeshare
Interest.

11

 

     “Purchase Contract Upgrade” means a purchase contract pursuant to which Borrower or an
Affiliate thereof has agreed to sell, and an existing Obligor has agreed to purchase, an upgraded
Timeshare Interest in replacement of such Obligor’s existing Timeshare Interest, the related
Timeshare Loan of which is included in the Collateral.

     “Receivables” means the payments required to be made pursuant to an Obligor Note and/or the
related Obligor Mortgage.

     “Register” has the meaning set forth in Section 8.1(b).

     “Related Security” means with respect to any Timeshare Loan owned by a Person: (i) all of such
Person’s interest in the Timeshare Interest arising under or in connection with the related Obligor
Mortgage, including, without limitation, all liquidation proceeds and Insurance Proceeds, if any,
received with respect thereto on or after the Effective Date, and the Timeshare Loan Documents
relating to such Timeshare Loan, (ii) all other security interests or liens and property subject
thereto from time to time purporting to secure payment of such Timeshare Loan, together with all
mortgages, assignments and financing statements signed by an Obligor describing any collateral
securing such Timeshare Loan, (iii) all guarantees, insurance and other agreements or arrangements
of whatever character from time to time supporting or securing payment of such Timeshare Loan, (iv)
all other security and books, records and computer tapes relating to the foregoing and (v) all of
such Person’s right, title and interest in and to any other account into which collections in
respect of such Timeshare Loans may be deposited from time to time.

     “Required Timeshare Approvals” means all approvals required from governmental agencies in
order to sell Timeshare Interests and offer them for sale in the jurisdiction where the applicable
Timeshare Project is located and other jurisdictions where Timeshare Interests have been offered
for sale or sold.

     “Resolution” means a resolution of a corporation certified as true and correct by an
authorized officer of such corporation, a certificate signed by the manager of a limited liability
company and such members whose approval is required, or a partnership certificate signed by all of
the general partners of such partnership and such other partners whose approval is required.

     “Responsible Officer” means, when used with respect to the parties hereto, any officer,
including any vice president, assistant vice president, treasurer, assistant treasurer, secretary,
assistant secretary, director, manager or any other officer of such party who customarily performs
functions similar to those performed by the persons who at the time shall be such officers,
respectively.

     “Security Documents” means the Assignments, this Loan Agreement, the Interim Lockbox
Agreement, the Interim Collection Agreement, and all other documents now or hereafter securing
Borrower’ obligations under the Loan Documents, as they may be from time to time renewed, amended,
restated or replaced.

     “Servicing Agent” means Diamond Resorts Financial Services, Inc., as the Servicing Agent, or
if the Servicing Agreement is terminated in accordance with the provisions thereof, Backup
Servicing Agent or any other servicer of the Timeshare Loans engaged by Lender.

12

 

     “Servicing Agreement” means the agreement dated as of the date hereof among Lender, Borrower
and Servicing Agent, which provides for Servicing Agent to perform for the benefit of Borrower and
Lender certain accounting, reporting and other servicing functions with respect to the Collateral,
as it may be from time to time renewed, amended, restated or replaced.

     “Servicing Fee” means, with respect to any Payment Date, a monthly fee equal to (i) the
aggregate outstanding principal balance of all Timeshare Loans included in the Collateral that were
not Defaulted Timeshare Loans as of the end of the related Interest Period, multiplied by
(ii) a fraction, the numerator of which is 1.5% and the denominator of which is 12.

     “Servicing Report Reconciliation” means a written reconciliation from Borrower and Servicing
Agent reconciling the difference between the payments actually received in the Lockbox Account and
the Collection Account (or, during the Interim Servicing Period, in the Interim Lockbox Account and
the Interim Collection Account) during the subject month and the payments stated in the servicing
report to have been made by the Obligors under the Timeshare Loans assigned to Lender.

     “Servicing Transition Agreement” means the agreement dated as of the date hereof among Lender,
Borrower, Existing Servicer and Servicing Agent, which provides for the transfer of servicing of
the Timeshare Loans and Receivables from Existing Servicer to Servicing Agent.

     “Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that
on such date (i) the fair value of the property (including rights of contribution in respect of
obligations for which such Person has provided a guarantee) of such Person is greater than the
total amount of liabilities, including contingent liabilities, of such Person, (ii) the present
fair salable value of the assets (which for this purpose shall include rights of contribution in
respect of obligations for which such Person has provided a guarantee) of such Person is not less
than the amount that will be required to pay the probable liability of such Person on its debts as
they become absolute and matured, (iii) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities
as they mature, (iv) such Person is not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which such Person’s property would constitute an
unreasonably small capital, and (v) such Person is able to pay its debts and liabilities,
contingent obligations and other commitments as they mature in the ordinary course of business.
The amount of contingent liabilities at any time shall be computed as the amount that, in the light
of all the facts and circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability. For purposes of this definition, each of the
phrases “not constitute an unreasonably small amount of capital” and “able to pay its debts and
liabilities, contingent obligations and other commitments, as the mature” means that such Person
will be able to generate enough cash from operations, asset dispositions or refinancing, or a
combination thereof, to meet its obligations as they become due in the ordinary and regular course
of business and, with respect to Borrower, taking into account the transactions contemplated by
this Loan Agreement.

     “Special Purpose Entity” means, as applied to the Borrower, a limited liability company which
for so long as all or any portion of the Loan is outstanding shall not:

13

 

     (a) incur any debt, secured or unsecured, direct or contingent (including guaranteeing any
obligation), excluding debt outstanding under this Loan Agreement;

     (b) seek the dissolution or winding up, in whole or in part, of the Borrower;

     (c) merge into or consolidate with any Person or dissolve, terminate or liquidate, in whole or
in part, transfer or otherwise dispose of all or substantially all of its assets or change its
legal structure;

     (d) unless unanimously approved by the vote of the Board in which the Independent Director (as
hereinafter defined) participates, file a voluntary petition or otherwise initiate proceedings to
have the Borrower adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or
insolvency proceedings against the Borrower, or file a petition seeking or consenting to
reorganization or relief of the Borrower as debtor under any applicable federal or state law
relating to bankruptcy, insolvency, or other relief for debtors with respect to the Borrower; or
seek or consent to the appointment of any trustee, receiver, conservator, assignee, sequestrator,
custodian, liquidator (or other similar official) of the Borrower or of all or any substantial part
of the properties and assets of the Borrower, or make any general assignment for the benefit of
creditors of the Borrower, or admit in writing the inability of the Borrower to pay its debts
generally as they become due or declare or effect a moratorium on the Borrower debt or take any
action in furtherance of any such action, or take any act in furtherance of any of the foregoing;

     (e) engage in any business other than the owning, holding and servicing of the Timeshare Loans
and the repayment of the Loan evidenced by this Loan Agreement;

     (f) acquire or own any material asset other than (i) the assets related to this Loan
Agreement, and (ii) such incidental real and personal property as may be necessary for the
performance of its duties under this Loan Agreement;

     (g) sell all or substantially all of its assets, except as permitted under this Loan
Agreement;

     (h) fail to observe all organizational formalities, or fail to preserve its existence as an
entity duly organized, validly existing and in good standing (if applicable) under the laws of
Delaware, or, without the prior written consent of the Lender, amend, modify, terminate or fail to
comply with the provisions of its organizational documents;

     (i) make any investment in or acquire the obligations or securities of any other Person
(including, without limitation, any obligations or securities of any member or any affiliate of the
Borrower) without the consent of the Lender;

     (j) commingle its assets with the assets of any of its affiliates or of any other Person, or
fail to hold its assets in its own name;

     (k) fail to pay its debts and liabilities from its assets as the same shall become due;

14

 

     (l) fail to maintain its records, books of account and bank accounts separate and apart from
its affiliates and any other Person, except that the Borrower’s financial position, assets,
liabilities, net worth and operating results may be included in the consolidated financial
statements of one or more affiliates;

     (m) enter into any contract or agreement with any Member, or affiliate of the Borrower or any
guarantor of all or a portion of the obligations secured by the Collateral, except upon terms and
conditions that are intrinsically fair and substantially similar to those that would be available
on an arms-length basis with third parties other than any affiliate of the Borrower;

     (n) fail to conduct its business in its own name;

     (o) identify itself as a department or division of any other Person;

     (p) fail to correct any known misunderstandings regarding the separate identity of the
Borrower;

     (q) hold itself out to be responsible (or pledge its assets as security) for the debts of
another Person;

     (r) make any loans or advances to any third party, including any affiliate of the Borrower
(other than a direct subsidiary of the Borrower);

     (s) fail to file its own tax returns (unless consolidated with a parent entity);

     (t) fail either to hold itself out to the public as a legal entity separate and distinct from
any other Person or to conduct its business solely in its own name in order not (i) to mislead
others as to the identity with which such other party is transacting business, or (ii) to suggest
that the Borrower is responsible for the debts of any third party (including any affiliate of the
Borrower);

     (u) fail to pay the salaries of its own employees (if any) and maintain a sufficient number of
employees for its contemplated business operations;

     (v) fail to allocate fairly and reasonably any overhead expenses that are shared with any
affiliate, including without limitation paying for shared office space and services performed by
any employee of an affiliate;

     (w) fail to maintain and use separate stationary, invoices and checks, if any, bearing its
name; or

     (x) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a
business of its size and character and in light of its contemplated business operations.

     “Springing Member” means a Person (who may be an Independent Director) who has signed the
limited liability company agreement of a given Delaware limited liability company, which agreement
provides that, upon the withdrawal, dissolution or disassociation of the last

15

 

remaining member of such limited liability company, such Person shall become a member of such
limited liability company having no economic interest therein.

     “Tempus” has the meaning set forth in the recitals hereto.

     “Tempus Golf” has the meaning set forth in the recitals hereto.

     “Tempus Palms” has the meaning set forth in the recitals hereto.

     “Third Party Consents” means those consents which Lender requires Borrower to obtain, or which
Borrower is contractually or legally obligated to obtain, from others in connection with the
transaction contemplated by the Loan Documents.

     “Timeshare Association” means The Tempus Palms Country Club and Resort Condominium
Association, Inc., a Florida not-for-profit corporation established in accordance with the
Timeshare Declaration to manage the Timeshare Program and in which all owners of Timeshare
Interests will be members.

     “Timeshare Declaration” means the Declaration of Condominium of The Palms Country Club and
Resort, A Condominium, recorded in the Public Records of Osceola County, Florida, in Book 1545, at
Page 2911, on October 27, 1998, as amended, restated, and/or supplemented from time to time.

     “Timeshare Interest” means a Unit Week, as such term is defined by the Timeshare Declaration.

     “Timeshare Loan” means a purchase money loan, the proceeds of which were used by the related
Obligor to purchase the related Timeshare Interest in the Timeshare Project from Tempus Palms. All
Timeshare Loans assigned to Lender are listed on Schedule 1 attached hereto.

     “Timeshare Loan Documents” means, with respect to a Timeshare Loan and each Obligor, the
related (i) Timeshare Loan Files and (ii) Timeshare Loan Servicing Files.

     “Timeshare Loan File” means, with respect to any Obligor of a Timeshare Interest for which the
Obligor is a party to a Timeshare Loan, the following documents executed by such Obligor or
delivered in connection with such Timeshare Loan:

     (a) the original Obligor Note bearing all intervening endorsements showing a complete chain of
endorsements from the originator of such Timeshare Loan to Borrower, endorsed by Borrower in blank,
without recourse, in the following form: “Pay to the order of ________________________, without
recourse” and signed in the name of Borrower by an authorized officer;

     (b) the original Obligor Mortgage or deed of trust containing the original signatures of all
persons named as the maker, the mortgagor or trustor with evidence of recording indicated, if such
Obligor Mortgage had been recorded; provided, however, that no such original
Mortgage shall be required if included among the applicable Timeshare Loan File is a certified copy
of the

16

 

recorded Obligor Mortgage and an original or a copy of the title insurance policy (or other
evidence of title insurance, including title commitment or binder), to the extent title insurance
had been obtained;

     (c) an original individual or bulk assignment of Obligor Mortgage in blank and signed in the
name of Borrower by an authorized officer;

     (d) the originals of all intervening assignments (or a copy certified to the Custodian) of the
Obligor Mortgage showing a complete chain of assignments from the originator of such Mortgage Loan
to Borrower;

     (e) an original or a copy of any assumption or modification of the Obligor Note or Obligor
Mortgage with evidence of recording thereon or an original or a copy of the title insurance policy
with respect to such Obligor Mortgage;

     (f) an original or a copy of an individual or bulk title insurance policy or master blanket
title insurance policy covering such Timeshare Loan when applicable (or a commitment for title
insurance or an opinion of counsel with respect to title to and liens encumbering the Timeshare
Property);

     (g) the original power of attorney (or a certified copy), if applicable;

     (h) the original or a copy of the Purchase Contract that relates to each Obligor Note,
including any addenda thereto; and

     (i) the original truth-in-lending disclosure statement (or a copy) that relates to each
Timeshare Loan.

     “Timeshare Loan Servicing File” means, with respect to each Timeshare Loan and each Obligor a
copy of the related Timeshare Loan File and all other papers and computerized records customarily
maintained by the Servicer in servicing timeshare loans comparable to the Timeshare Loans.

     “Timeshare Management Agreement” means the management agreement from time to time entered into
between the Timeshare Association and the Timeshare Manager for the management of the Timeshare
Program.

     “Timeshare Manager” means the Person from time to time employed by Timeshare Association to
manage the Timeshare Association.

     “Timeshare Program” means the program created under the Timeshare Declaration by which
Obligors may own Timeshare Interests, enjoy their respective Timeshare Interests on a recurring
basis, and share the expenses associated with the operation and management of such program.

     “Timeshare Program Consumer Documents” means, as applicable, the Purchase Contract, Obligor
Note, Obligor Mortgage, deed of conveyance, credit application, Truth-in-Lending Disclosure
Statement, rescission right notices, final subdivision public

17

 

reports/prospectuses/ public offering statements, receipt for public report, and other
documents used by Tempus Palms in connection with the sale of Timeshare Interests.

     “Timeshare Program Governing Documents” means the Timeshare Declaration, the articles of
incorporation and bylaws for the Timeshare Association, any and all rules and regulations from time
to time adopted by the Timeshare Association, the Timeshare Management Agreement and any subsidy
agreement by which Borrower is obligated to subsidize shortfalls in the budget of the Timeshare
Program in lieu of paying assessments.

     “Timeshare Project” the Timeshare project known as “Mystic Dunes Resort and Golf Club”.

     “Transfer” means, with respect to the Collateral, Borrower and/or Guarantor, the occurrence of
any of the following:

     (1) any sale, conveyance, assignment, transfer, alienation, mortgage, conveyance of
security title, encumbrance or other disposition of any kind of the Collateral, or any other
transaction the result of which is, directly or indirectly, to divest Borrower of any
portion of its title to or interest in the Collateral, voluntarily or involuntarily, other
than transfers and sales of the Timeshare Interests in the ordinary course of business, it
being the express intention of Borrower and Lender that Borrower is prohibited from granting
to any Person a lien or encumbrance upon any portion of the Collateral that is collateral
for the Loan, regardless of whether such lien is senior or subordinate to Lender’s lien;

     (2) any sale, conveyance, assignment, transfer, alienation, mortgage, conveyance of
security title, encumbrance or other disposition of any kind of any other collateral for the
Loan, or any other transaction the result of which is, directly or indirectly, to divest
Borrower of any portion of its title to or interest in such collateral, voluntarily or
involuntarily, it being the express intention of Borrower and Lender that Borrower is
prohibited from granting to any Person a lien or encumbrance upon such other collateral,
regardless of whether such lien is senior or subordinate to Lender’s lien;

     (3) any merger, consolidation or dissolution involving Borrower or Guarantor, which
would result in a Person other than Guarantor owning the equity in Borrower or otherwise
being able to exercise control over Borrower or the assets of Borrower;

     (4) the sale or transfer of a majority of the assets of Borrower or Guarantor;

     (5) any merger, consolidation or dissolution involving the sole member of Borrower or
any holder of equity interests in Guarantor, which would result in a Person other than
Tempus Holdings, LLC, or its Affiliates, owning more than 49% of the equity (directly or
indirectly) in the sole member of Borrower or Guarantor or otherwise being able to exercise
control over the sole member of Borrower or Guarantor or the assets of the sole member of
Borrower or Guarantor;

     (6) the sale or transfer of a majority of the assets of the sole member of Borrower or
of Guarantor;

18

 

     (7) the transfer of a controlling interest in the sole member of Borrower or in
Guarantor to another Person;

     (8) the transfer of more than 49% of the voting stock of the sole member of Borrower or
the transfer of more than 49% of the equity interests of Guarantor to another Person; or

     (9) the addition of any member to Borrower or Guarantor, which would result in a Person
other than Tempus Holdings, LLC, or its Affiliates, owning more than 49% of the equity in
Borrower (indirectly) or Guarantor (directly) or otherwise being able to exercise control
over Borrower or Guarantor or the assets of Borrower or Guarantor.

     “Unit” means a dwelling unit in a Timeshare Project.

          “Upgraded Timeshare Loan” shall mean a new Timeshare Loan entered into by an Obligor to
finance the purchase of a new or additional Timeshare Interest pursuant to the upgrade marketing
program of any of the Affiliates of Borrower, and where (i) the Obligor re-conveys or reassigns the
Obligor’s existing Timeshare Interest for a new Timeshare Interest and the Obligor’s existing
Timeshare Loan is discharged and (ii) the Obligor purchases an additional Timeshare Interest, and
enters into the new Timeshare Loan to finance the remaining balance of the Obligor’s existing
Timeshare Loan and the purchase price of the additional Timeshare Interest.

Section 1.2 Other Definitional Provisions

     (a) Accounting terms not defined herein will have the respective meanings given to them under
GAAP. To the extent that the definitions of accounting terms herein are inconsistent with the
meanings of such terms under GAAP, the definitions contained herein will control.

     (b) The words “hereof’, “herein” and “hereunder” and words of similar import when used in this
Loan Agreement will refer to this Loan Agreement as a whole and not to any particular provision of
this Loan Agreement.

     (c) In this Loan Agreement in the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including” and the words “to” and “until”
each means “to but excluding”.

ARTICLE II

THE LOAN

Section 2.1 The Loan

     Subject to the terms and conditions set forth herein, and in accordance with the terms and
conditions of the Plan of Reorganization, Lender is deemed to have made the Loan to Borrower on the
Effective Date in an amount equal to the Loan Amount. Amounts deemed borrowed under this
Section 2.1 and repaid or prepaid may not be reborrowed. As the Loan Amount is

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deemed to be advanced to Borrower pursuant to the Plan of Reorganization, in no event shall
Lender be required to at any time advance any funds whatsoever under this Loan Agreement.

Section 2.2 Use of Proceeds

     Borrower will use the proceeds of the Loan only for purposes of restructuring all outstanding
principal, interest, fees and other amounts under the Prepetition Loan Agreement.

Section 2.3 Evidence of Indebtedness; Note

     (a) The Loan made by Lender shall be evidenced by one or more accounts or records maintained
by Lender and evidenced by one or more entries in the Register maintained by Lender, acting solely
for purposes of Treasury Regulation Section 5f.103-1(c), as agent for Borrower, in each case in the
ordinary course of business. The accounts or records maintained by Lender shall be prima facie
evidence absent manifest error of the aggregate amount of the Loan made by Lender to Borrower and
the interest and payments thereon. Any failure to so record or any error in doing so shall not,
however, limit or otherwise affect the obligation of Borrower hereunder to pay any amount owing
with respect to the Loan. At closing, Borrower shall execute and deliver to Lender a Note payable
to Lender, which shall evidence the Loan in addition to such accounts or records.

     (b) In addition to the accounts and records referred to in Section 2.3(a), Lender
shall maintain, in accordance with its usual practice, accounts or records and entries in the
Register evidencing any assignments or participations in the Loan.

     (c) Entries made in good faith by Lender in the Register pursuant to Sections 2.3(a)
and (b) shall be prima facie evidence of the amount of principal and interest due and
payable or to become due and payable from Borrower to Lender and under this Agreement, absent
manifest error; provided that the failure of Lender to make an entry, or any finding that
an entry is incorrect, in the Register or such account or accounts shall not limit or otherwise
affect the obligations of Borrower under this Agreement and the other Loan Documents.

Section 2.4 Interest

     (a) Applicable Interest Rate. Subject to the provisions of Section 2.4(b),
the Loan shall bear interest on the outstanding principal amount thereof at a rate per annum equal
to the Interest Rate.

     (b) Default Interest. If any amount (including, without limitation, principal of
and/or interest on the Loan) payable by Borrower under any Loan Document is not paid when due
(without regard to any applicable grace periods), whether at stated maturity, by acceleration or
otherwise, then such amount shall thereafter bear interest at a fluctuating interest rate per annum
at all times equal to the Default Rate to the full extent permitted by applicable law, without any
further action of Lender. While any Event of Default exists, Borrower shall pay interest on the
principal amount of the Loan (together with any accrued and unpaid interest, late fees, costs,
etc.) at a fluctuating interest rate per annum at all times equal to the Default Rate to the full
extent permitted by applicable law.

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     (c) Interest Payment Dates. Interest on the Loan shall be due and payable in arrears
with respect to each Interest Period in accordance with Section 2.6(a) and at such other
times as may be specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the commencement of any proceeding
under any Debtor Relief Law. Accrued and unpaid interest on past due amounts (including interest
on past due interest) shall be due and payable upon demand.

Section 2.5 Interest Rate Limitation

     The provisions of this Loan Agreement and the other Loan Documents are hereby expressly
limited so that in no contingency or event whatever will the amount paid or agreed to be paid to
Lender for the use, forbearance or detention of the sums evidenced by this Loan Agreement exceed
the maximum amount permissible under applicable law. If from any circumstance whatever the
performance or fulfillment of any provision of this Loan Agreement or of any other Loan Document
should involve or purport to require any payment in excess of the limit prescribed by law, then the
obligation to be performed or fulfilled is hereby reduced to the limit of such validity. In
addition, if, from any circumstance whatever, Lender should ever receive as interest an amount
which would exceed the highest lawful rate under applicable law, then the amount which would be
excessive interest will be applied as a reduction of principal (or at Lender’s option, be paid over
to Borrower), and will not be counted as interest.

Section 2.6 Payment of Principal, Interest and Fees

     (a) Monthly Application of Collateral Proceeds. Subject to the distribution
procedures for Available Collateral Proceeds on each Payment Date in accordance with this
Section 2.6(a), Lender shall be entitled to receive and hold 100% of the Collateral
Proceeds on a daily basis until all obligations hereunder are repaid in full in cash;
provided, that Servicing Agent shall be entitled to retain fifty percent (50%) of all “Fee
Income” (as defined in the Servicing Agreement) actually received, with the balance thereof to be
remitted to Lender to be applied on each Payment Date in reduction of the outstanding principal
balance of the Loan. The Collateral Proceeds sent (i) during the Interim Servicing Period, to the
Interim Collection Account and (ii) following expiration of the Interim Servicing Period, to the
Lockbox Account, shall in each case be swept to Lender on a daily basis in accordance with the
terms set forth in the Interim Collection Agreement and the Servicing Agreement, respectively;
provided, however, that no such amounts shall be deemed to have been applied to any
amounts owing hereunder (including, without limitation, in reduction of the outstanding principal
balance of the Loan) or under any other Loan Document until actually applied on a Payment Date in
accordance with the priority of payments set forth below. Any portion of the Collateral Proceeds
delivered to Borrower or any other Person shall be delivered to Lender within two (2) Business
Days. On each Payment Date, commencing with the Payment Date occurring in August 2011, Lender
shall distribute all Available Collateral Proceeds in accordance with the following priority:

     (1) first, to Servicing Agent, the Servicing Fee for the related Interest
Period (from which Servicing Fee the Servicing Agent shall pay the Backup Servicing Fee to
the Backup Servicing Agent);

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     (2) second, to Servicing Agent, 50% of all Customer Service Fees
collected during the related Interest Period, to the extent not already retained by
Servicing Agent pursuant to the Servicing Agreement;

     (3) third, to Lender, for the payment of all fees and other amounts (other than
principal and interest) owing by Borrower hereunder or under any other Loan Document;

     (4) fourth, to Lender, for the payment of all accrued but unpaid interest on
the Loan for the related Interest Period; and

     (5) fifth, to Lender, in repayment of the outstanding principal balance of the
Loan, until such outstanding principal balance has been reduced to zero.

At any time, upon notice to Borrower, Lender may, in its commercially reasonable discretion, modify
the above-described method of the application of the payments received under the Loans (other than
clauses (1) and (2)) to be consistent with industry standards.

     (b) Remittance of Certain Payments to Borrower. In the event that the Collateral
Proceeds received by Lender include payments for items other than principal and interest payable
under the Timeshare Loans (e.g. tax and insurance impounds, maintenance and other assessment
payments, etc.), Lender shall remit such other payments back to Borrower provided (i) Borrower
requests in writing that Lender remit such other payments back to Borrower, (ii) Borrower
specifically identifies (inclusive of the amount of) such other payments, (iii) Borrower provides
Lender with back-up to support the claim that such payments should not be part of the Collateral
Proceeds, and (iv) if such amount is actually remitted to Borrower, then Lender may adjust the Loan
balance as Lender deems appropriate under the circumstance. Collateral Proceeds received by Lender
with respect to Timeshare Loans which were released from the lien of Lender hereunder will not be
applied to the outstanding principal balance of the Loan but instead will be released to Borrower;
provided, however, while an Event of Default or Potential Default exists, any such
Collateral Proceeds received by Lender with respect to the Loan shall be applied to the payment of
Borrower’s obligations under the Loan Documents as Lender in its discretion may determine.

     (c) Accrued Interest Not Paid by Collateral Proceeds. On or before the fifteenth
(15th) day of each month (or, if such day is not a Business Day, the next succeeding
Business Day), commencing on August 19, 2011, Lender shall send to Borrower an invoice (the
"Payment Date Invoice”) setting forth (i) the amount of interest accrued for the previous month and
(ii) whether Collateral Proceeds for such month were insufficient to pay in full such accrued
interest. Borrower shall pay Lender an amount equal to any interest shortfall due for such month
on or before the Payment Date of the month in which the applicable invoice was sent to Borrower.

     (d) Quarterly Amortization Catch-Up. Lender shall include in each Payment Date
Invoice for the Payment Dates occurring in March, June, September, and December of each year
(commencing with the Payment Date occurring in September 2011) the amount of additional principal
required to be repaid by Borrower (without taking into account the distribution of any other
Available Collateral Proceeds on such Payment Date) in order for the outstanding principal amount
of the Loan to be reduced, calculated as of the end of the fiscal quarter immediately prior

22

 

to the month in which such Payment Date occurs, to the amount opposite each such fiscal
quarter end-date set forth in the table below; provided, that on the Maturity Date, the
outstanding principal balance and all accrued interest, fees and other amounts owing under the Loan
shall be due and payable immediately, without prior notice, demand or presentation. Borrower shall
pay Lender on or before the Payment Date of the month in which the applicable invoice was sent to
Borrower, as a mandatory prepayment of the Loan, an amount equal to such additional principal due
for such fiscal quarter.

	 	 	 	 	 
	Date	 	Amount	 
	September 30, 2011
	 	$	71,000,000	 
	December 31, 2011
	 	$	65,500,000	 
	March 31, 2012
	 	$	60,250,000	 
	June 30, 2012
	 	$	55,250,000	 
	September 30, 2012
	 	$	50,250,000	 
	December 31, 2012
	 	$	45,750,000	 
	March 31, 2013
	 	$	41,250,000	 
	June 30, 2013
	 	$	37,000,000	 
	September 30, 2013
	 	$	32,750,000	 
	December 31, 2013
	 	$	29,000,000	 
	March 31, 2014
	 	$	25,250,000	 
	June 30, 2014
	 	$	21,750,000	 
	September 30, 2014
	 	$	18,500,000	 
	December 31, 2014
	 	$	15,750,000	 
	March 31, 2015
	 	$	12,750,000	 
	June 30, 2015
	 	Remaining Balance Due

     (e) Borrowing Base Shortfall Payments. Lender shall include in each Payment Date
Invoice the amount of any Borrowing Base Shortfall required to make the necessary principal
payments required by Section 3.2. Borrower shall pay Lender on or before the last Business
Day of the month in which the applicable invoice was sent to Borrower, as a mandatory prepayment of
the Loan, an amount equal to such additional principal due for such month.

     (f) Timeshare Upgrade Prepayments. With respect to any Purchase Contract Upgrade,
Borrower shall pay Lender prior to Borrower’s execution and delivery of such Purchase Contract
Upgrade, as a mandatory prepayment of the Loan, an amount equal to the unpaid outstanding balance
of the Timeshare Loan related to the Timeshare Interest being upgraded.

     (g) Maturity Date Payment. On the Maturity Date, Borrower will repay the entire
remaining outstanding principal amount of the Loan together with all accrued and unpaid interest
and all other amounts owed to Lender under the Loan Documents.

     (h) Payments Set Aside. To the extent that any payment by or on behalf of Borrower is
made to Lender, or Lender exercises its right of setoff, and such payment or the proceeds of such
setoff or any part thereof is subsequently invalidated, declared to be fraudulent or

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preferential, set aside or required (including pursuant to any settlement entered into by
Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection
with any proceeding under any Debtor Relief Law or otherwise, then to the extent of such recovery,
the obligation or part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such setoff had not occurred.

Section 2.7 Optional Prepayments

     Borrower shall have the option to prepay the Loan in full or in part provided Borrower has
given Lender not less than two (2) Business Days’ prior written notice. Any partial prepayment
shall not be less than $500,000. Unless and until the Loan is repaid in full in cash and all other
amounts due and owing to Lender under the Loan Documents have been paid in full in cash,
prepayments shall not reduce or otherwise affect the right of Lender to receive and hold Collateral
Proceeds for distribution in accordance with Section 2.6(a). Any optional prepayments made
pursuant to this Section 2.7 shall be applied to the minimum required quarterly
amortization payments, as set forth in Section 2.6(d), due in the most distant future
(i.e., starting first on the payment due September 30, 2015, and once satisfied, then applied to
the payment due June 30, 2015, and so on).

Section 2.8 Late Charge

     If any installment of interest and/or the payment of principal is not received by Lender
within five (5) Business Days after the due date thereof, then in addition to the remedies
conferred upon Lender pursuant to Section 7.2 hereof and the other Loan Documents, Lender
may elect to assess a late charge of 4% of the amount of the installment due and unpaid, which such
late charge will be added to the delinquent amount to compensate Lender for the expense of handling
the delinquency. Borrower and Lender agree that such late charge represents a good faith and fair
and reasonable estimate of the probable cost to Lender of such delinquency. Borrower acknowledges
that during the time that any such amount is in default, Lender will incur losses which are
impracticable, costly and inconvenient to ascertain and that such late charge represents a
reasonable sum considering all of the circumstances existing on the date of the execution of this
Loan Agreement and represents a reasonable estimate of the losses Lender will incur by reason of
late payment. Borrower further agrees that proof of actual losses would be costly, inconvenient,
impracticable and extremely difficult to fix. Acceptance of such late charge will not constitute a
waiver of the default with respect to the overdue installment, and will not prevent Lender from
exercising any of the other rights and remedies available hereunder.

Section 2.9 Payments

     (a) Time and Place of Payment. All payments of principal, interest and fees on the
Loans must be made to Lender by federal funds wire transfer as instructed by Lender in immediately
available funds in United States Dollars not later than 1:00 p.m. Dallas, Texas time on the dates
such payments are to be made. Any payment received after 1:00 p.m. Dallas, Texas time will be
deemed received by Lender on the next Business Day. All payments to be made by Borrower shall be
made without condition or deduction for any counterclaim, defense, recoupment or setoff.

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     (b) Business Days. If any payment of principal, interest or fees to be made by
Borrower becomes due on a day other than a Business Day, such payment will be made on the next
succeeding Business Day and such extension of time will be included in computing any interest with
respect to such payment.

     (c) Actual/360. Throughout the term of the Loans, interest and fees will be
calculated on the basis the actual number of days elapsed during the period for which interest and
fees are being charged predicated on a year consisting of 360 days.

Section 2.10 Release Fees for Defaulted Timeshare Loans

     Commencing on the Payment Date occurring in the month immediately following the Effective Date
and continuing for thirty-six (36) months thereafter, Borrower shall pay to Lender the Initial
Defaulted Timeshare Loans Release Fee, on or before the Payment Day of each such month. Borrower
acknowledges that any and all recovery costs with respect to Borrower’s efforts to recover the
Initial Defaulted Timeshare Loans, whether by foreclosure, deed-in-lieu of foreclosure, or
otherwise, shall be the sole responsibility of Borrower, and all such Initial Defaulted Timeshare
Loans Release Fees shall be characterized as such, and not as prepayments of the Loan.

Section 2.11 Custodial Fee

     Borrower shall pay, and indemnify and hold Lender harmless from, any and all custodial or
similar fees that are required to be paid to the Custodial Agent.

Section 2.12 Servicing Fee

     To the extent remaining unpaid on any Payment Date following the distribution of Available
Collateral Proceeds in accordance with Section 2.6(a), Borrower shall pay, and indemnify
and hold Lender harmless from, any and all Servicing Fees and Customer Service Fees that are
required to be paid to the Servicing Agent.

Section 2.13 Backup Servicing Fee

     Borrower shall pay, and indemnify and hold Lender harmless from, any and all backup servicing
or similar fees, and all other amounts (including, without limitation, attorneys’ costs and
transitional expenses) that are required to be paid to the Backup Servicing Agent.

Section 2.14 Borrower’s Unconditional Obligation to Make Payments

     Whether or not the Collateral Proceeds shall be sufficient for that purpose, Borrower shall
pay when due all payments of principal, interest, and other amounts required to be made pursuant to
any of the Loan Documents. Borrower acknowledges and agrees that each Payment Date Invoice is for
Borrower’s convenience only, and that the failure of Lender to prepare or deliver any Payment Date
Invoice, or the occurrence of any errors therein, shall not reduce, waive or otherwise excuse
Borrower’s performance of its obligations hereunder. Borrower hereby expressly waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the Loan, the Note,
this Loan Agreement or any other Loan Document and any

25

 

requirement that Lender protect, secure, perfect or insure any lien or any property subject thereto
or exhaust any right or take any action against any Borrower or any other person or any collateral.
Borrower’s obligation to make the payments required by the terms of the Loan Documents is absolute
and unconditional.

Section 2.15 True-Up of Effective Date Payments

     On the Effective Date, the amounts described in Sections 4.1(o) (Payment of AD&C
Debt), (p) (Diamond Participation), (q) (Effective Date Prepayment) and (r)
(Payment of Transaction Expenses) (collectively, the “Effective Date Payment Amounts”)
shall be based on estimates and calculations agreed upon between Lender, Borrower and Mystic Dunes
as of June 26, 2011. Borrower shall cooperate with Lender (and shall cause Servicer to cooperate
with Lender) to calculate the final Effective Date Payment Amounts as of the Effective Date and, no
later than July 8, 2011, either (i) Borrower shall pay to Lender any deficiency between the
estimated Effective Date Payment Amounts and the final Effective Date Payment Amounts or (ii)
Lender shall refund to Borrower any surplus between the estimated Effective Date Payment Amounts
and the final Effective Date Payment Amounts.

ARTICLE III

SECURITY

Section 3.1 Grant of Security Interest in Collateral

     To secure the performance of all of the obligations under the Loan Documents, Borrower hereby
pledges, grants and assigns to Lender a security interest in and lien on, and collaterally assigns
to Lender, the Collateral. Such security interest shall be absolute, continuing, perfected,
direct, of first priority, exclusive and applicable to all amounts outstanding under the Loan and
to all of Borrower’s obligations under the Loan Documents. Lender’s security interest in the
Collateral shall secure the prompt and complete payment and performance in full when due, whether
at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise,
including, without limitation, payment in full of all principal and interest on the Note (including
the payment of amounts that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, or any successor provision thereof), and all costs of
collection, including reasonable attorneys’ fees and expenses, incurred by Lender in collecting
such amounts, whether now existing or hereafter arising, howsoever evidenced or created, actual,
direct, fixed or contingent. Borrower will unconditionally assign, endorse and deliver to Lender,
with full recourse, all Timeshare Loans which are part of the Collateral. Borrower further
warrants and guarantees the security interest granted in the Collateral. Lender is hereby
appointed Borrower’s attorney-in-fact to take any and all actions in Borrower’s name and/or on
Borrower’s behalf deemed necessary or appropriate by Lender with respect to the perfection of
Lender’s security interest in the Collateral, and the collection and remittance of payments
(including the endorsement of payment items) received on account of the Collateral;
provided, however, that Lender shall not utilize the power of attorney to take any
action including that which is described in Section 7.2(4) unless an Event of Default
exists. Lender may notify Persons bound thereby of the existence of Lender’s interest as assignee
in the Collateral and request from any Person bound by the Collateral any information relating to
him.

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Borrower authorizes Lender to file a UCC financing statement and confirms Lender’s authority to
pre-file the UCC financing statement as of the date of pre-filing; provided that Lender has
provided copies of such UCC financing statements in advance of filing.

Section 3.2 Maintenance of Borrowing Base

     If for any reason Lender determines that a Borrowing Base Shortfall exists (such determination
to be based upon the monthly servicing report prepared by Servicing Agent, subject to Lender’s
rights to request additional information of the Servicing Agent and revisions of manifest or other
errors in such servicing reports), then in accordance with Section 2.6(e) Borrower shall
make to Lender a principal payment in an amount equal to the Borrowing Base Shortfall.

Section 3.3 Reassignment of Timeshare Loans

     (a) Ineligible Timeshare Loans. Lender will promptly reassign and/or endorse to
Borrower, without recourse or warranty of any kind, any Timeshare Loan that ceases to be an
Eligible Timeshare Loan (whether due to payment in full of such Timeshare Loan or otherwise) so
long as: (i) as of the date of such release, Borrower is in compliance with its obligations under
Sections 2.6(d) and (e); (ii) on or as of the date of such release, Borrower has
paid the full amount of any Borrowing Base Shortfall that will result from the ineligible Timeshare
Loan or any other ineligible Timeshare Loan in accordance with Section 2.6(e) and Lender
has verified receipt of such amounts; and (iii) Borrower has requested Lender in writing to release
the ineligible Timeshare Loan and has provided supporting documentation satisfactory to Lender with
respect to how the Timeshare Loan has ceased to become an Eligible Timeshare Loan.

     (b) Timeshare Upgrades. Lender will promptly reassign and/or endorse to Borrower,
without recourse or warranty of any kind, any Timeshare Loan for which the related Timeshare
Interest is subject to a Purchase Contract Upgrade so long as: (i) as of the date of such release,
Borrower is in compliance with its obligations under Sections 2.6(d) and (e); (ii)
Borrower has paid the full amount of the unpaid principal balance of the Timeshare Loan related to
the Timeshare Interest being replaced in accordance with Section 2.6(f) and Lender has
verified receipt of such amounts; and (iii) Borrower has requested Lender in writing to release
such Timeshare Loan.

     (c) Defaulted Timeshare Loans. Lender will promptly reassign and/or endorse to
Borrower, without recourse or warranty of any kind, any Defaulted Timeshare Loan so long as: (i)
as of the date of such release, Borrower is in compliance with its obligations under Sections
2.6(d) and (e); (ii) (x) if such Defaulted Timeshare Loan is an Initial Defaulted
Timeshare Loan, Borrower has paid all release fees due and owing with respect to such Initial
Defaulted Timeshare Loan in accordance with Section 2.10 and Lender has verified receipt of
such amounts, or (y) if such Defaulted Timeshare Loan is not an Initial Defaulted Timeshare Loan,
Borrower has paid all amounts due and owing with respect to minimum amortization requirements and
Borrowing Base Shortfalls in accordance with Sections 2.6(d) and (e), respectively;
and (iii) Borrower has requested Lender in writing to release such Timeshare Loan.

27

 

     (d) Release Documentation. Borrower will prepare the reassignment document which
shall be substantially in the form and substance of Exhibit A, and will deliver it to
Lender for execution, and Lender will send Borrower the re-assignment document and the Timeshare
Loan being reassigned within a reasonable time after satisfaction of the applicable conditions
precedent specified in this Section 3.3.

Section 3.4 Collections

     Servicing Agent shall collect payments on the Timeshare Loans constituting part of the
Collateral and remit collected payments to Lender on a daily basis according to the terms of the
Servicing Agreement. Payments shall not be deemed received by Lender until Lender actually
receives such payments from Servicing Agent; provided, however, that no such
amounts shall be deemed to have been applied to any amounts owing hereunder (including, without
limitation, in reduction of the outstanding principal balance of the Loan) or under any other Loan
Document until actually applied on a Payment Date in accordance with the priority of payments set
forth in Section 2.6(a).

Section 3.5 Servicing of Timeshare Loans

     Servicing Agent shall perform the monthly reporting services required by Lender with regard to
the Collateral as set forth in the Servicing Agreement, all at Borrower’s sole cost and expense.

Section 3.6 Reconciliation Between Collections and Servicing Reports

     Within 30 days of Lender’s receipt of the monthly servicing report prepared by Servicing
Agent, Lender may, upon written notice to Borrower and Servicing Agent, request a Servicing Report
Reconciliation. Borrower and Servicing Agent shall provide Lender with such Servicing Report
Reconciliation within ten (10) Business Days of Borrower’s receipt of Lender’s request. To the
extent that Lender is not satisfied, in its sole and absolute discretion, with the Servicing Report
Reconciliation, Lender may provide Borrower with a written notice to pay to Lender within five (5)
Business Days of such notice the negative difference between the payments actually received by
Servicing Agent during the subject month minus the payments stated in the servicing report to have
been made by the Obligors under the Timeshare Loans assigned to Lender during the same month, which
difference is not reconciled to Lender’s satisfaction.

Section 3.7 Replacement of Agents

     If a default on the part of an Agent exists under the agreement to which it is a party or an
Event of Default exists, Lender may require that such Agent be replaced in accordance with the
terms of the Servicing Agreement, Backup Servicing Agreement or Custodial Agreement, as applicable.

Section 3.8 Maintenance of Security

     Borrower will deliver or cause to be delivered to Lender and will maintain or cause to be
maintained in full force and effect until all obligations arising under the Loan Documents have
been performed, as security for Borrower’ performance of its obligations under the Loan

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Documents, the Security Documents and all other security required to be given to Lender pursuant to
the terms of this Loan Agreement.

Section 3.9 Permitted Contests

     Notwithstanding anything in the Loan Documents to the contrary, after prior written notice to
Lender, Borrower at its expense may contest, by appropriate legal or other proceedings conducted in
good faith and with due diligence, the amount or validity of any tax, charge, assessment, statute,
regulation, or any monetary lien on the Collateral, so long as: (i) in the case of an unpaid tax,
charge, assessment or lien, such proceedings suspend the collection thereof from Borrower and the
Collateral, and shall not interfere with the payment of any monies due under the Collateral in
accordance with the terms of the Security Documents; and (ii) none of the Collateral is, in the
judgment of Lender, in any imminent danger of being sold, forfeited or lost; (iii) in the case of a
statute or regulation, neither Borrower nor Lender is in any danger of any civil or criminal
liability for failure to comply therewith.

Section 3.10 Liability of Guarantor

     The payment and performance of all Borrower’s obligations under the Loan Documents shall be
jointly, severally, primarily and unconditionally guaranteed by Guarantor, as set forth in the
Guaranty.

ARTICLE IV

CLOSING

Section 4.1 Closing Conditions

     The obligation of Lender to consummate the transaction contemplated by this Loan Agreement is
subject to the fulfillment or waiver of each of the following conditions precedent on or before the
Effective Date:

     (a) Plan of Reorganization. The order confirming the Plan of Reorganization shall
have been approved and entered by the Bankruptcy Court and shall not be subject to any stay or
modification, all conditions to the effectiveness, implementation or consummation thereof
(including the conditions for the occurrence of the Effective Date) shall have been satisfied or
waived as provided for in the Plan of Reorganization, and the Plan of Reorganization shall have
been consummated and implemented.

     (b) Event of Default. No Event of Default or Potential Default shall have occurred
and be continuing, or would result from the closing of the transactions contemplated herein.

     (c) Representations and Warranties. The representations and warranties of Borrower
and Guarantor contained in the Loan Documents shall be true and correct as of the Effective Date.

     (d) Loan Document Delivery. Lender shall have received the following, each of which
shall be originals or telecopies (followed promptly by originals) unless otherwise

29

 

specified, each duly and properly executed by a Responsible Officer of Borrower and, if applicable,
such other counterparty, each dated as of the date hereof or as of the Effective Date, as
applicable (or, in the case of certificates of governmental officials, a recent date before the
Effective Date) and each in form and substance satisfactory to Lender in its sole discretion:

(1) this Loan Agreement;

(2) the Guaranty;

(3) the Note;

(4) the Custodial Agreement;

(5) the Servicing Agreement;

(6) the Backup Servicing Agreement;

(7) the Servicing Transition Agreement; and

(8) each Security Document.

     (e) Intercreditor Agreement. Lender shall have received a true and correct copy of
the Intercreditor Agreement, together with a joinder agreement fully executed by Diamond Resorts
Corporation and Lender.

     (f) Legal Opinions. Lender shall have received from counsel for each of Borrower,
Guarantor and Servicer such legal opinions, in form and substance satisfactory to Lender, covering,
without limitation, due organization, enforceability, no conflicts, no defaults, no material
litigation, creation and perfection of security interest, and such other items as may be required
by Lender, in its sole discretion.

     (g) Organizational Documents. Lender is satisfied, in its sole and absolute
discretion, as to the Special Purpose Entity status of Borrower, and Lender shall have received,
with respect to each of Borrower, Guarantor and Servicing Agent, and Lender shall have approved,
each of the following:

     (1) Copies of such Person’s Articles of Organization, together with any amendments
thereto, certified to be true and complete by the secretary of such Person, as applicable;

     (2) A current original good standing certificate for each such Person issued by the
secretary of state of its jurisdiction of incorporation or organization, as applicable.

     (3) Certified Resolutions of each such Person authorizing the execution of all Loan
Documents to which it is a party and the performance of all obligations of such Person
thereunder. Such Resolutions shall be accompanied by a certificate from each such party,
signed by a duly authorized Responsible Officer of each and dated as of the Effective Date,
indicating the incumbency, authority, and signatures of the officers of

30

 

each authorized to sign, on behalf of such party, as applicable, the Loan Documents to
which such Person is a party.

     (h) Borrower Officer’s Certificate. Lender shall have received a certificate, dated
the Effective Date, signed by the principal executive officer of Borrower, to the effect that the
signer of such certificate has carefully examined the Loan Documents and that:

     (1) the representations and warranties of Borrower in this Loan Agreement and in any
other applicable Loan Document are true and correct at and as of the Effective Date (except
to the extent they expressly relate to an earlier date, in which case are true and correct
as of such earlier date);

     (2) Borrower has complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied by it under this Loan Agreement at or before the
Effective Date;

     (3) no Event of Default or Potential Default has occurred or is continuing; and

     (4) since the date of the Plan of Organization, there has been no material adverse
change in the condition (financial or otherwise) of Borrower.

     (i) Guarantor Officer’s Certificate. Lender shall have received a certificate, dated
the Effective Date, signed by the principal executive officer of Guarantor, to the effect that the
signer of such certificate has carefully examined the Loan Documents and that:

     (1) the representations and warranties of Guarantor in the Guaranty are true and
correct at and as of the Effective Date (except to the extent they expressly relate to an
earlier date, in which case are true and correct as of such earlier date);

     (2) Guarantor has complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied by it under the Guaranty at or before the Effective
Date;

     (3) no Event of Default or Potential Default has occurred or is continuing; and

     (4) since the date of the Plan of Organization, there has been no material adverse
change in the condition (financial or otherwise) of Guarantor.

     (j) Solvency Certificate. Lender shall have received certificates attesting to the
Solvency of each of Borrower and Guarantor after giving effect to the transactions contemplated
herein, from the chief financial officer of each such Person.

     (k) Collateral Documentation. Lender shall have received, from Borrower or the
Custodial Agent, as applicable to the extent set forth below, the following items, all of which
must be satisfactory in form and substance to Lender in its sole and absolute discretion:

     (1) Timeshare Documents. The Custodial Agent shall have confirmed in writing
(and the Bankruptcy Court shall have ordered) that the Custodial Agent holds all

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of the documents itemized in the definition of “Timeshare Loan File”, together with all
other items which are required to be delivered to the Lender or Custodial Agent under the
terms of the Custodial Agreement (including, without limitation, all purchase money
promissory notes and installment obligations and the related documents evidencing and
securing such payment obligations, and subject to any exceptions that existed as of the
Petition Date) for the exclusive benefit of and as the bailee of Lender under this Agreement
for the purposes of satisfying any of the provisions of the UCC permitting possession by a
bailee to perfect Lender’s security interest in the Collateral.

     (2) Endorsements of Obligor Notes; Assignments of Obligor Mortgages. Borrower,
Mystic Dunes, Prepetition Lender and Lender shall have authorized and instructed the
Custodial Agent, and the Custodial Agent shall have agreed to, (i) stamp each Obligor Note
currently endorsed in blank with a stamp provided by the Prepetition Lender so as to endorse
such Obligor Notes to the order of the Prepetition Lender, and (ii) endorse in blank all
Obligor Notes by including the allonges in the form attached hereto as Exhibit B in
the Collateral Package Items (as defined in the Custodial Agreement) relating to each
Obligor Note. Borrower shall have delivered to Lender, for recordation, bulk assignments of
the Obligor Mortgages in recordable form (x) by Mystic Dunes (as successor to Tempus Palms)
to Borrower, and (y) by Borrower to Lender, and otherwise substantially in the form and
substance of Exhibit C to this Loan Agreement;

     (3) Existing Servicer Confirmation. Lender shall have received written
confirmation from the Existing Servicer that it has not received notice of any complaint,
demand, set-off, or claim by any Person, including, without limitation, any Obligor, with
respect to the Timeshare Loans (other than as to routine matters involving the servicing of
a Timeshare Loan) and certifying the unpaid total payments due under the unpaid principal
balance of such Timeshare Loans.

     (l) Credit Reports; Search Reports. Lender shall have received, in form and substance
satisfactory to Lender, the results of UCC searches with respect to Borrower, Guarantor and lien,
litigation, judgment and bankruptcy searches for Borrower, Guarantor conducted in such
jurisdictions and for such other entities as Lender deems appropriate.

     (m) Financing Statements. Lender shall have received acknowledgment copies or stamped
receipt copies of proper financing statements, duly filed on or before the Effective Date under the
UCC of all jurisdictions that Lender may deem necessary or desirable in order to perfect the liens
created hereunder and under any other Loan Document, covering the Collateral described herein
and/or any other Loan Document.

     (n) Payoff Letters. Lender shall have received evidence that all other action that
Lender may deem necessary or desirable in order to perfect the liens created hereunder and under
any other Loan Document has been taken (including receipt of duly executed payoff letters, UCC-3
termination statements, intellectual property lien releases and other lien releases (including, in
each case, in connection with the DIP Credit Agreement and the AD&C Loan Agreement).

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     (o) Payment of AD&C Debt. Prepetition Lender shall have been repaid in full in cash
all principal, interest, fees and other amounts outstanding under the AD&C Loan Agreement and all
related documents in connection therewith (including, without limitation, the inventory and golf
course loan components).

     (p) Diamond Participation. Diamond Participant shall have executed and delivered to
Lender the Diamond Participation Agreement, and pursuant thereto Diamond Participant shall have
purchased from Lender for cash a 10% participation interest in the Loan (after giving effect to the
Effective Date Prepayment).

     (q) Effective Date Prepayment. Lender shall have received the Effective Date
Prepayment.

     (r) Payment of Transaction Expenses. Borrower shall have paid all out-of-pocket fees
and expenses incurred by Lender and its Affiliates (including, without limitation, all fees,
charges and disbursements of counsel to Lender (directly to such counsel if requested by Lender))
incurred in connection with the negotiation, preparation, execution and delivery of this Loan
Agreement and the other Loan Documents to the extent invoiced prior to or on the Effective Date
(plus, in the case of Lender’s counsel, such additional amounts of such fees, charges and
disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements
incurred or to be incurred by it through the closing proceedings, provided that such estimate shall
not thereafter preclude a final settling of accounts between Borrower and Lender), not to exceed
$250,000.

ARTICLE V

BORROWER’S REPRESENTATIONS AND WARRANTIES

Section 5.1 Consideration

     As an inducement to Lender to execute this Loan Agreement, make the Loan and disburse the
proceeds of the Loan, Borrower represents and warrants to Lender the truth and accuracy of the
matters set forth in this Article V.

Section 5.2 Organization

     Borrower is duly organized, validly existing and in good standing under the laws of its state
of organization, is duly qualified to do business and is in good standing in every jurisdiction
where its business or properties require such qualification, except in each jurisdiction in which
the failure to be qualified and in good standing will not result in a Material Adverse Change.
Borrower has all requisite power and authority, and all requisite governmental licenses,
authorizations, consents and approvals, necessary to own and operate its properties and to carry on
its business as now conducted or proposed to be conducted.

Section 5.3 Authorization

     The execution, delivery and performance by Borrower of the Loan Documents have been duly
authorized by all necessary action and do not and will not (i) contravene the Articles of

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Organization of Borrower, (ii) contravene any law, rule or regulation or any order, writ, judgment,
injunction or decree or any contractual restriction binding on or affecting Borrower or any part of
the Collateral, (iii) require any approval or consent of any member, partner, shareholder or any
other Person, other than approvals or consents which have been previously obtained and disclosed in
writing to Lender, (iv) result in a breach of or constitute a default under any indenture or loan
or credit agreement or any other material agreement, lease or instrument to which Borrower is a
party or by which Borrower or its properties or any part of the Collateral may be bound or
affected, or (v) result in, or require the creation or imposition of, any lien of any nature (other
than the liens contemplated hereby) upon or with respect to any part of the Collateral or any of
the properties now owned or hereafter acquired by Borrower. Borrower is not in default under any
such law, rule, regulation, order, writ, judgment, injunction, decree or contractual restriction or
any such indenture, agreement, lease or instrument.

Section 5.4 Governmental Consents

     Other than the Bankruptcy Court’s approval of the Plan of Reorganization, no approval,
consent, exemption, authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required for (a) the due execution, delivery and
performance by Borrower and/or Guarantor of the Loan Documents or any other document executed
pursuant thereto or in connection therewith, or for the consummation of the Transaction, (b) the
grant by Borrower of the liens granted by it pursuant hereto and the other Loan Documents, (c) the
perfection or maintenance of the liens created hereunder or under any other Loan Document
(including the first priority nature thereof) or (d) the exercise by Lender of its rights hereunder
or under any other Loan Document or lender’s remedies in respect of the Collateral.

Section 5.5 Validity

     The Loan Documents have been duly executed and delivered by and constitute the legal, valid
and binding obligations of Borrower and Guarantor, enforceable in accordance with their respective
terms.

Section 5.6 Financial Position

     The pro forma projected opening unaudited balance sheet of Tempus Acquisition, LLC, dated July
1, 2011, was prepared in accordance with GAAP consistently applied, and fairly presents the
financial condition of Guarantor in respect of its assets and liabilities as of the Effective Date.

Section 5.7 Governmental Regulations

     Neither Borrower nor Guarantor is subject to regulation under the Investment Company Act of
1940, the Federal Power Act, the Public Utility Holding Company Act of 1935, as the same may be
amended from time to time, or any federal or state statute or regulation limiting its ability to
incur Debt.

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Section 5.8 Employee Benefit Plans

     Neither Borrower nor Guarantor maintains any pension, retirement, profit sharing or similar
employee benefit plan that is subject to ERISA other than a plan pursuant to which such entity’s
contribution requirement is made concurrently with the employees’ contributions.

Section 5.9 Securities Activities

     Neither Borrower nor Guarantor is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying any margin stock (as
defined in Regulation U of the Board of Governors of the Federal Reserve System in effect from time
to time) and not more than 25% of the value of the assets of either such entity consists of such
margin stock.

Section 5.10 No Material Adverse Change

     No Material Adverse Change has occurred since the date of the initial filing of the Plan of
Reorganization.

Section 5.11 No Default

     Neither Borrower nor Guarantor is in default under or with respect to, or a party to, any
contractual obligation that could, either individually or in the aggregate, reasonably be expected
to have a Material Adverse Change. No Potential Default has occurred and is continuing or would
result from the consummation of the transactions contemplated by this Loan Agreement or any other
Loan Document.

Section 5.12 Payment of Taxes

     All tax returns and reports required to be filed by Borrower and Guarantor have been timely
filed, or proper extensions for filing have been obtained. All taxes, assessments, fees and other
governmental charges upon Borrower, Guarantor and their properties, assets, income and franchises
(including, without limitation, any part of the Collateral) which are due and payable have been
paid when due and payable, or proper extensions for payment have been obtained, except to the
extent that such taxes, assessments, fees and other governmental charges or the failure to pay the
same would not be material to the respective business, properties, assets, operations, condition
(financial or otherwise) or business prospects of Borrower or Guarantor. Neither Borrower nor
Guarantor has any knowledge of any proposed tax assessment against Borrower or Guarantor or any
part of the Collateral that could be material to its business, properties, assets, operations,
condition (financial or otherwise) or business prospects.

Section 5.13 Litigation

     Attached hereto as Schedule 5.13 is list of all pending, and to the knowledge of
Borrower, threatened actions, suits, proceedings or arbitrations against or affecting Borrower or
Guarantor before any court, governmental agency or arbitrator as of the Effective Date, none of
which may result in a Material Adverse Change. There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of Borrower after due and diligent investigation,

35

 

threatened, at law, in equity, in arbitration or before any governmental authority, by or against
Borrower or Guarantor or against any of their properties or revenues that purport to affect or
pertain to this Loan Agreement, any other Loan Document or the consummation of the transactions
contemplated hereby.

Section 5.14 Ownership of Property; Liens

     Each of Borrower and Guarantor has good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary conduct of its
business, except for such defects in title as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Change. The property of Borrower is subject to
no liens, other than liens of Lender created hereunder or under any other Loan Document.

Section 5.15 Subsidiaries; Equity Interests; Loan Party Information

     As of the Effective Date, Borrower has no subsidiaries, and Guarantor has no subsidiaries
other than those specifically disclosed in Schedule 5.15. Neither Borrower nor Guarantor
has any equity investments in any other corporation or entity other than those specifically
disclosed in Schedule 5.15. All of the outstanding equity interests in Borrower have been
validly issued, are fully paid and non-assessable, and are owned in their entirety by Guarantor.
Set forth on Schedule 5.15 is a complete and accurate list of Borrower and Guarantor,
showing as of the Effective Date the jurisdiction of its organization, the address of its principal
place of business and its U.S. taxpayer identification number. As of the Effective Date, the
Articles of Organization provided to Lender is a true and correct copy of each such document, each
of which is valid and in full force and effect.

Section 5.16 No Burdensome Restrictions

     Neither Borrower nor Guarantor is a party to or bound by any contract or agreement, or subject
to any charter or corporate restriction or any requirement of law, which would reasonably be
expected to result in a Material Adverse Change.

Section 5.17 Full Disclosure

     None of the statements contained herein or in any information, exhibit, report or certificate
furnished by or on behalf of Borrower or Guarantor in connection with the Loan Documents contains
any untrue statement of a material fact, or omits any material fact required to be stated therein
or necessary to make the statements made herein or therein, in light of the circumstances under
which they are made, not misleading; provided, however, that it is recognized by
Lender that projections and forecasts provided and to be provided by Borrower and Guarantor, while
reflecting Borrower’s and Guarantor’s good faith projections and forecasts, based upon methods and
data Borrower and Guarantor believe to be reasonable and accurate, are not to be viewed as facts
and that actual results during the period or periods covered by any such projections and forecasts
may differ from the projected or forecasted results.

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Section 5.18 Compliance with Laws and Regulations

     Each of Borrower and Guarantor is in compliance in all material respects with all Laws and
Regulations, and there are no, nor are there, to the knowledge of Borrower (after due inquiry of
Guarantor), any alleged or asserted, violations of law, regulations, ordinances, codes,
declarations, covenants, conditions, or restrictions of record, or other agreements relating to
Borrower, Guarantor, the Collateral or any part thereof.

Section 5.19 Solvency

     After giving effect to the transactions contemplated hereby, each of Borrower and Guarantor is
Solvent. No petition in bankruptcy has ever been filed against Borrower and Borrower has never
made an assignment for the benefit of creditors or taken advantage of any insolvency act for the
benefit of debtors. Neither Borrower nor Guarantor is contemplating either the filing of a
petition by it under any state or federal bankruptcy or insolvency laws or the liquidation of all
or a major portion of Borrower’s assets or property, and Borrower has no knowledge of any Person
contemplating the filing of any such petition against it.

Section 5.20 Timeshare Interests

     Each Timeshare Loan which is assigned to Lender pursuant to this Loan Agreement shall be an
Eligible Timeshare Loan at the time of assignment. To the best of Borrower’s knowledge, there are
no executory obligations to Obligors to be performed by Borrower or any of its predecessors under
the Purchase Contracts, except for non-delinquent and executory obligations disclosed to Obligors
in their Purchase Contracts.

Section 5.21 Affiliate Debt.

     No Debt of Guarantor held by any Affiliate of Borrower or Guarantor or any other Person that
owns, directly or indirectly, any beneficial or economic ownership interest in Guarantor
(including, for the avoidance of doubt, any Person controlled by Guggenheim Partners, LLC) has a
scheduled maturity earlier than the Maturity Date.

Section 5.22 Security Documents

     The provisions of the Security Documents are effective to create in favor of Lender a legal,
valid and enforceable first-priority lien on all right, title and interest of Borrower in the
Collateral. Except for filings completed on or prior to the Effective Date and as contemplated
hereby and by the Security Documents, no filing or other action will be necessary to perfect or
protect such liens.

Section 5.23 Special Purpose Entity

     Since the date of its formation and as of the Effective Date, Borrower has been and is a
Special Purpose Entity.

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Section 5.24 Embargoed Persons

     None of the funds or other assets of Borrower or Guarantor constitute property of, or are
beneficially owned, directly or indirectly, by any person, entity or government subject to trade
restrictions under U.S. law, including, but not limited to, the International Emergency Economic
Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq.,
and any Executive Orders or regulations promulgated thereunder with the result that the investment
in Borrower or Guarantor (whether directly or indirectly), is prohibited by law or the Loan is in
violation of law (“Embargoed Person”); (b) no Embargoed Person has any interest of any nature
whatsoever in Borrower or Guarantor with the result that the investment in Borrower or Guarantor,
as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of
law; and (c) none of the funds of Borrower or Guarantor have been derived from any unlawful
activity with the result that the investment in Borrower or Guarantor, as applicable (whether
directly or indirectly), is prohibited by law or the Loan is in violation of law.

Section 5.25 Survival and Additional Representations and Warranties

     The representations and warranties and contained in this Article V are in addition to,
and not in derogation of, the representations and warranties contained elsewhere in the Loan
Documents. Borrower agrees that all of the representations and warranties of Borrower set forth in
Article V and elsewhere in this Loan Agreement and in the other Loan Documents shall
survive for so long as any amount remains owing to Lender under this Loan Agreement or any of the
other Loan Documents by Borrower. All representations, warranties, covenants and agreements made
in this Loan Agreement or in the other Loan Documents by Borrower shall be deemed to have been
relied upon by Lender notwithstanding any investigation heretofore or hereafter made by Lender or
on its behalf.

ARTICLE VI

BORROWER’S COVENANTS

Section 6.1 Consideration

     As an inducement to Lender to execute this Loan Agreement and make the Loan, Borrower hereby
covenants that, so long as any amount payable hereunder or under any other Loan Document remains
unpaid, Borrower shall comply (and, where applicable, shall cause Guarantor to comply) with the
covenants set forth in this Article VI.

Section 6.2 Reporting Requirements

     Borrower shall furnish or cause to be furnished to Lender the following notices and reports:

     (a) Monthly Reports. On or before the 30th day of each calendar month, the
following: (i) monthly GAAP financial statements of Borrower and Guarantor as of the end of the
prior calendar month, and (ii) monthly mortgage receivables flash sheets as of the end of the prior
calendar month.

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     (b) Quarterly Financial Reports. As soon as practicable and in any event within 60
days after the end of each fiscal quarter of Borrower (other than the last quarter of any fiscal
year, which shall be delivered within 75 days of such fiscal quarter), the following: (i) unaudited
financial statements of Borrower (or, if Borrower’s financial statements are included in the
consolidated financial statement of Guarantor, then of Guarantor) and of Guarantor, on a fully
consolidated basis, which financial statements must include (A) a balance sheet as at the end of
such fiscal quarter and (B) statements of income and cash flow for the period from the beginning of
the then current fiscal year to the end of such fiscal quarter and setting forth in comparative
form figures for the corresponding period of the preceding fiscal year, all in reasonable detail
and in accordance with GAAP consistently applied and certified by the Treasurer, Chief Accounting
Officer or Chief Financial Officer of Borrower (or, as applicable, of Guarantor), to fairly present
the financial condition of Borrower (or, as applicable, of Guarantor), on a fully consolidated
basis as at the end of such fiscal quarter and the results of the operations of Borrower (or, as
applicable, of Guarantor), on a fully consolidated basis for the period ending on such date; and
(ii) if requested by Lender, a summary report of accounts payable aging;

     (c) Annual Financial Statements. As soon as practicable and in any event within 120
days after the end of each fiscal year of Tempus Acquisition, LLC, audited financial statements of
Tempus Acquisition, LLC, on a fully consolidated basis (which financial statements must include a
balance sheet of Tempus Acquisition, LLC, as the end of such fiscal year, and statements of income,
shareholders’ equity and cash flow of Tempus Acquisition, LLC, for such fiscal year, together with
an accompanying unaudited consolidating balance sheet and income statement of Borrower and Mystic
Dunes, LLC), and setting forth in each case in comparative form figures for the preceding fiscal
year, all in reasonable detail and in accordance with GAAP consistently applied accompanied by a
report and opinion of an independent certified public accountant of nationally recognized standing
reasonably acceptable to Lender, which report and opinion shall be prepared in accordance with
generally accepted auditing standards and shall not be subject to any “going concern” or like
qualification or exception or any qualification or exception as to the scope of such audit.

     (d) Timeshare Association Financial Statements. Annual financial statements (within
150 days of the end of the Timeshare Association’s fiscal year) of the Timeshare Association. Such
financial statements shall be prepared in accordance with GAAP and audited, as required by Section
721.13(3)(e), Florida Statutes.

     (e) Certificates; Other Information.

     (1) Concurrently with the delivery of the financial statements referred to in
Section 6.2(c), a certificate of its independent certified public accountants
certifying such financial statements;

     (2) concurrently with the delivery of the financial statements referred to in
Sections 6.2(a), (b) and (c), a duly completed certificate of
compliance, in form and substance satisfactory to Lender, signed by the chief executive
officer, chief financial officer, treasurer or chief accounting officer of Borrower or
Guarantor, as applicable;

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     (3) promptly after the same are available, copies of any detailed audit reports,
management letters or recommendations submitted to the board of directors (or the audit
committee of the board of directors) of Borrower or Guarantor by independent accountants in
connection with the accounts or books of such Persons, or any audit of any of them;

     (4) promptly after the same are available, copies of each annual report, proxy or
financial statement or other report or communication sent to the equity holders of Borrower
and Guarantor;

     (5) promptly after the furnishing thereof, copies of any statement or report furnished
to any holder of debt securities of Guarantor pursuant to the terms of any indenture, loan
or credit or similar agreement and not otherwise required to be furnished to Lender
hereunder; and

     (6) as soon as available, but in any event within 30 days after the end of each fiscal
year of Borrower, a report summarizing the insurance coverage (specifying type, amount and
carrier) in effect for Borrower and containing such additional information as Lender may
reasonably specify.

     (f) Notice of Material Adverse Change. As soon as practicable after its occurrence,
written notice and a description of any matter which has resulted, or may result, in a Material
Adverse Change.

     (g) Notice of Defaults or Potential Defaults; Default Under Other Credit Facility. As
soon as practicable and in any event within five (5) Business Days after Borrower has knowledge of
the occurrence of any Potential Default (however described) or Event of Default hereunder, written
notice and a description of such Potential Default or Event of Default and the action which
Borrower proposes to take with respect thereto. As soon as practicable and in any event within
five (5) Business Days after Borrower has knowledge of the occurrence of any material event of
default under any loan or credit agreement relating to Debt of Guarantor, Borrower shall provide
Lender with written notice of such event of default together with a description of any cure periods
and Guarantor’s proposal for curing the same.

     (h) Notice of Litigation. As soon as practicable and in any event within five (5)
Business Days after institution thereof, or knowledge thereof, written notice and a description of
any material adverse litigation, action or proceeding commenced against Borrower and any adverse
determination thereof.

          (1)

     (i) Other Information. Such other information respecting the business, properties,
assets, operations and condition, financial or otherwise, of Borrower and Guarantor, as Lender may
from time to time reasonably request.

Section 6.3 Borrower’s Operations and Management

     Borrower shall (and shall cause Guarantor to):

40

 

     (a) Compliance with Laws, Etc. Comply in all material respects, with all applicable
laws, rules, regulations and orders of any governmental authority, including but not limited to the
Laws and Regulations, the noncompliance with which may result in a Material Adverse Change.

     (b) Payment of Taxes and Claims. Pay all taxes, assessments and other governmental
charges imposed upon it or any of its properties or assets or in respect of any of its franchises,
business, income or profits before any penalty accrues thereon.

     (c) Maintenance of Properties; Books and Records. Maintain or cause to be maintained:

     (1) in good repair, working order and condition all properties and assets material to
the continued conduct of the business of Borrower, and from time to time make or cause to be
made all necessary repairs, renewals and replacements thereof; and

     (2) proper books, records and accounts in which full, true and correct entries in
accordance with GAAP consistently applied are made of all financial transactions and matters
involving its assets and business.

     (d) Change in Nature of Business. Make no material change in the nature of its
businesses as carried on at the date hereof.

     (e) Maintenance of Existence. Maintain and preserve its existence and all rights,
privileges, qualifications, permits, licenses, franchises and other rights material to its
business.

     (f) Change in State of Organization or Location of Executive Offices. Make no change
to its state of organization or the location of its executive offices without given Lender at least
30 days’ prior written notice.

     (g) Transactions with Affiliates. Not enter into any transaction of any kind with any
Affiliate, whether or not in the ordinary course of business, other than on fair and reasonable
terms substantially as favorable to Borrower as would be obtainable by Borrower at the time in a
comparable arm’s length transaction with a Person other than an Affiliate.

     (h) Change in Control. Not permit a Change of Control to occur or exist, or otherwise
merge, consolidate, or reorganize, or reclassify its equity interests in a way that results in a
Change of Control.

     (i) Timeshare Collateral.

     (1) Inspection. Borrower will at its expense permit (or cause its Affiliate to
permit) Lender and its representatives, at all reasonable times and upon reasonable prior
notice to Borrower, to inspect audit and copy Borrower’s books and records.

     (2) No Modification of Collateral or Payments by Borrower. Subject to
Section 6.4 and the definition of Eligible Timeshare Loan, Borrower will not cancel
or materially modify, or consent to or acquiesce in any material modification (including,
without limitation, any change in the interest rate or amount, frequency or number of

41

 

payments) to any Timeshare Loan which constitutes part of the Collateral; or waive the
timely performance of the obligations of the Obligor under any such Timeshare Loan or its
security; or release the security for any such Timeshare Loan. Borrower will not pay or
advance directly or indirectly for the account of any Obligor any sum required to be
deposited or owing by the Obligor either under any Purchase Contract or under any Timeshare
Loan which constitutes part of the Collateral. Without the consent of Lender, Borrower
shall not take any action, or fail to take any action (or permit any of its Affiliates to
take any action or fail to take any action), if such action or failure to take action would
interfere with the enforcement of Borrower’s rights under the Purchase Contracts or
Timeshare Loans included in the Collateral.

     (3) Collection of Collateral. Borrower will undertake the diligent and timely
collection of amounts delinquent under each Timeshare Loan which constitutes part of the
Collateral and will bear the entire expense of such collection. During each calendar month,
Borrower shall commence, and diligently prosecute, foreclosure or other applicable recovery
actions on the Initial Defaulted Timeshare Loans in an amount not less than the Minimum
Foreclosure Amount. Lender shall have no obligation to undertake any action to collect
under any Timeshare Loan.

Section 6.4 Modifications

     (a) Borrower (or Servicing Agent on Borrower’s behalf) shall be entitled to amend or modify
any Timeshare Loan which constitutes part of the Collateral only as follows (and no other
amendments or modifications of the Timeshare Loans shall be permitted):

     (1) to ensure compliance with the Soldiers’ and Sailors’ Civil Relief Act of 1940, as
amended, with respect to such Timeshare Loan;

     (2) if any installment due with respect to such Timeshare Loan has become and remains
more than 60 days contractually past due; or

     (3) to permit a change in the amortization program as otherwise approved by Lender in
writing (which approval may be granted or withheld in Lender’s sole discretion).

     (b) On or before the 15th day after the end of each month, Borrower (or Servicing Agent on its
behalf) shall give to Lender a written report as to all Timeshare Loans that have been amended or
modified. Such report shall, without limitation, summarize all amendments and modifications that
occurred during the immediately preceding month (including the number and type thereof) and all
amendments and modifications that have occurred since the Effective Date. Such reports shall be
certified correct by a Vice President of Borrower.

     (c) Borrower acknowledges that the above authorization by Lender does not modify or alter the
conditions of an Eligible Timeshare Loan.

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Section 6.5 No Transfers

     Borrower will not, unless Lender otherwise consents in writing, make or permit any Transfer,
except for Transfers permitted under the definition of “Transfer” herein.

Section 6.6 Preservation of Security Interests

     Borrower shall preserve and undertake all actions necessary to maintain the security interests
granted to Lender under the Security Documents in full force and effect (including the priority
thereof). Borrower shall promptly upon the request of Lender and at Borrower’s expense, execute
and deliver, or cause the execution and delivery of, and thereafter register, file or record in
each appropriate governmental office, any document or instrument supplemental to or confirmatory of
the Security Documents or otherwise necessary or reasonably deemed by Lender to be desirable for
the creation or perfection of the liens and security interests purported to be created by the
Security Documents. Borrower shall not permit the Lien of the Security Documents not to constitute
a valid perfected security interest in the Collateral securing amounts due to Lender as set forth
in this Loan Agreement or take or fail to take any action that would result in Lender not having
exclusive and continuous “control” over the Collateral (within the meaning of Articles 8 and 9 of
the UCC).

Section 6.7 Special Purpose Entity

     Borrower shall not take any action, or permit any action to be taken, that would cause
Borrower not to meet the definition of Special Purpose Entity in any respect.

Section 6.8 Prohibition of Fundamental Changes; Sale of Assets, etc.

     (a) Except as otherwise provided in the Loan Documents, Borrower shall not (i) enter into any
transaction of merger or consolidation, change its form of organization or its business, or
liquidate, wind up or dissolve itself, or suffer any liquidation or dissolution, (ii) convey,
sell, lease, assign, transfer or otherwise dispose of any of its property, assets or business,
whether now owned or hereafter acquired or (iii) acquire any equity interest in any Person.

     (b) Without the prior consent of Lender (such consent not to be unreasonably withheld),
Borrower shall not change its name, its principal place of business or its fiscal year.

     (c) Other than to Guarantor, Borrower shall not issue any shares of capital stock or other
equity interest of Borrower, nor any options, warrants, rights or notes representing any obligation
of or right with respect to such Borrower.

     (d) Borrower shall not amend, modify or restate its Articles of Organization.

Section 6.9 Distributions; Restricted Payments

     Borrower shall not, directly or indirectly, make or declare any dividend or other distribution
(in cash, property or obligation) on, or other payment on account of, any interest in Borrower or
any payment of principal or interest in respect of any Debt to a Person other than

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Lender unless all payment obligations of Borrower that are then due and payable under this
Loan Agreement and the other Loan Documents have been paid in full.

Section 6.10 Liens

     Borrower shall not create, incur, assume or permit to exist any lien upon or with respect to
any of its property, assets or revenues, whether now owned or hereafter acquired, except for liens
created pursuant to the Security Documents.

Section 6.11 Indebtedness; Guarantees

     Except for the Loan incurred and any other amounts owed hereunder, Borrower shall not create,
incur, assume or permit to exist any Debt. Borrower shall not directly or indirectly create,
assume, be or become liable with respect to any guarantee.

Section 6.12 Accounts

     Borrower shall not cause to be maintained any bank accounts other than the accounts set forth
in the Servicing Agreement, together with such other accounts as may be specifically required by
Lender.

Section 6.13 Further Assurances

     Borrower shall execute and deliver, or cause the execution and delivery, at any time and from
time to time, of any and all instruments, agreements and documents, and will take such other
action, or cause such other action to be taken, as Lender reasonably requires to maintain, perfect
or insure Lender’s security provided for under the Loan Documents.

Section 6.14 Covenants Not Exclusive

     The covenants contained in this Article VI are in addition to, and not in derogation of, the
covenants contained elsewhere in the Loan Documents.

ARTICLE VII

DEFAULT

Section 7.1 Events of Default

     The occurrence and continuance of any of the following events constitutes an “Event of
Default” hereunder:

     (a) Borrower fails to pay any principal on the Loan when due, whether at stated maturity, as a
result of a mandatory prepayment requirement, upon acceleration or otherwise, or Borrower fails to
pay when due any interest, fees or other amounts payable hereunder (including without limitation
the Initial Defaulted Timeshare Loans Release Fee) or under the other Loan Documents.

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     (b) Any representation or warranty made by Borrower or Guarantor herein or in any other Loan
Document, or in any certificate or document delivered to Lender by Borrower or Guarantor pursuant
to any Loan Document, is at any time incorrect in any material respect.

     (c) Borrower or Guarantor fail to perform or observe any term, covenant or agreement contained
in this Loan Agreement or any other Loan Document (other than a default or violation referred to
elsewhere in this Section 7.1), and such failure remains unremedied for 30 days after
notice thereof from Lender to Borrower; provided that in the event Borrower or Guarantor
commences and is diligently pursuing to completion action to cure the failure, such 30 day period
may be extended for such period of time as is necessary to cure the failure, but in no event longer
then 120 days from the date of Lender’s notice; provided further, however,
that in the event (i) Lender reasonably determines that the failure to immediately declare an Event
of Default could materially and adversely harm the rights of Lender hereunder or under any other
Loan Document, or the rights of Lender with respect to the Collateral, or (ii) Lender reasonably
determines that the failure to perform or observe the terms of this Loan Agreement or any other
Loan Document cannot be remedied with the passage of 120 days, then Lender may declare an immediate
Event of Default in its notice given pursuant to this Section 7.1(c).

     (d) Borrower or Guarantor asserts the invalidity or unenforceability of any Loan Document or
any Loan Document is adjudicated to be invalid or unenforceable in any material respect.

     (e) Any Security Documents, for any reason, ceases to create a valid and perfected first
priority lien on or in the Collateral or other collateral relating thereto as described in the Loan
Documents, or Borrower so states in writing.

     (f) The dissolution or winding up Borrower or Guarantor.

     (g) A default in Borrower’s performance of its obligations under the Loan Documents as set
forth in Section 3.2.

     (h) Any Transfer occurs which has not been consented to in writing by Lender (except for
Transfers permitted under the definition of “Transfer” herein).

     (i) Guarantor fails to comply with any of the financial covenants set forth in Section 2(e) of
the Guaranty.

     (j) A Material Adverse Change occurs.

     (k) A material event of default occurs under any loan or credit agreement relating to Debt in
excess of $500,000 of Guarantor.

     (l) Any judgment or order for the payment of money in excess of $500,000, singularly or in the
aggregate, is rendered against Borrower or Guarantor, and either (i) enforcement proceedings have
been commenced by any creditor upon such judgment, or (ii) there is a period of 15 days during
which a stay of enforcement of such judgment or order, by reason of a pending appeal, bond or
otherwise, is not in effect.

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     (m) Borrower or Guarantor fails to pay any Debt (other than the Debt incurred by Borrower and
Guarantor with respect to the Loans, the Events of Default with respect to which are set forth
elsewhere in this Section 7.1), or any interest or premium thereon, when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) and such failure
continues after the applicable grace period, if any, specified in the agreement or instrument
relating to such Debt; any other default under any agreement or instrument relating to any such
Debt, or any other event, occurs and continues after the applicable grace period, if any, specified
in such agreement or instrument, if the effect of such failure to pay, default or event results in
the acceleration, or permits the acceleration of, the maturity of such Debt; or any such Debt is
declared to be due and payable, or is required to be prepaid (other than by a regularly scheduled
required prepayment) prior to the stated maturity thereof; provided however that none of the
foregoing events or inactions will constitute an Event of Default unless such event or inaction
could result in a Material Adverse Change.

     (n) Borrower or Guarantor generally does not pay its Debts as such Debts become due, or admits
in writing its inability to pay its Debts generally, or a Bankruptcy Action is instituted by or
against Borrower or Guarantor and, in the case of any such Bankruptcy Action instituted against it
(but not instituted by it), either such proceeding remains undismissed or unstayed for a period of
30 days (whether or not consecutive), or any of the actions sought in such proceeding (including,
without, limitation, the entry of an order for relief against, or the appointment of a receiver,
trustee, custodian or other similar official for, it or for any substantial part of its property)
occur; or Borrower or Guarantor takes any action to authorize any of the actions set forth above.

     (o) There occurs any attachment, levy, execution or other judicial seizure of any portion of
the Collateral, or any other collateral provided by Borrower under any of the Loan Documents, or
any substantial portion of the other assets of Borrower, which is not released, expunged,
discharged or dismissed prior to the earlier of (i) 20 days after such attachment, levy execution
or seizure, or (ii) the sale of the assets affected thereby.

     (p) At any time, funds on deposit in the Collection Account are used by or on behalf of
Borrower other than for the purposes expressly specified in this Loan Agreement or are withdrawn by
or at the direction of Borrower other than as expressly permitted pursuant to this Loan Agreement
or the Servicing Agreement.

Section 7.2 Remedies

     At any time after an Event of Default has occurred and while it is continuing, Lender may but
without obligation, in addition to the rights and powers granted elsewhere in the Loan Documents
and not in limitation thereof, do anyone or more of the following:

     (a) Declare the unpaid principal amount of the Loan, together with all other sums owing by
Borrower to Lender in connection with the Loan, all interest accrued and unpaid thereon, and all
other amounts owing or payable hereunder or under any other Loan Document in connection therewith
to be immediately due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by Borrower.

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     (b) With respect to the Collateral, (i) after any applicable delinquency on a Purchase
Contract, institute collection, foreclosure and other enforcement actions against Obligors and
other Persons obligated on the Collateral, (ii) enter into modification agreements and make
extension agreements with respect to payments and other performances, (iii) release Persons liable
for performance, (iv) settle and compromise disputes with respect to payments and performances
claimed due, all without notice to Borrower, without being called to account therefor by Borrower
and without relieving Borrower from the performance of its obligations under the Loan Documents,
and (v) receive, collect, open and read all mail of Borrower for the purpose of obtaining all items
pertaining to the Collateral.

     (c) Proceed to protect and enforce its rights and remedies under the Loan Documents and to
foreclose or otherwise realize upon its security for the performance of the obligations arising
under the Loan Documents, or to exercise any other rights and remedies available to it at law, in
equity or by statute.

     (d) Request and have appointed a Receiver with respect to Borrower and/or the Collateral, and
to that end, Borrower hereby consents to the appointment of a Receiver by Lender in any action
initiated by Lender pursuant to this Loan Agreement, and Borrower waives any notice and posting of
a bond in connection therewith.

     (e) Any and all other remedies available at law or in equity.

For the purpose of carrying out the provisions and exercising the rights, powers and privileges
granted by Section 7.2(b), Borrower hereby unconditionally and irrevocably constitutes and
appoints Lender its true and lawful attorney-in-fact to enter into such contracts, perform such
acts and incur such liabilities as are referred to in said Section in the name and on behalf of
Borrower; provided, however, that Lender shall not utilize its power of attorney to
take any action including that which is described in Section 7.2(b) unless an Event of
Default exists. This power of attorney is coupled with an interest.

     All remedies of Lender provided for herein and in any other Loan Documents are cumulative and
shall be in addition to all other rights and remedies provided by law or in equity. The exercise
of any right or remedy by Lender hereunder shall not in any way constitute a cure or waiver of
default hereunder or under any other Loan Document or invalidate any act done pursuant to any
notice of default, or prejudice Lender in the exercise of any of its rights hereunder or under any
other Loan Document. If Lender exercises any of the rights or remedies provided in this
Article VII, that exercise shall not make Lender, or cause Lender to be deemed to be, a
partner or joint venturer of Borrower. No disbursement of funds in respect of Lender’s exercise of
its rights hereunder shall cure any default of Borrower, unless Lender agrees otherwise in writing
in each instance.

     Upon the occurrence of any Event of Default, all of Borrower’s obligations under the Loan
Documents may become immediately due and payable without notice of presentment or demand for
payment, protest or notice of nonpayment or dishonor, at Lender’s option, exercisable in its sole
discretion. Notwithstanding the foregoing, if an Event of Default referred to in Section
7.1(n) shall occur with respect to Borrower or Guarantor, all of Borrower’s obligations under
the Loan Documents shall be deemed to have become immediately due and

47

 

payable, automatically and without notice of presentment or demand for payment, protest or
notice of nonpayment or dishonor.

Section 7.3 Application of Proceeds During an Event of Default

     Notwithstanding anything in the Loan Documents to the contrary, while an Event of Default
exists, any cash received and retained by Lender in connection with the Collateral (and not
otherwise payable to the Servicing Agent pursuant to the Servicing Agreement) may be applied to
payment of Borrower’s obligations under the Loan Documents as Lender in its reasonable discretion
may determine; provided, that notwithstanding the existence of any Event of Default, for so
long as the Servicing Agreement has not been terminated, the Servicing Agent shall remain entitled
to receive 50% of all Customer Service Fees collected during the related Interest Period, to the
extent not already retained by Servicing Agent pursuant to the Servicing Agreement.

Section 7.4 Uniform Commercial Code Remedies; Sale; Assembly of Collateral

     (a) UCC Remedies; Sale of Collateral. Lender shall have all of the rights and
remedies of a secured party under the Uniform Commercial Code of the State of New York and all
other rights and remedies accorded to a Secured Party at equity or law. Any notice of sale or
other disposition of the Collateral given not less than 10 days prior to such proposed action in
connection with the exercise of Lender’s rights and remedies shall constitute reasonable and fair
notice of such action. Lender may postpone or adjourn any such sale from time to time by
announcement at the time and place of sale stated on the notice of sale or by announcement of any
adjourned sale, without being required to give a further notice of sale. Any such sale may be for
cash or, unless prohibited by applicable law, upon such credit or installment as Lender may
determine. Borrower shall be credited with the net proceeds of such sale only when such proceeds
are actually received by Lender in good current funds. Despite the consummation of any such sale,
Borrower shall remain liable for any deficiency on Borrower’s obligations under the Loan Documents
which remains outstanding following such sale. All net proceeds recovered pursuant to a sale shall
be applied in accordance with the provisions of Section 7.5.

     (b) Lender’s Right to Execute Conveyances. When an Event of Default exists, Lender
may, in the name of Borrower or in its own name, make and execute all conveyances, assignments and
transfers of the Collateral sold in connection with the exercise of Lender’s rights and remedies
under this Section 7.4; and Lender is hereby appointed Borrower’s attorney-in-fact for this
purpose; provided, however, that Lender shall not utilize its power of attorney to
take any action including that which is described in this Section 7.4(b) unless an Event of
Default exists.

     (c) Obligation to Assemble Collateral. Upon request of Lender when an Event of
Default exists, Borrower shall assemble the Collateral and make it available to Lender at a time
and place designated by Lender, if it is not already in Lender’s possession.

Section 7.5 Application of UCC Sale Proceeds

     Should Lender exercise the rights and remedies specified in Section 7.4, unless
otherwise required by applicable law, any proceeds received thereby shall be first applied to pay
the costs

48

 

and expenses, including reasonable attorneys’ fees, incurred by Lender as a result of the
Event of Default. The remainder of any proceeds, net of Lender’s costs and expenses shall be
applied to the satisfaction of the obligations under the Loan Documents as Lender in its discretion
may determine until fully satisfied with any excess paid over to Borrower.

Section 7.6 Authorization to Apply Assets to Payment of Loan

     Borrower hereby authorizes Lender, following the occurrence of an Event of Default, without
notice or demand, to apply any property, balances, credits, accounts or moneys of Borrower or
Guarantor then in the possession of Lender, or standing to the credit of Borrower or Guarantor, to
the payment of the Loans.

Section 7.7 Lender’s Right to Perform

     Lender may, at its option, and without any obligation to do so, pay, perform and discharge any
and all obligations agreed to be paid or performed in the Loan Documents by Borrower or any surety
for the performance of their obligations under the Loan Documents if

     (a) such Person fails to do so; and

     (b) (i) an Event of Default exists and at least five (5) Business Days’ notice has been given
to such Person of Lender’s intention to take such action, (ii) the action taken by Lender involves
obtaining insurance which such Person has failed to maintain in accordance with the Loan Documents
or to deliver evidence thereof, or (iii) in the opinion of Lender, such action must be taken
because an emergency exists or to preserve any of the Collateral or its value.

     For such purposes Lender may use the proceeds of the Collateral. All amounts expended by
Lender in so doing or in exercising its remedies under the Loan Documents following an Event of
Default shall become part of the obligations arising under the Loan Documents, shall be immediately
due and payable by Borrower to Lender upon demand, and shall bear interest at the Default Rate from
the dates of such expenditures until paid.

Section 7.8 Waiver of Marshalling

     Borrower, for itself and for all who may claim through or under them, hereby expressly waives
and releases all right to have the Collateral, or any part of the Collateral, marshaled on any
foreclosure, sale or other enforcement of Lender’s rights and remedies.

ARTICLE VIII

MISCELLANEOUS

Section 8.1 Successors and Assigns; Limited Assignment by Borrower or by Lender.

     (a) The provisions of this Loan Agreement will be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, provided that neither
Borrower nor Guarantor may assign or transfer any of its rights or obligations under this

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Loan Agreement or any of the other Loan Documents without the prior written consent of Lender,
except in connection with a Transfer permitted under the definition of “Transfer” herein.

     (b) Lender, acting solely for this purpose as an agent of Borrower, shall maintain at its
office a record of each assignment of all or any portion of the Loan, and a register for the
recordation of the names and addresses of all assignees of interests in the Loan, and principal
amounts (and related interest amounts) of the Loan and other amounts due under Section 2.6,
owing to, Lender pursuant to the terms hereof from time to time (the “Register”). The
entries in the Register shall be conclusive, absent manifest error, and Borrower and Lender shall
treat each Person whose name is recorded in the Register pursuant to the terms hereof as a “Lender”
hereunder for all purposes of this Agreement to the extent of its pro rata share in the Loan,
notwithstanding notice to the contrary. The Register shall be available for inspection by Borrower
at any reasonable time and from time to time upon reasonable prior notice.

Section 8.2 Notices

     All notices, requests and demands to be made hereunder to the parties hereto must be in
writing (at the addresses set forth below) and may be given by any of the following means:

     (1) personal delivery;

     (2) overnight delivery by a reputable overnight courier service;

     (3) electronic communication, whether by telex, telegram or telecopying (if confirmed
in writing sent by registered or certified, first class mail, return receipt requested); or

     (4) registered or certified, first class mail, return receipt requested.

Any notice, demand or request sent pursuant to the terms of this Loan Agreement will be deemed
received (i) if sent pursuant subsection (1), upon such personal delivery, (ii) if sent pursuant to
subsection (2), on the next Business Day following delivery to the overnight courier service, (iii)
if sent pursuant to subsection (3), upon dispatch if such dispatch occurs between the hours of 9:00
a.m. and 5:00 p.m. (recipient’s time zone) on a Business Day, and if such dispatch occurs other
than during such hours, on the next Business Day following dispatch and (iv) if sent pursuant to
subsection (4), 3 days following deposit in the mail.

	 	 	 	 	 

	 	 	The addresses for notices are as follows:
	 
	 	 	 	 
	 

	 	To Lender:
	 	Resort Finance America, LLC
	 

	 	 	 	100 Crescent Court, Suite 260
	 

	 	 	 	Dallas, Texas 75201
	 

	 	 	 	Attention: Chief Risk Officer, Secretary
	 

	 	 	 	Telephone No.: (469) 554-7900
	 

	 	 	 	Telecopier No.: (214) 224-0165
	 
	 	 	 	 
	 

	 	To Borrower:
	 	Mystic Dunes Receivables, LLC
	 

	 	 	 	10615 Park Run Drive
	 

	 	 	 	Las Vegas, NV 89144
	 

	 	 	 	Attn: General Counsel
	 

	 	 	 	Telephone: (702) 823-7550
	 

	 	 	 	Telecopy: (702) 765-8615

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	 	With a copy to:
	 	Diamond Resorts Financial Services, Inc.
	 

	 	 	 	10600 West Charleston Blvd.
	 

	 	 	 	Las Vegas, NV 89135
	 

	 	 	 	Attn: VP, Client and Loan Services and
	 

	 	 	 	General Counsel
	 

	 	 	 	Telephone: (702) 823-7350
	 

	 	 	 	Telecopy: (702) 804-8632
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Katten Muchin Rosenman LLP
	 

	 	 	 	525 West Monroe Street, Suite 1900
	 

	 	 	 	Chicago, IL 60661
	 

	 	 	 	Attn: Ann Marie Sink
	 

	 	 	 	Telephone: (312) 902-5200
	 

	 	 	 	Telecopy: (312) 577-8907

The failure to provide courtesy copies will not affect or impair Lender’s rights and remedies
against Borrower. Such addresses may be changed by notice to the other parties given in the same
manner as provided above.

Section 8.3 Borrower’s Representative

     Borrower hereby designates the following natural persons as its representatives and the
representative of Guarantor for purposes of (i) making all decisions with respect to the Loans and
the Loan Documents, (ii) delivering all notices, certificates and other documents required by the
terms of the Loan Documents or requested by Borrower or Guarantor in connection with the Loans and
(iii) taking all other actions requested by Borrower or Guarantor in connection with the Loans and
the Loan Documents:

Stephen J. Cloobeck

David F. Palmer

Elizabeth Brennan

David Womer

Yanna Huang

In taking action pursuant to the terms of this Loan Agreement and the other Loan Documents, Lender
shall be entitled to rely, without further investigation, upon any notice, certificate or other
document delivered in writing and executed or signed by such representative of Borrower and
Guarantor. In addition, Lender may, at its option, refuse to take action in the event a notice,

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certificate or other document is delivered to Lender which has not been executed or delivered by
such representative of Borrower and Guarantor.

Section 8.4 Amendments, Changes, Waivers, Discharge and Modifications in Writing

     No provision of this Loan Agreement or any of the other Loan Documents may be amended,
changed, waived, discharged or modified except by an instrument in writing signed by Lender and
Borrower.

Section 8.5 No Waiver; Remedies Cumulative

     The deemed disbursement of the Loan shall not have the effect of precluding Lender from
thereafter declaring an Event of Default (however described) under this Loan Agreement or any other
Loan Document. No failure or delay on the part of Lender in the exercise of any power, right or
privilege hereunder or under this Loan Agreement or any other Loan Document will impair such power,
right or privilege or be construed to be a waiver of any Event of Default (however described) or
acquiescence therein, nor will any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof, or of any other right, power or privilege. Except
as specifically provided herein, all rights and remedies existing under this Loan Agreement and the
other Loan Documents are cumulative to and not exclusive of any rights or remedies otherwise
available.

Section 8.6 Costs, Expenses and Taxes

     (a) Borrower agrees to pay the costs, and all expenses incurred by Lender in connection with
the preparation, execution, delivery, administration, modification and amendment of this Loan
Agreement, the other Loan Documents and any other documents to be delivered hereunder;
provided, that the obligation of Borrower to reimburse Lender for such expenses incurred
solely since February 17, 2011, through the closing of the transactions contemplated by this
Agreement shall not exceed $250,000 (the “Cap”). The costs and expenses to be paid by
Borrower shall include the following (subject, solely in the case of expenses incurred since
February 17, 2011, through the closing of the transactions contemplated by this Agreement, to the
Cap):

     (1) the reasonable fees and out-of-pocket expenses of counsel for Lender with respect
thereto and with respect to advising Lender as to its rights and responsibilities under this
Loan Agreement and the other Loan Documents;

     (2) any and all stamp and other taxes payable or determined to be payable in connection
with the execution and delivery of this Loan Agreement, the other Loan Documents and the
other documents to be delivered hereunder;

     (3) any and all fees and costs associated with the assignment, custody and servicing of
the Collateral inclusive of the fees and costs described in this Loan Agreement;

     (4) any and all reasonable travel expenses of Lender’s employees in relation to the
Loans;

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     (5) any and all reasonable expenses of Lender and its representatives incurred in
connection with any inspection of the books and records of Borrower or review of the
Collateral upon the occurrence and during the continuance of any Potential Default or Event
of Default (provided, that any such expenses incurred when no Potential Default or
Event of Default has occurred and is continuing shall be paid by Lender); and

     (6) any and all other reasonable costs and expenses incurred by Lender in relation to
the Loans.

     (b) In addition to the reimbursement obligations set forth in Section 8.6(a), and
without regard to any monetary cap, Borrower further agrees to pay all costs and expenses of
Lender, including, without limitation, reasonable counsel fees and expenses, court costs and all
litigation expenses (including, but not limited to, reasonable expert witness fees, document
copying expenses, exhibit preparation, courier expenses, postage expenses and communication
expenses) in connection with the enforcement of this Loan Agreement, the other Loan Documents and
any other documents delivered hereunder, including, without limitation, costs and expenses incurred
in connection with any bankruptcy, insolvency, liquidation, reorganization, moratorium or other
similar proceeding, or any refinancing or restructuring in the nature of a “workout” of the Loan
Documents and any other documents delivered by Borrower and Guarantor related thereto.

     (c) Payment from Borrower of amounts due pursuant to this Section 8.6 will be due 10
days after it has received from Lender written notice of the nature of the item for which payment
is required and the amount due.

Section 8.7 Disclaimer by Lender; No Joint Venture

     Borrower acknowledges, understands and agrees as follows:

     (1) The relationship between Borrower and Lender is, and will at all times remain,
solely that of borrower and lender, and Lender neither undertakes nor assumes any
responsibility for or duty to Borrower, Guarantor or any Affiliate to select, review,
inspect, supervise, pass judgment upon or inform Borrower of the quality, adequacy or
suitability of any matter or thing submitted to Lender for its approval.

     (2) Lender shall under no circumstance be deemed to be in a relationship of confidence
or trust or a fiduciary relationship with Borrower or its Affiliates, or to owe any
fiduciary duty to Borrower or its Affiliates. Lender owes no duty of care to protect
Borrower, Guarantor, or any Affiliate or any other Person against negligent, faulty,
inadequate or defective building or construction.

     (3) Borrower is not and will not be an agent of Lender for any purpose. Lender is not
a joint venture partner with Borrower in any manner whatsoever. Approvals granted by Lender
for any matters covered under this Loan Agreement are to be narrowly construed to cover only
the parties and facts identified in any such approval; Borrower and its Affiliates shall
rely entirely upon their own judgment with respect to such matters, and any review,
inspection, supervision, exercise of judgment or supply of information undertaken or assumed
by Lender in connection with such matters is solely

53

 

for the protection of Lender and neither Borrower nor any other Person is entitled to
rely thereon.

Section 8.8 Indemnification

     Borrower agrees to protect, indemnify, defend and hold harmless each Indemnified Party from
and against any and all claims, damages, losses, liabilities, obligations, penalties, actions,
judgments, suits, costs, disbursements and expenses (including, without limitation, reasonable fees
and expenses of counsel and consultants and allocated costs of internal counsel) that may be
incurred by or asserted against any Indemnified Party, in each case arising out of or in connection
with or related to any of the following:

     (1) the Loan, this Loan Agreement or any other Loan Document;

     (2) the Timeshare Project;

     (3) the use of proceeds of the Loan; or

     (4) the failure of Borrower, Guarantor or any other party to the Loan Documents (other
than Lender) to comply fully with any and all laws applicable to it;

whether or not an Indemnified Party is a party thereto, except to the extent such claims, damages,
losses, liabilities, obligations, penalties, actions, judgments, suits, costs, obligations,
penalties, disbursements and expenses are found in a final non appealable judgment by a court of
competent jurisdiction to have resulted from the gross negligence or willful misconduct of the
Indemnified Party. Without prejudice to the survival of any other agreement of Borrower hereunder,
the agreements and obligations of Borrower contained in this Section 8.8 will survive the
termination of this Loan Agreement and the other Loan Documents and the payment in full of the
Loans.

Section 8.9 Third-Party Fees

     Borrower represents and warrants to Lender that it has not made any commitment or taken any
action that could result in a claim for any broker’s, finder’s, consultant’s or other similar fees
or commissions with respect to the Loan as contemplated by this Loan Agreement. Borrower agrees to
indemnify Lender and save and hold Lender harmless from and against all claims of any Person or
with whom it has initiated contact with respect to the Loans who claims a right to any such
broker’s, finder’s, consultant’s or other similar fees or commissions in connection with the Loan,
whether or not such claims are valid.

Section 8.10 Titles and Headings

     The titles and headings of sections of this Loan Agreement are intended for convenience only
and are not in any way to affect the meaning or construction of any provision of this Loan
Agreement.

54

 

Section 8.11 Counterparts

     This Loan Agreement may be executed in any number of counterparts, each of which will be
deemed an original and all of which will constitute one and the same agreement with the same effect
as if all parties had signed the same signature page.

Section 8.12 Lender’s Rights with Respect to Loan

     Except as set forth in Section 8.1, Lender may at any time sell, assign, grant or
transfer to any Person, whether by assignment, pledge or participation, all or a portion of its
interest in or rights with respect to the Loan and in all or part of the obligations of Borrower
and any other obligated party under the Loan Documents.

Section 8.13 Recourse Obligations

     The Loan shall be with full recourse to Borrower. Notwithstanding anything to the contrary in
this Loan Agreement, the Note or any of the other Loan Documents, (A) Lender shall not be deemed to
have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other
provisions of the Bankruptcy Code to file a claim for the full amount of the obligations secured by
the Security Documents or to require that all Collateral shall continue to secure all of the
obligations owing to Lender in accordance with the Loan Documents.

Section 8.14 Confidentiality

     Borrower and Lender shall mutually agree on the contents of any press release, public
announcement or other public disclosure regarding this Loan Agreement and the transactions
contemplated hereunder to be made following the mutual execution and delivery of this Loan
Agreement; provided that Lender may disclose the terms hereof, and give copies of the Loan
Documents to, assignees and participants and to prospective assignees and participants without the
prior consent of Borrower. If either party fails to respond to the other party in writing with
either an approval or a disapproval within five (5) Business Days of a party’s receipt of the other
party’s request for consent or approval as expressly contemplated pursuant to this Section
8.14, then such consent or approval will be deemed to have been given, provided that such five
(5) Business Day period will not commence to run unless and until the other party has received all
information, materials, documents and other matters required to be submitted to it hereunder with
respect to such consent or approval and all other information, materials, documents and other
matters reasonably essential to its decision process. Notwithstanding the foregoing, Borrower and
Lender may publicly disclose information relating to this Loan Agreement and the transaction
contemplated therein (a) to the extent necessary to enforce its rights under the terms of this Loan
Agreement and/or the other Loan Documents, (b) to the extent any such information presently is or
hereafter becomes available to the public other than as a result of a breach by such party of this
Section 8.11, and (c) to the extent disclosure is required by law, regulation or judicial
order or requested or required by bank or other regulators or auditors, as long as, to the extent
permitted by any law, statute, rule or regulation, notice is given to the party hereto to which
such information relates by the disclosing party prior to (or, in the event that prior notice is
not reasonably practicable or in case of a judicial order, promptly after) such disclosure.

55

 

Section 8.15 Time is of the Essence

     Time is of the essence of this Loan Agreement.

Section 8.16 No Third Parties Benefited

     This Loan Agreement is made and entered into for the sole protection and legal benefit of
Borrower, Guarantor and Lender and their permitted successors and assigns, and no other Person will
be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with this Loan Agreement or any of the other Loan Documents. Lender will not
have any obligation to any Person not a party to this Loan Agreement or the other Loan Documents.

Section 8.17 Severability

     The illegality or unenforceability of any provision of this Loan Agreement or any instrument
or agreement required hereunder will not in any way affect or impair the legality or enforceability
of the remaining provisions of this Loan Agreement or any instrument or agreement required
hereunder.

Section 8.18 FORUM SELECTION; JURISDICTION; CHOICE OF LAW

     (a) THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS AND THE OBLIGATIONS ARISING
HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT
THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS AND
SECURITY INTERESTS WITH RESPECT TO ANY INDIVIDUAL PROPERTY (OTHER THAN PERSONAL PROPERTY) CREATED
PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED
ACCORDING TO THE LAW OF THE STATE IN WHICH THE APPLICABLE INDIVIDUAL PROPERTY (OTHER THAN PERSONAL
PROPERTY) IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH
STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY
OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST
EXTENT PERMITTED BY LAW, BORROWER AND LENDER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY CLAIM
TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT, THE NOTE AND THE OTHER
LOAN DOCUMENTS, AND THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW.

56

 

     (b) ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS SHALL BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK,
COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND BORROWER
WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS
OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:

National Registered Agents, Inc.

160 Greentree Drive, Suite 101

Dover, DE 19904

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS
WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW
YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND NOTICE OF
SAID SERVICE MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE
STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS
AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE
SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS
DISSOLVED WITHOUT LEAVING A SUCCESSOR.

Section 8.19 WAIVER OF JURY TRIAL

     BORROWER AND LENDER HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY
JURY, AND WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION
ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND
VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND
EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. BORROWER AND LENDER
ARE HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF
THIS WAIVER.

57

 

Section 8.20 Interpretation

     This Loan Agreement and the other Loan Documents will not be construed against Lender merely
because of Lender’s involvement in the preparation of such documents and agreements.

Section 8.21 Destruction of Note

     In the event the Note is mutilated or destroyed by any cause whatsoever (other than in
connection with the permitted cancellation thereof), or otherwise lost or stolen and regardless of
whether due to the act or neglect of Lender, Borrower will execute and deliver to Lender in
substitution therefor a duplicate promissory note containing the same terms and conditions as the
promissory note so mutilated, destroyed, lost or stolen, within 10 days after Lender notifies
Borrower of any such mutilation, destruction, loss or theft of such note. Upon Borrower’s delivery
of such duplicate promissory note, Borrower will be relieved of all obligations under the original
promissory note so mutilated, destroyed, lost or stolen and will thereafter be bound solely by the
provisions of such duplicate promissory note.

Section 8.22 No Relationship With Obligors

     Lender does not hereby assume and shall have no responsibility, obligation or liability to
Obligors, Lender’s relationship being that only of a creditor who has taken an Assignment from
Borrower of the Timeshare Loans in order to facilitate performance of the obligations arising under
the Loan Documents. Except as required by law and for filings made with the Securities & Exchange
Commission or any stock exchange on which Borrower’s stock is traded, Borrower will not, at any
time, use the name of or make reference to Lender with respect to the Timeshare Project, the sale
of Timeshare Interests or otherwise, without the express written consent of Lender.

Section 8.23 Entire Agreement

     This Loan Agreement, together with the other Loan Documents, embodies the entire agreement and
understanding between Borrower and Lender and supersedes all prior or contemporaneous agreements
and understandings of such Persons, verbal or written, relating to the subject matter hereof and
thereof except for any prior arrangements made with respect to the payment by Borrower of (or any
indemnification for) any fees, costs or expenses payable to or incurred (or to be incurred) by or
on behalf of Lender.

Section 8.24 Reliance

     Lender’s examination, inspection, or receipt of information pertaining to Borrower, Guarantor,
the Collateral or the Timeshare Project shall not in any way be deemed to reduce the full scope and
protection of the warranties, representations and obligations contained in the Loan Documents.

[Signatures on following pages]

58

 

     WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be duly executed as of
the dated first above written.

	 	 	 	 	 
	 	BORROWER:

MYSTIC DUNES RECEIVABLES, LLC,

a Delaware limited liability company

 	 
	 	By:  	/s/ David F. Palmer
 	 
	 	 	Printed Name:  	David F. Palmer 	 
	 	 	Title:  	President 	 
	 

[Signature Page — Loan and Security Agreement]

 

 

	 	 	 	 	 
	 	LENDER:

RESORT FINANCE AMERICA, LLC,

a Delaware limited liability company

 	 
	 	By:  	/s/ Clifton M. Dugas II
 	 
	 	 	Printed Name:  	 Clifton M. Dugas II 	 
	 	 	Title:  	Secretary 	 
	 

[Signature Page — Loan and Security Agreement]

 

 

EXHIBIT A

RECEIVABLES RE-ASSIGNMENT

This Instrument Prepared by and

Return to:

Michael C. Petronio, Esq.

Willkie Farr & Gallagher LLP 

787 Seventh Avenue

New York, NY 10019

ASSIGNMENT OF MORTGAGES

     WHEREAS, RESORT FINANCE AMERICA, LLC, a Delaware limited liability company, 100 Crescent
Court, Suite 260, Dallas, Texas 75201 (“RFA”), is the holder and beneficial owner of
certain Collateral, Notes and Mortgages as identified in various Assignments of Mortgages recorded
in favor of Mystic Dunes Receivables in the Public Records of Osceola County, Florida (collectively
the “Collateral”); and

     WHEREAS, MYSTIC DUNES LLC, a Delaware limited liability company, 10615 Park Run Drive, Las
Vegas, NV 89144 (“Mystic Dunes”), has repaid certain financing owed to RFA secured by the
underlying loans secured by the Collateral and in connection with such repayment, RFA has agreed to
re-assign its interest in the Collateral relating to the Mortgages described on Exhibit A
attached hereto (the “Mortgages”) back to Mystic Dunes and its successors and assigns.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency which are
hereby acknowledged, RFA hereby grants, bargains, sells, assigns, transfers and sets over unto
Mystic Dunes all of RFA’s interest in and to the Mortgages (but to no other Collateral or other
Mortgages not specifically released hereby).

[Signatures to follow]

A-1

 

     IN WITNESS WHEREOF, Resort Finance America LLC has caused these presents to be executed in its
name, by its proper officers thereunto duly authorized, this ____ day of _________, 2011.

	 	 	 	 	 	 	 	 	 	 	 

	Signed, Sealed and Delivered
In the Presence of:	 	 	 	RESORT FINANCE AMERICA, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	 
	 	 
	 

	 	 
	 	 	 	 

	 	 
	Print Name:

	 
	 	 
	 	 	Name:
		 	 
	 

	 	 	 	 	 	 	 	Its:
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Print Name:

	 	 	 	 	 	 	 	 

	 	 	 

	STATE OF
	 	)
	 
	 	) ss:
	COUNTY OF
	 	)

     On ________________, 2011, before me, the undersigned, a Notary Public in and for said State,
personally appeared ____________, either personally known to me or proved to me on the basis of
satisfactory evidence, to be the person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized capacities, and that by his
signature on the instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.

	 	 	 	 	 
	 	 	 
	 	  	
 	 
	 	 	Notary Public, State of 	 
	 	 	Print Name
	 
	 

My commission expires:

A-2

 

EXHIBIT A TO ASSIGNMENT OF MORTGAGE(S)

	 	 	 	 	 	 	 	 	 

	Contract #
	 	Real Property1
	 	Date of Mortgage
	 	Mortgage

Recording

Information2
	 	Original Principal

Amt. Secured
	 

 

			
	1	 	All of said Timeshare interests being in (real property description)
	 
	2	 	(Date of Recording and either Timeshare Loan Number or Adequate Recording Book and Page References).

A-3

 

EXHIBIT B

FORM OF ENDORSEMENT AND

ALLONGE TO CONSUMER PROMISSORY NOTE

PAY TO THE ORDER OF MYSTIC DUNES, LLC, without recourse, representation or warranty.

DATED as of ____________, 2011.

	 	 	 	 	 
	 	RESORT FINANCE AMERICA, LLC,

a Delaware limited liability company

 	 
	 	BY:  	 	 
	 	 	PRINT NAME: 
	 
	 	 	TITLE: 
	 
	 

PAY TO THE ORDER OF MYSTIC DUNES RECEIVABLES, LLC, without recourse, representation or warranty.

DATED as of ____________, 2011.

	 	 	 	 	 
	 	MYSTIC DUNES, LLC,

a Delaware limited liability company

 	 
	 	BY:  	 	 
	 	 	PRINT NAME: 
	 
	 	 	TITLE: 
	 
	 

PAY TO THE ORDER OF _____________________, without recourse, representation or warranty.

DATED as of ____________, 2011.

	 	 	 	 	 
	 	MYSTIC DUNES RECEIVABLES, LLC,

a Delaware limited liability company

 	 
	 	BY:  	 	 
	 	 	PRINT NAME: 
	 
	 	 	TITLE: 

 	 
	 

B-1

 

EXHIBIT C

FORM OF ASSIGNMENT

This Instrument Prepared by and

Return to:

Michael C. Petronio, Esq.

Willkie Farr & Gallagher LLP 

787 Seventh Avenue

New York, NY 10019

ASSIGNMENT OF MORTGAGES

     WHEREAS, MYSTIC DUNES LLC, a Delaware limited liability company, 10615 Park Run Drive, Las
Vegas, NV 89144 (“Mystic Dunes”), is the holder and beneficial owner of certain Collateral,
Notes and Mortgages as identified in various Assignments of Mortgages recorded in favor of Mystic
Dunes Receivables in the Public Records of Osceola County, Florida (collectively the
“Collateral”); and

     WHEREAS, MYSTIC DUNES RECEIVABLES LLC, a Delaware limited liability company, 10615 Park Run
Drive, Las Vegas, NV 89144 (“Mystic Dunes Receivables”), is taking an assignment of the
underlying loans secured by the Collateral and in connection with such assignment, Mystic Dunes has
agreed to assign its interest in the Collateral relating to the Mortgages described on Exhibit
A attached hereto (the “Mortgages”) to Mystic Dunes Receivables and its successors and
assigns.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency which are
hereby acknowledged, Mystic Dunes hereby grants, bargains, sells, assigns, transfers and sets over
unto Mystic Dunes Receivables all of Mystic Dunes’ interest in and to the Mortgages.

[Signatures to follow]

C-1

 

     IN WITNESS WHEREOF, Mystic Dunes LLC has caused these presents to be executed in its name, by
its proper officers thereunto duly authorized, this ____ day of _________, 2011.

	 	 	 	 	 	 	 	 	 	 	 

	Signed, Sealed and Delivered
In the Presence of:	 	 	 	MYSTIC DUNES LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	 
	 	 
	
 
	 	 

	 	 
	 	 	 	 

	 	 
	Print Name:

	 	 
 

	 	 
	 	 	 	Name: 

	 	 
	 

	 	 	 	 	 	 	 	Its: 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Print Name: 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 

	 	 	 

	STATE OF
	 	)
	 
	 	) ss:
	COUNTY OF
	 	)

     On ________________, 2011, before me, the undersigned, a Notary Public in and for said State,
personally appeared ____________, either personally known to me or proved to me on the basis of
satisfactory evidence, to be the person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized capacities, and that by his
signature on the instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.

	 	 	 	 	 
	 	 	 
	 	  	
 	 
	 	 	Notary Public, State of 	 
	 	 	Print Name 
	 
	 

My commission expires:

C-2

 

EXHIBIT A

TO

ASSIGNMENT OF MORTGAGE(S)

	 	 	 	 	 	 	 	 	 

	Contract #
	 	Real Property3
	 	Date of Mortgage
	 	Mortgage

Recording

Information4
	 	Original Principal

Amt. Secured
	 

 

			
	3	 	All of said Timeshare interests being in (real
property description)
	 
	4	 	(Date of Recording and either Timeshare Loan
Number or Adequate Recording Book and Page References).

C-3

 

This Instrument Prepared by and

Return to:

Michael C. Petronio, Esq.

Willkie Farr & Gallagher LLP 

787 Seventh Avenue

New York, NY 10019

ASSIGNMENT OF MORTGAGES

     WHEREAS, MYSTIC DUNES RECEIVABLES LLC, a Delaware limited liability company, 10615 Park Run
Drive, Las Vegas, NV 89144 (“Mystic Dunes Receivables”), is the holder and beneficial owner
of certain Collateral, Notes and Mortgages as identified in various Assignments of Mortgages
recorded in favor of Mystic Dunes Receivables in the Public Records of Osceola County, Florida
(collectively the “Collateral”); and

     WHEREAS, RESORT FINANCE AMERICA, LLC, a Delaware limited liability company, 100 Crescent
Court, Suite 260, Dallas, Texas 75201 (“RFA”), has provided financing to Mystic Dunes
Receivables secured by the underlying loans secured by the Collateral and as part of that
financing, Mystic Dunes Receivables has agreed to assign its interest in the Collateral relating to
the Mortgages described on Exhibit A attached hereto (the “Mortgages”) to RFA and
its successors and assigns.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency which are
hereby acknowledged, Mystic Dunes Receivables hereby grants, bargains, sells, assigns, transfers
and sets over unto RFA all of Mystic Dunes Receivables’ interest in and to the Mortgages.

[Signatures to follow]

C-4

 

     IN WITNESS WHEREOF, Mystic Dunes Receivables LLC has caused these presents to be executed in
its name, by its proper officers thereunto duly authorized, this ____ day of _________, 2011.

	 	 	 

	 

	 	 
	Signed, Sealed and Delivered
	 	 
	In the Presence of:

	 	MYSTIC DUNES RECEIVABLES LLC
	 
	 	 
	 

	 	By: 

	 

	 	 
	Print Name: 

	 	Name: 

	 

	 	Its: 

	 

	 	 
	Print Name:

	 	 

	 	 	 	 	 	 	 

	STATE OF

	 	 	)

)	 	 	ss:
	COUNTY OF

	 	 	)	 	 	 

     On ________________, 2011, before me, the undersigned, a Notary Public in and for said State,
personally appeared ____________, either personally known to me or proved to me on the basis of
satisfactory evidence, to be the person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized capacities, and that by his
signature on the instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.

	 	 	 	 	 

	 

	 	 	 	 
	 

	 	 	 	Notary Public, State of

Print Name 

My commission expires:

C-5

 

EXHIBIT A

TO

ASSIGNMENT OF MORTGAGE(S)

	 	 	 	 	 	 	 	 	 

	Contract #
	 	Real
Property5
	 	Date of Mortgage
	 	Mortgage

Recording

Information6
	 	Original Principal

Amt. Secured
	 

 

			
	5	 	All of said Timeshare interests being in (real property description)
	 
	6	 	(Date of Recording and either Timeshare Loan Number or Adequate Recording Book and Page References).

C-6

 

SCHEDULE 1

TIMESHARE LOANS PLEDGED TO LENDER

[Delivered under separate schedule]

1

 

SCHEDULE 5.13

LITIGATION SCHEDULE

Following is a brief summary of pending litigation involving Borrower, Guarantor and/or Servicing
Agent as of the date hereof:

     None.

1

 

SCHEDULE 5.15

Guarantor Subsidiaries

1

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