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RESOLUTIONS OF THE BOARD
OF DIRECTORS OF USG1, INC. 

AGREEMENT AND PLAN OF
MERGER 

BY AND AMONG 

USG1, INC., CANWEALTH MINERALS
CORPORATION AND KIMI ROYER AS STOCKHOLDER REPRESENTATIVE

WHEREAS, USG1, Inc. (“USG1”), is a Delaware corporation;
and 

WHEREAS, Canwealth Minerals Corporation (“Canwealth”) is
a Delaware corporation; and 

WHEREAS, the Board of Directors of USG1 (the “Board”) has
contemplated and considered the proposed business combination as set forth in
that certain Agreement and Plan of Merger (the “Merger Agreement”) and has
determined that it is advisable and in the best interest of the USG1
Stockholders to enter into the business combination of USG1 and Canwealth, as
contemplated by the Merger Agreement; 

THEREFORE BE IT RESOLVED that the Board approves
the business combination of USG1 and Canwealth; and 

BE IT FURTHER RESOLVED that the Board adopts the
Merger Agreement; and 

BE IT FURTHER RESOLVED that the Chief Executive Officer of
USG1 (the “CEO”) be and hereby is authorized to execute and deliver the Merger
Agreement and each of the agreements contemplated thereby, each in the form
previously provided to the Board, with such changes or modifications as the CEO
shall deem necessary or desirable; and

BE IT FURTHER RESOLVED that the CEO be, and hereby is,
authorized and empowered to take any and all such further action, to execute
and deliver any and all such further instruments, documents and certificates,
and to pay such expenses, in the name of and on behalf of USG1, as the CEO may
deem necessary or advisable to effectuate the purposes and intent of the
resolutions hereby adopted, the taking of such actions, the execution and
delivery of such agreements, instruments, documents and certificates and the
payment of such expenses by the CEO to be conclusive evidence of his
authorization hereunder and the approval thereof; and

BE IT FURTHER RESOLVED that the CEO is directed
to present the Merger Agreement and the Resolutions of the Board to all
stockholders eligible to vote upon and/or approve mergers and consolidations,
to the extent it is required by the General Corporation Law of the State of
Delaware and the Bylaws of USG1.

[Remainder of page
intentionally left blank; signature page follows.] 

 

 

 

Signed: ______/s/_Kimi Royer______________________

                Kimi
Royer, Chairman and Secretary of the Board of Directors

 

Date:
___August 10, 2012__________________________

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AGREEMENT AND
PLAN OF MERGER

 

AGREEMENT AND PLAN OF MERGER, dated as of
August 10, 2012 (this “Agreement”), by and among Canwealth Minerals
Corporation, a Delaware corporation (“Canwealth”), USG1, Inc., a
Delaware corporation (“USG1”), and Kimi Royer, as representative of the
USG1 Stockholders (as hereinafter defined) (the “Stockholder Representative”). 

 

WHEREAS, the parties
intend to effect the merger of Canwealth with and into USG1 (the “Merger”),
with USG1 continuing as the surviving entity in the Merger (the “Surviving
Company”), as a result of which the entire issued and outstanding common
stock, par value $0.0001 share of USG1 (the “USG1 Stock”) will be deemed
for all purposes to represent shares of common stock, par value $0.01 per
share, of Canwealth (the “Canwealth Stock”), upon the terms and subject
to the conditions set forth in this Agreement and in accordance with Delaware
General Corporation Law, as amended (“DGCL”); 

 

WHEREAS, the Boards of
Directors of Canwealth and the Board of Directors of USG1 have each approved
the Merger and each of them has determined that this Agreement and the
transactions contemplated hereby are advisable and in the respective best
interests of each of Canwealth and USG1, respectively, and their respective
stockholders;

 

WHEREAS, the USG1 Board
of Directors has resolved to recommend that the stockholders of USG1 (the “USG1
Stockholders”) adopt this Agreement and the Board of Directors of Canwealth
has resolved to recommend that its sole stockholder adopt this Agreement, to
the extent such approval is required.

 

WHEREAS, as provided by
this Agreement, the Stockholder Representative shall deliver to Canwealth a
written consent in lieu of a meeting of stockholders, in the form annexed
hereto as Schedule “A” (the “Written Consent”), signed by no less than
the holders of ninety percent (90%) of the issued and outstanding shares of
USG1 Stock prior to the Effective Time (the “Required Stockholder Approval”),
approving the terms of this Agreement and the Merger and irrevocably appointing
the Stockholder Representative for the purposes set forth in this Agreement.

 

                        NOW,
THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements herein contained, the parties agree as
follows:

 

ARTICLE I

TERMS OF THE MERGER

 

Section
1.01.          The Merger.

 

(i)           As
a result of the Merger, at the Effective Time, 

 

(A)       the USG1 Stockholders shall
continue to hold an aggregate of six million six hundred thousand (6,600,000)
of USG1 Stock, representing the number of shares of USG1
Stock they held prior to the Effective Time.  Such shares of USG1 Stock shall
represent thirteen percent (13%) of the issued and outstanding shares of USG1
Stock immediately following the Effective Time; and

 

 

 

 

(B)       all of the shares of Canwealth
Stock shall be converted into an aggregate of Forty-Four Million One Hundred Sixty-Nine
Thousand Two Hundred and Thirty-One (44,169,231) shares of USG1 Stock,
representing eighty-seven percent (87%) of the issued and outstanding shares of
USG1 Stock immediately following the Effective Time.  Stock certificates
representing the foregoing shares of USG1 Stock shall be issued at the
Effective Time.  Such shares of USG1 Stock, together with the shares of USG1
Stock held by the USG1 Stockholders as contemplated by Section 1.01(i)(A)
hereof, shall constitute the only outstanding shares of common stock of the
Surviving Company following the Effective Time. The capitalization of the
Surviving Company following the Merger is reflected on Schedule “B” attached
hereto. 

 

(ii)         Fractional
Shares.  No certificates or scrip representing fractional shares
of Canwealth Stock or book-entry credit of the same shall be issued in exchange
for the USG1 Stock.  Each holder of USG1 Stock who receives any
portion of the Canwealth Stock who would otherwise have been entitled to
receive a fraction of a share of Canwealth Stock shall have such fractional
interest rounded up to the nearest whole number.

 

(iv)         Merger
Consideration.  As consideration for the Merger, Canwealth shall
pay the Stockholder Representative an aggregate of Fifty Thousand Dollars
($50,000) (the “Merger Consideration”), who shall be solely responsible
to distribute such Merger Conisderation among the non-Dissenting Stockholders (the
“Non-Dissenting Stockholders”) on a pro rata basis relative to the
number of shares of USG1 Stock held by each such Non-Dissenting Stockholder
prior to the Merger.  The Merger Consideration shall be paid by Canwealth as
follows:

 

(A)       Ten Thousand Dollars ($10,000)
shall be payable upon a Registration Statement on Form S-1 filed by the
Surviving Company being
declared effective by the Securities and Exchange Commission; and

 

(B)       Forty Thousand Dollars ($40,000)
shall be payable upon (i) the filing of a Form 15c2-11 by the Surviving Company
and (ii) the shares of USG1 Stock being actively traded on a stock exchange or quotation
service.

 

(v)           By
virtue of the Merger, (A) the certificate of incorporation of USG1 as in effect
immediately prior to the Effective Time, shall be, at and after the Effective
Time, the certificate of incorporation of the Surviving Company and (B) the
bylaws of USG1 as in effect immediately prior to the Effective Time shall be,
at and after the Effective Time, the bylaws of the Surviving Company.

 

(vi)        From
and after the Effective Time, the Surviving Company shall possess all
properties, rights, privileges, powers and franchises of USG1 and Canwealth and
all of the claims, obligations, liabilities, debts and
duties of USG1 and Canwealth shall become the claims, obligations, liabilities,
debts and duties of the Surviving Company.

 

 

 

 

Section
1.02.          Closing;
Effective Time; Effect.

 

(a)           Unless
this Agreement shall have been terminated and the transactions contemplated
hereby shall have been abandoned pursuant to Section 5.01, and subject to the
satisfaction or waiver of the conditions set forth in Article IV hereof, the
closing of the Merger (the “Closing”) shall take place on a date and at
a time to be specified by the parties, which shall be no later than the fifth
business day after satisfaction (or waiver in accordance with this Agreement)
of all the conditions set forth in Article IV, at the offices of Canwealth,
unless another date, time or place is agreed to by the parties. The date on
which the Closing occurs is herein referred to as the “Closing Date”.  The
time when the Merger shall become effective is herein referred to as the “Effective
Time”. 

 

(b)           Subject
to the terms and conditions hereof, concurrently with the Closing, the parties
shall cause the Merger to be consummated by filing with the Secretary of State
of the State of Delaware a certificate of merger for the Merger (the “Certificate
of Merger”) executed in accordance with the relevant provisions of the DGCL
and shall make all other filings or recordings required under the DGCL in order
to effect the Merger.  The Merger shall become effective immediately
upon the filing of the Certificate of Merger or at such time thereafter as is
provided in the Certificate of Merger.

 

Section 
1.03           Dissenting Shares.  Notwithstanding any other provisions of
this Agreement to the contrary, the shares of USG1 Stock which are outstanding
immediately prior to the Effective Time and which are held by USG1 Stockholders
who shall have not executed and delivered the Written Consent and who shall
have demanded properly in writing appraisal for such shares (collectively, the
“Dissenting Shares”) in accordance with Section 262 of the DGCL (each a
“Dissenting Stockholder” and collectively, the “Dissenting
Stockholders”) shall not be converted into or represent the right to
receive any portion of the Merger Consideration.  Instead, such Dissenting
Stockholders shall be entitled to receive payment of the value of such shares
of USG1 Stock held by them as shall be determined in accordance with the provisions
of such Section 262 of the DGCL (the “Dissenting Consideration”), and at
the Effective Time such Dissenting Shares shall no longer be outstanding and
shall cease to have any rights with respect thereto, except the right to
receive such Dissenting Consideration.  Notwithstanding anything in the
foregoing to the contrary, all Dissenting Shares held by USG1 Stockholders who
shall have failed to perfect or shall have effectively withdrawn or lost their
rights to appraisal of such Shares in accordance with the provisions of Section
262 of the DGCL shall thereupon be deemed to have been converted into and to
have become exchangeable, as of the Effective Time, for the right to receive
their respective portion of the Merger Consideration to the extent provided for
herein, and such shares shall not be deemed to be Dissenting Shares.  USG1
shall give Canwealth prompt written notice of any demands for the exercise of
dissenters or appraisal rights, withdrawals of demands for the exercise of
dissenters or appraisal rights and any other written communications delivered
to, or by, or on behalf of, USG1 pursuant to or in connection with Section 262
of the DGCL.  

 

 

 

 

Section 1.04.          Tax-Free
Merger.  The
Merger is intended to be a reorganization within the meaning of Section 368(a)
of the Code and this Agreement is intended to be a “plan of reorganization”
within the meaning of the regulations promulgated under Section 368(a) of the
Code and for the purpose of qualifying the Merger as a tax-free transaction for
federal income tax purposes.  The parties agree to report the Merger
as a tax-free reorganization under the provisions of Section
368(a).  None of the parties will take or cause to be taken any
action which would prevent the transactions contemplated by this Agreement from
qualifying as a reorganization under Section 368(a).

 

Section
1.05.          USG1 Board of
Directors. 
At the Effective Time, the existing directors serving on the USG1 Board of
Directors shall each resign and Garth McIntosh shall be elected as the sole
director of USG1.

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES

 

Section
2.01.          Definitions.  For
purposes of this Agreement, the following definitions shall apply:

 

(a)           As
used in this Agreement, a “Material Adverse Effect” shall mean, with
respect to a party, any occurrence, state of facts, change, event, effect or
circumstances that, individually or in the aggregate, has or would reasonably
be expected to have, a materially adverse effect on the business, operations,
assets, condition (financial or otherwise), liabilities or results of
operations of such party and its subsidiaries, taken as a whole, other than any
occurrence, state of facts, change, event, effect or circumstances to the
extent resulting from: (i) political instability, acts of terrorism or war,
changes in national, international or world affairs, or other calamity or
crisis, including without limitation as a result of changes in the
international or domestic markets, so long as such party is not disproportionately
affected thereby, (ii) any change affecting the United States economy generally
or the economy of any region in which such party conducts business that is
material to the business of such party, so long as such party is not
disproportionately affected thereby, (iii) the announcement of the execution of
this Agreement, or the pendency of the consummation of the Merger, (iv) any
change in United States generally accepted accounting principles (“GAAP”)
or interpretation thereof after the date hereof or (v) the execution and
performance of or compliance with this Agreement.

 

(b)           As
used in this Agreement, “knowledge,” when used with respect to USG1,
shall mean the actual knowledge, after reasonable inquiry of the matters
presented (with reference to what is customary and prudent for the applicable
individuals in connection with the discharge by the applicable individuals of
their duties as officers or directors of USG1), of the executive officers and
directors of USG1, and, when used with respect to Canwealth shall mean the
knowledge, after reasonable inquiry of the matters presented (with reference to
what is customary and prudent for the applicable individuals in connection with
the discharge by the applicable individuals of their duties as officers or
directors of Canwealth), of the executive officers and directors of Canwealth.

 

Section
2.02.          Representations
and Warranties of USG1.

 

 

 

 

Subject to the exceptions set forth in
the disclosure schedule to be delivered by USG1 to Canwealth in connection
herewith (the “USG1 Disclosure Schedule”), USG1 represents and warrants
to Canwealth as follows.

 

(a)        Organization.  USG1
is a corporation duly incorporated, validly existing, and in good standing
under the laws of Delaware and has the corporate power and is duly authorized
under all applicable laws, regulations, ordinances, and orders of public
authorities to carry on its business in all material respects as it is now
being conducted.  Complete and correct copies of the certificate of
incorporation and bylaws of USG1 as in effect on the date hereof have been
provided to Canwealth. The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated hereby will not, violate
any provision of USG1’s certificate of incorporation or bylaws.  USG1
has taken all action required by law, its certificate of incorporation, its bylaws,
or otherwise to authorize the execution and delivery of this Agreement, and USG1
has full power, authority, and legal right and has taken all action required by
law, its certificate of incorporation, bylaws, or otherwise to consummate the
transactions herein contemplated.

 

(b)        Capitalization. 

 

(i)       USG1’s
authorized capitalization consists of (a) 100,000,000 shares of common stock, par
value $0.0001 per share, of which 6,600,000 shares are issued and outstanding,
and (b) 20,000,000 shares of preferred shares, par value $0.0001 per share,
none of which are issued and outstanding.  All issued and outstanding
shares are legally issued, fully paid, and non-assessable and not issued in
violation of the preemptive or other rights of any person. As of the Closing
Date, no shares of USG1’s common stock were reserved for issuance upon the
exercise of outstanding options to purchase the common shares; (iv) no common
shares were reserved for issuance upon the exercise of outstanding warrants to
purchase USG1 common shares; (v) no shares of preferred stock were reserved for
issuance to any party; and (vi) no common shares were reserved for issuance
upon the conversion of USG1 preferred stock or any outstanding convertible
notes, debentures or securities.  All outstanding USG1 common shares
have been issued and granted in compliance with (i) all applicable securities
laws and (in all material respects) other applicable laws and regulations, and
(ii) all requirements set forth in any applicable Contracts.

 

(ii)       There
are no equity securities, partnership interests or similar ownership interests
of any class of any equity security of USG1, or any securities exchangeable or
convertible into or exercisable for such equity securities, partnership
interests or similar ownership interests, issued, reserved for issuance or
outstanding.   Except as contemplated by this Agreement or as set
forth in Schedule 2.02(b), there are no subscriptions, options,
warrants, equity securities, partnership interests or similar ownership
interests, calls, rights (including preemptive rights), commitments or
agreements of any character to which USG1 is a party or by which it is bound
obligating USG1 to issue, deliver or sell, or cause to be issued, delivered or
sold, or repurchase, redeem or otherwise acquire, or cause the repurchase,
redemption or acquisition of, any shares of capital stock, partnership
interests or similar ownership interests of USG1 or obligating USG1 to grant,
extend, accelerate the vesting of or enter into any such subscription,
option, warrant, equity security, call, right, commitment or
agreement.  There is no plan or arrangement to issue USG1 common
shares or preferred stock except as set forth in this Agreement.  Except as set
forth in Schedule 2.02(b) hereto, there are no registration rights, and
there is no voting trust, proxy, rights plan, anti-takeover plan or other
agreement or understanding to which USG1 is a party or by which it is bound
with respect to any equity security of any class of USG1, and there are no
agreements to which USG1 is a party, or which USG1 has knowledge of, which
conflict with this Agreement or the transactions contemplated herein or
otherwise prohibit the consummation of the transactions contemplated hereunder.

 

 

 

 

(c) Subsidiaries and Predecessor Corporations.  USG1
does not have any predecessor corporation(s), no subsidiaries, and does not
own, beneficially or of record, any shares of any other corporation.

 

(d) Financial Statements. 

 

(i) Incorporated in the Annual Report of USG1 for the fiscal
year ended December 31, 2011, as filed with the Securities and Exchange
Commission and posted on EDGAR, are the audited balance sheets of USG1 as of
December 31, 2011 and the related audited statements of operations,
stockholders’ equity and cash flows for December 31, 2011 together with the
notes to such statements and the report of KCCW Accountancy Corp., independent
certified public accountants, with respect thereto;

 

(ii) All such financial statements have been prepared in
accordance with GAAP consistently applied throughout the periods involved. The USG1
balance sheets are true and accurate and present fairly as of their respective
dates the financial condition of USG1.  As of the date of such
balance sheets, except as and to the extent reflected or reserved against
therein, USG1 had no liabilities or obligations (absolute or contingent) which
should be reflected in the balance sheets or the notes thereto prepared in
accordance with generally accepted accounting principles, and all assets
reflected therein are properly reported and present fairly the value of the
assets of USG1, in accordance with generally accepted accounting principles.
The statements of operations, stockholders’ equity and cash flows reflect
fairly the information required to be set forth therein by generally accepted
accounting principles;

 

(iii) USG1 has no liabilities with respect to the
payment of any federal, state, county, local or other taxes (including any
deficiencies, interest or penalties), except for taxes accrued but not yet due
and payable;

 

(iv) USG1 has timely filed all state, federal or local income
and/or franchise tax returns required to be filed by it from inception to the
date hereof.  Each of such income tax returns reflects the taxes due
for the period covered thereby, except for amounts which, in the aggregate, are
immaterial;

 

(v) The books and records, financial and otherwise, of USG1 are
in all material aspects complete and correct and have been maintained in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved; and

 

 

 

 

(vi) All of USG1’s assets are
reflected on its financial statements, and, except as set forth in the USG1
Schedules or the financial statements of USG1 or the notes thereto, USG1 has no
material liabilities, direct or indirect, matured or unmatured, contingent or
otherwise.

 

(e)        Information.  The
information concerning USG1 set forth in this Agreement and the USG1 Schedules
is complete and accurate in all material respects and does not contain any
untrue statements of a material fact or omit to state a material fact required
to make the statements made, in light of the circumstances under which they
were made, not misleading.  

 

(f) Options or Warrants.  There are no
existing options, warrants, calls, or commitments of any character relating to
the authorized and unissued stock of USG1.

 

(g) Absence of Certain Changes or Events.  Since
the date of the most recent USG1 balance sheet:

 

(i) there has not been (i) any material adverse change in the
business, operations, properties, assets or condition of USG1 or (ii) any
damage, destruction or loss to USG1 (whether or not covered by insurance)
materially and adversely affecting the business, operations, properties, assets
or condition of USG1;

 

(ii) USG1 has not (i) amended its certificate of incorporation
or bylaws except as required by this Agreement; (ii) declared or made, or
agreed to declare or make any payment of dividends or distributions of any
assets of any kind whatsoever to stockholders or purchased or redeemed, or
agreed to purchase or redeem, any of its capital stock; (iii) waived any rights
of value which in the aggregate are outside of the ordinary course of business
or material considering the business of USG1; (iv) made any material change in
its method of management, operation, or accounting; (v) entered into any
transactions or agreements other than in the ordinary course of business; (vi)
made any accrual or arrangement for or payment of bonuses or special
compensation of any kind or any severance or  termination pay to any
present or former officer or employee; (vii) increased the rate of compensation
payable or to become payable by it to any of its officers or directors or any
of its salaried employees whose monthly compensation exceed $1,000;
or  (viii) made any increase in any profit sharing, bonus, deferred
compensation, insurance, pension, retirement, or other employee benefit plan,
payment, or arrangement, made to, for or with its officers, directors, or
employees;

 

(iii) USG1 has not (i) granted or agreed to grant
any options, warrants, or other rights for its stock, bonds, or other corporate
securities calling for the issuance thereof; (ii) borrowed or agreed to borrow
any funds or incurred, or become subject to, any material obligation or
liability (absolute or contingent) except liabilities incurred in the ordinary
course of business; (iii) paid or agreed to pay any material obligations or
liabilities (absolute or contingent) other than current liabilities reflected
in or shown on the most recent USG1 balance sheet and current liabilities
incurred since that date in the ordinary course of business and professional
and other fees and expenses in connection with the preparation of this
Agreement and the consummation of the transaction contemplated hereby; (iv)
sold or transferred, or agreed to sell or transfer, any of its assets,
properties, or rights (except assets, properties, or rights not used or useful
in its business which, in the aggregate have a value of less than $1,000), or
canceled, or agreed to cancel, any debts or claims
(except debts or claims which in the aggregate are of a value less than
$1,000); (v) made or permitted any amendment or termination of any contract,
agreement, or license to which it is a party if such amendment or termination
is material, considering the business of USG1; or (vi) issued, delivered or
agreed to issue or deliver, any stock, bonds or other corporate securities
including debentures (whether authorized and unissued or held as treasury
stock), except in connection with this Agreement; and

 

 

 

 

(iv) to its knowledge, USG1 has not become subject to any law or
regulation which materially and adversely affects, or in the future, may
adversely affect, the business, operations, properties, assets or condition of USG1.

 

(h) Litigation and Proceedings.  There are no
actions, suits, proceedings or investigations pending or, to the knowledge of USG1
after reasonable investigation, threatened by or against USG1 or affecting USG1
or its properties, at law or in equity, before any court or other governmental
agency or instrumentality, domestic or foreign, or before any arbitrator of any
kind except as disclosed in Schedule 2.02(h).  USG1 has no
knowledge of any default on its part with respect to any judgment, order, writ,
injunction, decree, award, rule or regulation of any court, arbitrator, or
governmental agency or instrumentality or any circumstance which after
reasonable investigation would result in the discovery of such default.

 

(i) Contracts. 

 

(i) USG1 is not a party to, and its assets, products,
technology and properties are not bound by, any contract, franchise, license
agreement, agreement, debt instrument or other commitments whether such
agreement is in writing or oral;

 

(ii) USG1 is not a party to or bound by, and the properties of USG1
are not subject to any contract, agreement, other commitment or instrument; any
charter or other corporate restriction; or any judgment, order, writ,
injunction, decree, or award; and

 

(iii) USG1 is not a party to any oral or written
(i) contract for the employment of any officer or employee; (ii) profit
sharing, bonus, deferred compensation, stock option, severance pay, pension
benefit or retirement plan, (iii) agreement, contract, or indenture relating to
the borrowing of money, (iv) guaranty of any obligation, (vi) collective
bargaining agreement; or (vii) agreement with any present or former officer or
director of USG1.

 

(j) No Conflict With Other Instruments.  The
execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of, constitute a default under, or terminate, accelerate or modify
the terms of, any indenture, mortgage, deed of trust, or other material
agreement or instrument to which USG1 is a party or to which any of its assets,
properties or operations are subject.

 

(k) Compliance With Laws and Regulations.  To
the best of its knowledge, USG1 has complied with all applicable statutes and
regulations of any federal, state, or other applicable governmental entity or
agency thereof.  This compliance includes, but is not limited to, the
filing of all reports to date with federal and state securities authorities.

 

 

 

 

(l) Approval of Agreement.  The Board of
Directors of USG1 and a sufficient number of USG1 Stockholders to constitute
the Required Stockholder Approval approved this Agreement and the transactions
contemplated hereby.

 

(m)       Material Transactions or
Affiliations.  Except as disclosed herein and in the USG1
Schedules, there exists no contract, agreement or arrangement between USG1 and
any predecessor and any person who was at the time of such contract, agreement
or arrangement an officer, director, or person owning of record or known by USG1
to own beneficially, 5% or more of the issued and outstanding common shares of USG1
and which is to be performed in whole or in part after the date hereof or was
entered into not more than three years prior to the date
hereof.  Neither any officer, director, nor 5% USG1 Stockholder has,
or has had since inception of USG1, any known interest, direct or indirect, in
any such transaction with USG1 which was material to the business of USG1.  USG1
has no commitment, whether written or oral, to lend any funds to, borrow any
money from, or enter into any other transaction with, any such affiliated
person.

 

(n) Bank Accounts; Power of Attorney.  Set
forth in Schedule 2.02(n) is a true and complete list of (i) all
accounts with banks, money market mutual funds or securities or other financial
institutions maintained by USG1 within the past twelve (12) months, the account
numbers thereof, and all persons authorized to sign or act on behalf of USG1,
(ii) all safe deposit boxes and other similar custodial arrangements maintained
by USG1 within the past twelve (12) months, (iii) the check ledger for the last
12 months, and (iv) the names of all persons holding powers of attorney from USG1
or who are otherwise authorized to act on behalf of USG1 with respect to any
matter, other than its officers and directors, and a summary of the terms of
such powers or authorizations.

 

(o) Valid Obligation.  This Agreement and all agreements
and other documents executed by USG1 in connection herewith constitute the
valid and binding obligation of USG1, enforceable in accordance with its or
their terms, except as may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting the enforcement of creditors’ rights generally and
subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefore
may be brought.

 

(p) SEC Filings; Financial Statements.  

 

(i)  USG1 has made available to Canwealth
a correct and complete copy, or there has been available on EDGAR, copies of
each report, registration statement and definitive proxy statement filed by USG1
with the SEC for the 36 months prior to the date of this Agreement (the “USG1
SEC Reports”), which, to USG1’s knowledge, are all the forms, reports and
documents filed by USG1 with the SEC for the 36 months or applicable period
prior to the date of this Agreement. As of their respective dates, to USG1’s
knowledge, the USG1 SEC Reports: (i) were prepared in accordance and complied
in all material respects with the requirements of the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), as the case may be, and the rules and regulations of the SEC
thereunder applicable to such USG1 SEC Reports, and (ii) did not at the time
they were filed (and if amended or superseded by a
filing prior to the date of this Agreement then on the date of such filing and
as so amended or superseded) contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.

 

 

 

 

(ii)  Each set of financial
statements (including, in each case, any related notes thereto) contained in
the USG1 SEC Reports comply as to form in all material respects with the
published rules and regulations of the SEC with respect thereto, were prepared
in accordance with U.S. GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited statements, containing footnotes as permitted by rules
promulgated under the Exchange Act) and each fairly presents in all material
respects the financial position of USG1 at the respective dates thereof and the
results of its operations and cash flows for the periods indicated, except that
the unaudited interim financial statements were or are subject to normal
adjustments which were not or are not expected to have a Material Adverse
Effect on USG1 taken as a whole.

 

(q) Exchange Act Compliance.  USG1 is in
compliance with, and current in, all of the reporting, filing and other
requirements under the Exchange Act, the common shares have been registered
under Section 12(g) of the Exchange Act, and USG1 is in compliance with all of
the requirements under, and imposed by, Section 12(g) of the Exchange Act,
except where a failure to so comply is not reasonably likely to have a Material
Adverse Effect on USG1.

 

(r) Title to Property.  USG1 does not own or
lease any real property or personal property.  There are no options
or other contracts under which USG1 has a right or obligation to acquire or
lease any interest in real property or personal property.

 

(s)    Intellectual
Property.  USG1 does not own, license or otherwise have any
right, title or interest in any intellectual property.

 

Section
2.03.          Representations
and Warranties of Canwealth.

 

Subject to the exceptions set forth in
the disclosure letter to be delivered to USG1 in connection herewith (the “Canwealth
Disclosure Schedule”), Canwealth represents and war­rants to USG1 as
follows:

 

(a)        Organization.  Canwealth
is a corporation duly incorporated, validly existing, and in good standing
under the laws of Delaware and has the corporate power and is duly authorized
under all applicable laws, regulations, ordinances, and orders of public
authorities to carry on its business in all material respects as it is now
being conducted.   The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby will not,
violate any provision of Canwealth’s certificate of incorporation or bylaws.  Canwealth
has taken all action required by law, its certificate of incorporation, its bylaws,
or otherwise to authorize the execution and delivery of this Agreement, and Canwealth
has full power, authority, and legal right and has taken all action required by
law, its certificate of incorporation, bylaws, or otherwise to consummate the
transactions herein contemplated.

 

 

 

 

(b)        Capitalization. 

 

(i)       Canwealth’s
authorized capitalization consists of 1,000 shares of common stock, par value $0.01
per share, of which 100 shares are issued and outstanding.  All
issued and outstanding shares are legally issued, fully paid, and
non-assessable and not issued in violation of the preemptive or other rights of
any person. As of the Closing Date, no shares of Canwealth’s common stock were
reserved for issuance upon the exercise of outstanding options to purchase the
common shares; (iv) no common shares were reserved for issuance upon the
exercise of outstanding warrants to purchase Canwealth common shares; (v) no
shares of preferred stock were reserved for issuance to any party; and (vi) no
common shares were reserved for issuance upon the conversion of any outstanding
convertible notes, debentures or securities.  All outstanding Canwealth
common shares have been issued and granted in compliance with (i) all
applicable securities laws and (in all material respects) other applicable laws
and regulations, and (ii) all requirements set forth in any applicable
Contracts.

 

(ii)       There
are no equity securities, partnership interests or similar ownership interests
of any class of any equity security of Canwealth, or any securities
exchangeable or convertible into or exercisable for such equity securities,
partnership interests or similar ownership interests, issued, reserved for
issuance or outstanding.   Except as contemplated by this
Agreement or as set forth in Schedule 2.02(b), there are no
subscriptions, options, warrants, equity securities, partnership interests or
similar ownership interests, calls, rights (including preemptive rights),
commitments or agreements of any character to which Canwealth is a party or by
which it is bound obligating Canwealth to issue, deliver or sell, or cause to
be issued, delivered or sold, or repurchase, redeem or otherwise acquire, or
cause the repurchase, redemption or acquisition of, any shares of capital
stock, partnership interests or similar ownership interests of Canwealth or
obligating Canwealth to grant, extend, accelerate the vesting of or enter into
any such subscription, option, warrant, equity security, call, right,
commitment or agreement.  There is no plan or arrangement to issue Canwealth
common shares or preferred stock except as set forth in this Agreement.  Except
as contemplated by this Agreement and except as set forth in Schedule 2.03(b)
hereto, there are no registration rights, and there is no voting trust, proxy,
rights plan, anti-takeover plan or other agreement or understanding to which Canwealth
is a party or by which it is bound with respect to any equity security of any
class of Canwealth, and there are no agreements to which Canwealth is a party,
or which Canwealth has knowledge of, which conflict with this Agreement or the
transactions contemplated herein or otherwise prohibit the consummation of the
transactions contemplated hereunder.

 

(c) Litigation and Proceedings.  There are no
actions, suits, proceedings or investigations pending or, to the knowledge of Canwealth
after reasonable investigation, threatened by or against Canwealth or affecting
Canwealth or its properties, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind except as disclosed in Schedule 2.03(c).  Canwealth
has no knowledge of any default on its part with respect to any judgment,
order, writ, injunction, decree, award, rule or regulation of any court,
arbitrator, or governmental agency or instrumentality or any circumstance which
after reasonable investigation would result in the discovery of such default.

 

 

 

 

(d) Approval of Agreement.  The
Board of Directors of Canwealth has approved and authorized the execution and
delivery of this Agreement by Canwealth and has approved this Agreement and the
transactions contemplated hereby.

 

(e) Valid Obligation.  This Agreement and all agreements
and other documents executed by Canwealth in connection herewith constitute the
valid and binding obligation of Canwealth, enforceable in accordance with its
or their terms, except as may be limited by bankruptcy, insolvency, moratorium
or other similar laws affecting the enforcement of creditors’ rights generally
and subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefore
may be brought.

 

ARTICLE III

ADDITIONAL AGREEMENTS

 

Section
3.01.         Legal
Conditions to Merger.  Except as otherwise provided herein, each of USG1
and Canwealth will take all reasonable actions necessary to comply promptly
with all legal requirements that may be imposed on such party with respect to
the Merger and will promptly cooperate with and furnish information to each
other in connection with any such requirements imposed upon any of them or any
of their subsidiaries in connection with the Merger.  Each of USG1
and Canwealth will take all actions reasonably necessary to obtain (and will
cooperate with each other in obtaining) any consent, acquiescence,
authorization, order or approval of, or any exemption or non-opposition by, any
Governmental Entity or court required to be obtained or made by USG1 or Canwealth
in connection with the Merger or the taking of any action contemplated thereby
or by this Agreement.

 

Section
3.02.         Public
Announcements and Regulation FD.

 

(a)           USG1
and/or the USG1 Stockholders will not issue any press release or otherwise make
any public statements with respect to the transactions contemplated by this
Agreement without the prior written consent and approval of Canwealth, except
as may be required by SEC rules and regulations, applicable law or by
obligations pursuant to any listing agreement with any national securities
exchange or transaction reporting system (but shall still provide a copy of
such release to Canwealth for its prior written approval).

  

(b)           Any
information concerning USG1 disclosed to Canwealth or its affiliates or
representatives or any information concerning Canwealth or its affiliates or
representatives disclosed to USG1, which has not been publicly disclosed, shall
be kept strictly confidential by the parties hereto and shall not be disclosed
or used by the recipients and until publicly disclosed by the party to which
such information relates; provided, however, that the foregoing
provision shall not prohibit disclosures by any party of information that (i)
was in the possession of a party prior to the date hereof, provided that such
information is not known by such party to be subject to a confidentiality
agreement, (ii) is or becomes generally available to the public other than as a
result of a disclosure by a party in violation of this Section 3.02 or (iii) a
party is required to disclose by law, including in connection with a proceeding
or in connection with the payment of taxes.  Each party hereto hereby
agrees that no public announcements concerning the terms of this Agreement or
the transactions contemplated thereunder shall be made without the mutual consent of the parties, not to be unreasonably
withheld.  Notwithstanding the foregoing, Canwealth shall be entitled
to issue a press release announcing the execution of this Agreement and the
transactions contemplated hereunder once the Closing occurs.

 

 

 

 

(c)           All
parties hereto agree not to, and shall cause each manager, officer, director or
other affiliate not to, use any confidential information to purchase, sell,
make any short sale of, loan, grant any option for the purchase of, or
otherwise transfer or dispose of any shares of Canwealth Stock or USG1 Stock (or
other securities, warrants or other forms of convertible securities outstanding
or other rights to acquire such securities).   All parties
hereto acknowledge that (i) a purpose of this Section 3.02(c) relating to
confidentiality is so that the parties hereto will be in compliance with
Regulation FD promulgated by the SEC, and other applicable securities laws, and
(ii) if any party hereto does not comply with the provisions of this Section
3.02(c), the parties may be deemed by such action to be in violation of such
laws and regulations, which could have a Material Adverse Effect on the
business of the parties.

 

Section 3.03.         Indemnification by the USG1 Stockholders.    

(a)        From and after the Closing Date, the USG1 Stockholders
shall indemnify and hold harmless Canwealth and its officers, directors, stockholders,
affiliates, employees, agents, representatives and successors in interest (“Canwealth
Indemnitees”) from and against, and
reimburse them for, any and all demands, claims, losses, suits, liabilities,
actions or causes of action, assessments, damages, fines, taxes,
penalties, costs and expenses (including reasonable fees and disbursements of
counsel and amounts paid in settlement) (collectively, “Losses”) incurred or suffered by any Canwealth
Indemnitees arising out of, resulting from, or relating to (i) any breach of
the representations, warranties or covenants made by USG1 contained in Sections
2.02(d), 2.02(g), 2.02(p) or 2.02(q), or (ii) the Dissenting Stockholders or
the Dissenting Shares.  

            (b)        Notwithstanding
anything herein to the contrary, the aggregate amount of any cash payments that
shall be payable by the USG1 Stockholders as a result of any claims for
indemnification made hereunder shall be limited to the amount of the Merger
Consideration and any indemnification in excess of the amount of the Merger
Consideration shall be payable in accordance with subsection (d) hereof.

            (c)        In
the event any Canwealth Indemnitee makes an indemnification claim pursuant to
this Section 3.03 at a time that the Merger Consideration has not yet been paid
to the USG1 Stockholders in full, such Canwealth Indemnitee may offset any
Losses arising out of or relating to any indemnity claims pursuant to the terms
and conditions of this Section 3.03 against the then unpaid Merger
Consideration; provided, that, the Canwealth Indemnitees shall not be entitled
to the aforementioned setoff rights unless all or part of the Losses is not
paid within ten (10) days after Canwealth’s delivery of a written notice to the
USG1 Stockholders of its intent to exercise such setoff rights in accordance
with the terms hereof. 

            (d)       In
the event either (i) an indemnification claim is made hereunder at a time when
the Merger Consideration has been paid in full to the USG1 Stockholders or (ii)
an indemnification claim hereunder involves Losses in
excess of the then unpaid Merger Consideration, then the Canwealth
Indemnitee may offset to the extent of the unpaid Merger Consideration, if any,
in accordance with Section 3.03(c) hereof, and the Surviving
Company shall issue the number of shares of USG1 Stock to the Canwealth
Indemnitee having a fair market value equal to the Merger Consideration
shortfall.  In the event such indemnification claim is made at a time when the
shares of USG1 Stock are being actively traded on a stock exchange or quotation
service, then, for the purposes hereof, the shares of USG1 Stock shall have a
value equal to the average opening and closing prices for the five (5) trading
days prior to the date of the indemnification claim.  In the event such
indemnification claim is made at a time when the shares of USG1 Stock are not
being actively traded on a stock exchange or quotation service, then the
Surviving Company shall retain an independent, credible third party appraiser
to assess the value of the shares of USG1 Stock as of the date of the
indemnification claim, which such appraiser’s findings shall be deemed
conclusive for the purposes hereof.

 

 

 

Section
3.04.         Other
Actions.  Except as contemplated by this Agreement, neither Canwealth
nor USG1 shall, and shall not permit any of its subsidiaries to, take or agree
or commit to take any action that is likely to result in any of its respective
representations or warranties hereunder being untrue or in any of the
conditions to the Merger set forth in Article III not being satisfied.

 

ARTICLE IV

CLOSING DOCUMENTS AND CONDITIONS

 

Section
4.01.         Conditions to Each
Party’s Obligations.  The
obligations of each Party to consummate the Merger and other transactions
described herein shall be subject to the satisfaction or waiver (where
permissible), at or prior to the Effective Time, of the following conditions:

 

(a)           Stockholder
Approval. The Written Consent of a sufficient number of USG1 Stockholders to
constitute the Required Stockholder Approval shall have been obtained in
accordance with the DGCL.

 

(b)           Requisite
Regulatory Approvals and Consents. All authorizations, approvals and
permits required to be obtained from or made with any Governmental Entity in
order to consummate the transactions contemplated by this Agreement (the “Requisite
Regulatory Approvals”), and all Consents from third Persons that are
required in connection with the transactions contemplated by this Agreement,
shall have been obtained or made.

 

Section
4.02.         Conditions
to Obligation of Canwealth. The obligations of Canwealth to consummate
the Merger are subject to the satisfaction or waiver (where permissible) of the
following additional conditions:

 

(a)           Representations
and Warranties. Each of the representations and warranties of USG1 set
forth in this Agreement shall be true and correct as of the date of this
Agreement and as of the Effective Time as though made as of the Effective Time,
except (i) to the extent that such representations and warranties refer
specifically to an earlier date, in which case such representations
and warranties shall have been true and correct as of such earlier date, and
(ii) this condition shall be deemed satisfied unless the incorrectness of such
representations and warranties would, in the aggregate, reasonably be expected
to result in a Material Adverse Effect.

 

 

 

 

(b)           Agreements
and Covenants.  USG1 shall have performed in all material
respects all of its obligations and complied with all of its agreements and
covenants to be performed or complied with by them under this Agreement at or
prior to the Effective Time.

 

(c)           Officer
Certificate.  USG1 shall have delivered to Canwealth a
certificate, dated the Closing Date, signed by the chief executive officer or
chief financial officer of USG1, certifying in such capacity as to the
satisfaction of the conditions specified in Sections 4.02(a), 4.02(b) 
and 4.02(e). 

 

(d)           Secretary’s
Certificate. USG1 shall have delivered to Canwealth a true copy of the
resolutions of USG1 authorizing the execution of this Agreement and the
consummation of the Merger and transactions contemplated herein, certified by
the Secretary of USG1 or similar officer.

 

(e)           USG1
Material Adverse Effect.  No USG1 Material Adverse Effect shall
have occurred since the date of this Agreement.

 

(f)           USG1
Financial Statements.  USG1 shall have provided audited and/or
unaudited financial statements of USG1 as may be required for the Super 8-K.

 

Section
4.03.         Conditions
to Obligation of USG1.  The obligations of USG1 to consummate the
Merger are subject to the satisfaction or waiver (where permissible) of the
following additional conditions:

 

(a)           Representations
and Warranties. Each of the representations and warranties of Canwealth set
forth in this Agreement shall be true and correct as of the date of this
Agreement and as of the Effective Time as though made as of the Effective Time,
except (i) to the extent that such representations and warranties refer
specifically to an earlier date, in which case such representations and
warranties shall have been true and correct as of such earlier date, and
(ii) this condition shall be deemed satisfied unless the incorrectness of
such representations and warranties would, in the aggregate, reasonably be
expected to result in a Material Adverse Effect.

 

(b)           Agreements
and Covenants.  Canwealth shall have performed in all material
respects all of its obligations and complied with all of its agreements and
covenants to be performed or complied with by them under this Agreement at or
prior to the Effective Time.

 

(c)           Officer
Certificate.  Canwealth shall each delivered to USG1 a
certificate, dated the Closing Date, signed by the chief executive officer or
chief financial officer of USG1, certifying in such capacity as to the
satisfaction of the conditions specified in Sections 4.03(a), 4.03(b) 
and 4.03(e). 

 

 

 

 

(d)           Secretary’s
Certificate. Canwealth shall have delivered to USG1 a true copy of the
resolutions of Canwealth authorizing the execution of this Agreement and the
consummation of the Merger and transactions contemplated herein, certified by
the Secretary of Canwealth or similar officer.  

 

(e)           Canwealth
Material Adverse Effect.  No Material Adverse Effect shall have
occurred since the date of this Agreement with respect to Canwealth.

 

ARTICLE V

GENERAL PROVISIONS

 

Section
5.01.         Termination. This
Agreement may be terminated and the Merger may be abandoned at any time prior
to the Effective Time:

 

(a)        by mutual written consent of USG1
and Canwealth, or by mutual action of their respective Boards of Directors;

 

(b)        by either Canwealth or USG1,
if there has been a material violation or breach by the other party of any
covenant, representation or warranty contained in this Agreement, which
violation  or breach (i) would cause the conditions set forth in Article IV not
to be satisfied and (ii) shall not have been waived by the non-breaching party
or cured by the breaching party within thirty (30) days of receipt of written
notice thereof from the non-breaching party, or which by its nature cannot
reasonably be cured prior to December 31, 2012 (the “Outside Date”); or

 

(c)        by either Canwealth or USG1, if
the conditions set forth in Article IV hereof are not each satisfied by the
Outside Date.

 

Section
5.02.         Amendment. This
Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.

 

Section
5.03.         Survival of
Representations, Warranties and Agreements.  All of the representations,
warranties and agreements in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time, for a period of
one year from the Closing Date, except for those related to taxes, which shall
survive as long as the applicable statute of limitations.

 

Section
5.04.         Notices.  Any notice or
communication required or permitted hereunder shall be in writing and either delivered
personally or sent by certified or registered mail, postage prepaid, and shall
be deemed to be given, dated and received when so delivered personally, or, if
mailed, five business days after the date of mailing to the following address,
or to such other address or addresses as such person may subsequently designate
by notice given hereunder:

 

If
to Canwealth:

 

1376 Perrot Blvd. 

 

 

 

Ile
Perrot, Quebec 

Canada J7V 7P2

 

With
a copy to:

 

Westerman
Ball Ederer Miller & Sharfstein, LLP

1201
RXR Plaza

Uniondale,
New York 11556

 

If
to USG1 or the USG1 Stockholders:

 

Kimi
Royer

1126
Madison 9517

Fredericktown,
MO 63645

 

Section
5.05.         Interpretation:  Certain
Definitions. When a reference is made in this Agreement to Sections,
such reference shall be to a Section of this Agreement unless otherwise
indicated.  Whenever the word “include,” “includes” or “including” is
used in this Agreement, it shall be deemed to be followed by the words “without
limitation.”  The phrase “made available” in this Agreement shall
mean that the information referred to has been made available if requested by
the party to whom such information is to be made available.  As used
in this Agreement, “affiliate” means, as to the person specified, any person
controlled, controlled by, or under common control with such person, and
“person” means any individual, corporation, general or limited partnership,
limited liability company, joint venture, estate, trust or other entity.

 

Section
5.06.         Counterparts. This
Agreement may be executed in two or more counterparts, all of which shall be
considered one and the same agreement, and shall become effective when two or
more counterparts have been signed by each of the parties and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart.  Signatures hereto transmitted via email, facsimile or other form
of electronic image shall be deemed original signatures.

 

Section
5.07.         Entire
Agreement; No Third-Party Beneficiaries. This Agreement (together with
any other documents and instruments referred to herein) (a) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereto
and (b) is not intended to confer upon any person other than the parties hereto
any rights or remedies hereunder.

 

Section
5.08.         Governing
Law. This Agreement shall be governed and construed in accordance with
the laws of the State of Delaware, without giving effect to the principles of
conflicts of law thereof.

 

Section
5.09.         Assignment. Neither
this Agreement nor any of the rights, interests or obligations hereun­der shall
be assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties, except that Canwealth may
assign, in its sole discretion, any or all of its
rights, interests and obligations hereunder to any newly formed direct or
indirect wholly ­owned subsidiary of Canwealth.  Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of and be enforceable by the parties and their respective successors and
assigns.

 

 

 

 

Section
5.10.         No
Remedy in Certain Circumstances. Each party agrees that, should any
court or other competent authority hold any provision of this Agreement or part
hereof to be null, void or unenforce­able, or order any party to take any
action inconsistent herewith or not to take an action consistent herewith or required
hereby, the validity, legality and enforceability of the remaining provisions
and obligations contained or set forth herein shall not in any way be affected
or impaired thereby, unless the foregoing inconsistent action or the failure to
take an action constitutes a material breach of this Agreement or makes the
Agreement impossible to perform in which case this Agreement shall
terminate.  Except as otherwise contemplated by this Agreement, to
the extent that a party hereto took an action inconsistent herewith or failed
to take action consistent herewith or required hereby pursuant to an order or
judgment of a court or other competent authority, such party shall not incur
any liability or obligation unless such party breached its obligations under this
Agreement or did not in good faith seek to resist or object to the imposition
or entering of such order or judgment.

 

Section
5.11.         Enforcement
of the Agreement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached.  It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States located in the State of New York, this being in addition to any
other remedy to which they are entitled at law or in equity.  In
addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of any federal or state court sitting in New York in the
event any dispute between the parties hereto arises out of this Agreement
solely in connection with such a suit between the parties, (b) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court and (c) agrees that it will not
bring any action relating to this Agreement in any court other than a Federal
or state court sitting in New York.

 

[Remainder of Page Intentionally
Left Blank; Signature Pages Follow] 

  

 

 

 

 

IN
WITNESS WHEREOF, each of the following has caused this Merger Agreement to be
signed by its respective officers thereunto duly authorized, all as of the date
first written above.

 

                                                                                     

                                                                                    CANWEALTH
MINERALS

CORPORATION

                                                                                     

By: ___/s/_Garth
McIntosh_____________

                                                                                          
Name: Garth McIntosh                            

                                                                                          
Title: President, ICBS, Ltd.

 

 

USG1, INC.

                                                                                     

By: ___/s/_Kimi
Royer_________________

                                                                                          
Name: Kimi Royer

                                                                                          
Title: CEO, USG1, Inc.

 

 

_____/s/_Kimi
Royer__________________

                                                                                    Kimi Royer, as
Stockholder Representative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

USG1,
Inc.

Schedule A

WRITTEN CONSENT 

OF THE STOCKHOLDERS

 OF USG1, INC. 

WHEREAS,  the undersigned is a stockholder of USG1, Inc., a Delaware corporation (“USG1”); and 

WHEREAS, Canwealth Minerals Corporation (“Canwealth”) is a
Delaware corporation; and 

WHEREAS,  the Board of
Directors of USG1 (the “Board”) has approved the proposed business combination
as set forth in that certain Agreement and Plan of Merger, by and among USG1,
Canwealth and Kimi Royer as Stockholder Representative (the “Merger Agreement”)
and has adopted the Merger Agreement; 

NOW,
THEREFORE, IT IS HEREBY

RESOLVED,  that the
undersigned hereby approves the business combination of USG1 and Canwealth and
the Merger Agreement in all respects. 

RESOLVED,  that the Chief Executive Officer of USG1
(the “CEO”) be and hereby is authorized to execute and deliver the Merger Agreement
and each of the agreements contemplated thereby, each in the form previously
provided to the Board, with such changes or modifications as the CEO shall deem
necessary or desirable.

RESOLVED,  that the CEO be, and hereby is, authorized
and empowered to take any and all such further action, to execute and deliver
any and all such further instruments, documents and certificates, and to pay
such expenses, in the name of and on behalf of USG1, as the CEO may deem
necessary or advisable to effectuate the purposes and intent of the resolutions
hereby adopted, the taking of such actions, the execution and delivery of such
agreements, instruments, documents and certificates and the payment of such
expenses by the CEO to be conclusive evidence of his authorization hereunder
and the approval thereof.

THIS WRITTEN CONSENT MAY BE EXECUTED IN MULTIPLE
COUNTERPARTS

 

[Remainder of page intentionally left blank; signature
page follows.] 

 

 

 

 

 

[Signature Page to Written Consent of the
Stockholders of USG1, Inc.] 

 

 

 

______________________________________

Name:

Title:

 

Number of shares of USG1 common
stock held: _________

 

Date:
__________________________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	
  USG1, Inc. Capitalization
  Schedule

  
	
  Schedule B

  
	
   

  Authorized:

  
	
  Common Shares

  	
  100,000,000 

  
	
  Preferred Shares

  	
  20,000,000 

  
	
   

  Outstanding Common:

  
	
  Shareholder

  	
  Common Shares

  	
  Percent Owned

  
	
  ICBS, Ltd.

  	
  30,918,462 

  	
  60.90%

  
	
  Kelly Taylor

  	
  8,833,846 

  	
  17.40%

  
	
  Perry Radin

  	
  4,416,923 

  	
  8.70%

  
	
  Kimi Royer

  	
  550,000 

  	
  1.08%

  
	
  Robert Blessing

  	
  550,000 

  	
  1.08%

  
	
  Preston Jones

  	
  550,000 

  	
  1.08%

  
	
  Roger Dredge

  	
  350,000 

  	
  0.69%

  
	
  Trevor Stephens

  	
  350,000 

  	
  0.69%

  
	
  Brian Rietze

  	
  300,000 

  	
  0.59%

  
	
  Ryan Schramm

  	
  300,000 

  	
  0.59%

  
	
  Tiber Creek Corp

  	
  250,000 

  	
  0.49%

  
	
  Jason Cornelius

  	
  250,000 

  	
  0.49%

  
	
  Brenda Sullivan

  	
  250,000 

  	
  0.49%

  
	
  Ron Moss

  	
  150,000 

  	
  0.30%

  
	
  Paul Brown

  	
  150,000 

  	
  0.30%

  
	
  Louis Martone

  	
  150,000 

  	
  0.30%

  
	
  Terrance Frost

  	
  150,000 

  	
  0.30%

  
	
  Jeffery Hilbert

  	
  150,000 

  	
  0.30%

  
	
  Vera Lvovich

  	
  150,000 

  	
  0.30%

  
	
  William Bernard

  	
  150,000 

  	
  0.30%

  
	
  Tino Romagnoli

  	
  150,000 

  	
  0.30%

  
	
  Ramsey Schantz

  	
  150,000 

  	
  0.30%

  
	
  Phil Clodgo

  	
  150,000 

  	
  0.30%

  
	
  Chris Strobel

  	
  100,000 

  	
  0.20%

  
	
  Zach Blessin

  	
  100,000 

  	
  0.20%

  
	
  Justin Blessin

  	
  100,000 

  	
  0.20%

  
	
  Marc Quattrini

  	
  100,000 

  	
  0.20%

  
	
  Bernie Smith

  	
  50,000 

  	
  0.10%

  
	
  Edward Clausin

  	
  50,000 

  	
  0.10%

  
	
  Brian Murphy

  	
  50,000 

  	
  0.10%

  
	
  Cyndi Barnett

  	
  50,000 

  	
  0.10%

  
	
  Daniel Mara

  	
  50,000 

  	
  0.10%

  
	
  Daniel Kay

  	
  50,000 

  	
  0.10%

  
	
  Erica Mattson

  	
  50,000 

  	
  0.10%

  
	
  Joseph Hurley

  	
  50,000 

  	
  0.10%

  
	
  Matthew Hoffman

  	
  50,000 

  	
  0.10%

  
	
  Mike Cocchimiglio

  	
  50,000 

  	
  0.10%

  
	
  Paul Apo

  	
  50,000 

  	
  0.10%

  
	
  Kenneth Wininger

  	
  50,000 

  	
  0.10%

  
	
  Randy Stahla

  	
  50,000 

  	
  0.10%

  
	
  Robert Wall

  	
  50,000 

  	
  0.10%

  
	
  Roy Hubbard

  	
  50,000 

  	
  0.10%

  
	
  Peter Jett

  	
  50,000 

  	
  0.10%

  
	
  Wayne Watson

  	
  50,000 

  	
  0.10%

  
	
  Winston Prince

  	
  50,000 

  	
  0.10%

  
	
  Chris
  Penuel

  	
  50,000 

  	
  0.10%

  
	
  Aninash Mistri

  	
  50,000 

  	
  0.10%

  
	
  Total Outstanding

  	
  50,769,231 

  	
  100%

  
	
   

  Outstanding Preferred:

  	 

	
  Shareholder

  	
  Preferred Shares

  	
  Percent Owned

  	 

	
  None

  	 

	
   

  Options, Warrants, Grants, etc.

  	 

	
  Shareholder

  	
  Type

  	
  Percent Owned

  	 

	
  None

  	 

	 	 	 	 	 	 	 

 

 

 

USG1, Inc.

Disclosure Schedule

 

Exception to Sec. 2.02(d)(iv): Timely filing of all
franchise taxes

When our corporation was formed in February 2010 with the help outside counsel,
we believed that the franchise taxes for 2010 with the State of Delaware had been paid at that time.  We were unaware that the 2010 franchise taxes had not
been paid.  When we went to file our 2011 franchise taxes online, we were
closed out from making the online filing.  We contacted the Delaware Division
of Corporations it was discovered that 2010 franchise taxes had not been paid. 
They likely contacted our Delaware registered agent Inc. Plan of Wilmington, DE
but we did not know that we were delinquent.  We were able to remedy the
situation later by filing the past due 2010 and 2011 franchise taxes with at
the same time and paid a penalty and interest for being delinquent.

All franchise taxes have been paid, and the exception is
that they were not timely filed as discussed in Sec. 2.02(d)(iv). 

All other required regulatory and tax filings have been made
timely to our best knowledge.

 

Schedule 2.02(b) – Subscriptions, Warrants, etc.

None

 

Schedule 2.02(h) – Litigation

None

             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

	
  USG1, Inc.

  
	
  Schedule 2.02(n)

  
	
   

   

  Bank Accounts, Money Market Accounts,
  Securities:

  
	
   

  Bank Accounts:

  
	
  Bank:

  	
  Sun Security Bank

  	
  (Bank was closed by FDIC)

  
	
  Account #:

  	
  527380801

  
	
  Authorized Signers:

  	
  Kimi Royer

  
	
   

  Bank:

  	
   

  Great Southern Bank

  	
   

  (Assumed our bank account in FDIC closing)

  
	
  Account #:

  	
  527380801

  
	
  Authorized Signers:

  	
  Kimi Royer

  
	
   

  Power of Attorney: 

  
	
  - None

  
	
   

  Individuals Who are Authorized to Act on
  Behalf of USG1 (other than Officers and Directors): 

  
	
  - None

  
	
   

  Disbursements For Last 12 Months:

  
	
  Type

  	
  Date

  	
  Payee

  	
  Account

  	
  Amount

  
	
  Check

  	
  08/10/2011

  	
  Kimi Royer

  	
  64900 · Office Supplies

  	
  -201.84

  
	
  Fee

  	
  08/23/2011

  	
  Sun Security Bank

  	
  60400 · Bank Service Charges

  	
  -19.50

  
	
  Wire

  	
  12/09/2011

  	
  KCCW Accountancy

  	
  66700 · Professional Fees

  	
  -4,000.00

  
	
  Fee

  	
  12/09/2011

  	
  Great Southern Bank

  	
  60400 · Bank Service Charges

  	
  -20.00

  
	
  Fee

  	
  12/12/2011

  	
  Great Southern Bank

  	
  60400 · Bank Service Charges

  	
  -20.00

  
	
  Check

  	
  03/28/2012

  	
  KCCW Accountancy

  	
  66700 · Professional Fees

  	
  -2,500.00

  
	
  Check

  	
  07/24/2012

  	
  State of Delaware

  	
  60600 · Business Taxes and Licenses

  	
  -1,207.50

  
	
  Check

  	
  07/30/2012

  	
  BCL Technologies

  	
  66700 · Professional Fees

  	
  -1,000.00

  
	 	 	 	 	 	 	 	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Canwealth Minerals Corporation

Disclosure
Schedule

 

 

Schedule
2.03(b) – Subscriptions, Warrants, etc.

 

None

 

 

Schedule
2.03(c) – Litigation

 

NoneDR - 6.30.2012 - Ex 10.1

EXHIBIT 10.1

INVENTORY LOAN AND SECURITY AGREEMENT
by and between 
RFA PMR LOANCO, LLC
and
DPM ACQUISITION, LLC

AS OF MAY 21, 2012

1

	
					
	TABLE OF CONTENTS

	 
	 
	 
	 

	1.
	Definitions and Construction
	6
	

	 
	1.1
	Definitions
	6
	

	 
	1.2
	Interpretation
	13
	

	 
	1.3
	Schedules and Exhibits
	14
	

	 
	1.4
	Accounting Principles
	14
	

	 
	 
	 
	 

	2.
	Inventory Loan
	14
	

	 
	2.1
	The Inventory Loan
	14
	

	 
	2.2
	Use of Proceeds; Netting of Advances
	14
	

	 
	2.3
	Evidence of Indebtedness; Note
	14
	

	 
	2.4
	Amounts in Excess of Borrowing Base
	15
	

	 
	2.5
	Interest
	15
	

	 
	2.6
	Payments
	15
	

	 
	2.7
	Late Charge
	16
	

	 
	2.8
	Loan Costs
	16
	

	 
	2.9
	Limitation of Interest; Usury Savings Clause
	17
	

	 
	2.10
	Reinstatement of Obligations and Liens
	17
	

	 
	 
	 
	 

	3.
	Collateral
	17
	

	 
	3.1
	Grant of Lien
	17
	

	 
	3.2
	[Reserved]
	17
	

	 
	3.3
	General and Continuing Lien
	17
	

	 
	3.4
	Additional Documents and Future Actions
	17
	

	 
	3.5
	Release of Inventory Collateral
	18
	

	 
	3.6
	Total Release
	18
	

	 
	 
	 
	 

	4.
	Conditions Precedent
	18
	

	 
	4.1
	Conditions Precedent to the Initial Advance
	18
	

	 
	4.2
	Conditions Precedent to Every Advance
	19
	

	 
	4.3
	Funding Procedures
	20
	

	 
	4.4
	No Waiver
	20
	

	 
	 
	 
	 

	5.
	General Representations, Warranties and Covenants
	20
	

	 
	5.1
	Organization; Power; Authorization
	20
	

	 
	5.2
	Provision of Information
	20
	

	 
	5.3
	Names and Addresses
	21
	

	 
	5.4
	Licenses
	21
	

	 
	5.5
	Compliance with Legal Requirements
	21
	

	 
	5.6
	Taxes
	21
	

	 
	5.7
	Litigation Proceedings
	21
	

	 
	5.8
	Pension Plans
	21
	

	 
	5.9
	Financial Statement and Financial Condition
	22
	

	 
	5.10
	Solvency
	22
	

	 
	5.11
	Investment Company
	22
	

	 
	5.12
	Enforceability
	22
	

2

	
					
	 
	5.13
	No Defaults
	22
	

	 
	5.14
	Use of Proceeds/Margin Stock
	22
	

	 
	5.15
	Labor Relations
	22
	

	 
	5.16
	Broker's Fees
	22
	

	 
	5.17
	Inspections
	23
	

	 
	5.18
	Books and Records
	23
	

	 
	5.19
	Full Disclosure
	23
	

	 
	5.20
	Change of Control
	23
	

	 
	 
	 
	 

	6.
	Representations, Warranties and Covenants With Respect to the Inventory Collateral, the Vacation Club and Component Sites
	23
	

	 
	6.1
	Vacation Club Declaration
	23
	

	 
	6.2
	Legal Requirements
	23
	

	 
	6.3
	Liens
	23
	

	 
	6.4
	Other Restrictions
	24
	

	 
	6.5
	Inventory Collateral
	24
	

	 
	6.6
	Taxes
	24
	

	 
	6.7
	Management Agreements
	24
	

	 
	6.8
	Cessation of Business
	24
	

	 
	6.9
	Pricing
	24
	

	 
	6.10
	Transactions with Affiliates
	24
	

	 
	 
	 
	 

	7.
	Reporting Requirements
	24
	

	 
	7.1
	Annual Financial Statements
	24
	

	 
	7.2
	Quarterly Financial Statements
	24
	

	 
	7.3
	Monthly Borrowing Base Shortfall
	25
	

	 
	7.4
	Budgets and Assessments
	25
	

	 
	7.5
	Audit Reports
	25
	

	 
	7.6
	Notice of Default or Event of Default
	25
	

	 
	7.7
	Notice of Claimed Default
	25
	

	 
	7.8
	Material Adverse Developments
	25
	

	 
	7.9
	Other Information
	26
	

	 
	 
	 
	 

	8.
	Events of Default
	26
	

	 
	8.1
	Payments
	26
	

	 
	8.2
	Covenant Defaults
	26
	

	 
	8.3
	Warranties or Representations
	26
	

	 
	8.4
	Enforceability of Liens
	26
	

	 
	8.5
	Involuntary Proceedings
	26
	

	 
	8.6
	Proceedings
	24
	

	 
	8.7
	Attachment; Judgment; Tax Liens
	27
	

	 
	8.8
	Documents
	27
	

	 
	8.9
	Material Adverse Effect
	27
	

	 
	8.10
	Default by Borrower Under Other Agreements
	27
	

	 
	8.11
	Breach of Other Agreements
	27
	

	 
	8.12
	Fraud
	27
	

	 
	8.13
	Change of Control
	27
	

3

	
					
	 
	8.14
	Cessation of Sales or Business
	27
	

	 
	 
	 
	 

	9.
	Termination of Obligation to Advance/Remedies
	27
	

	 
	9.1
	Termination of Obligation to Advance
	27
	

	 
	9.2
	Remedies Upon Default
	27
	

	 
	9.3
	Sale of Inventory Collateral
	28
	

	 
	9.4
	Application of Proceeds
	29
	

	 
	9.5
	Delegation of Duties and Rights
	29
	

	 
	9.6
	Lender Not in Control
	29
	

	 
	9.7
	Rights of Lender Regarding Inventory Collateral
	29
	

	 
	9.8
	Waivers
	29
	

	 
	9.9
	Cumulative Rights
	30
	

	 
	9.10
	Diminution in Value of Collateral
	31
	

	 
	9.11
	Discontinuance of Proceedings
	31
	

	 
	9.12
	Indemnification of Lender Parties
	31
	

	 
	 
	 
	 

	10.
	Certain Rights of Lender
	31
	

	 
	10.1
	Suits to Protect the Inventory Collateral
	31
	

	 
	10.2
	Protection of Inventory Collateral
	32
	

	 
	10.3
	Performance by Lender
	32
	

	 
	10.4
	No Liability of Lender
	32
	

	 
	10.5
	Right to Defend Action Affecting Security
	32
	

	 
	10.6
	Indemnities, Loan Costs and Expenses
	32
	

	 
	10.7
	Lender's Right of Set-Off
	32
	

	 
	10.8
	Assignment of Lender's Interest
	32
	

	 
	10.9
	Lender's Appointment as Attorney-in-Fact
	33
	

	 
	 
	 
	 

	11.
	Miscellaneous
	34
	

	 
	11.1
	Notices
	34
	

	 
	11.2
	Survival; Continuation and Reliance
	35
	

	 
	11.3
	Governing Law; Consent to Jurisdiction 
	35
	

	 
	11.4
	Invalid Provisions
	36
	

	 
	11.5
	Successors and Assigns; Third Party Beneficiaries
	36
	

	 
	11.6
	Counterparts; Effectiveness
	37
	

	 
	11.7
	Lender Not Fiduciary
	37
	

	 
	11.8
	Total Agreement; Amendments
	37
	

	 
	11.9
	Consents, Approvals and Discretion
	37
	

	 
	11.10
	Litigation 
	37
	

	 
	11.11
	Consent to Advertising and Publicity of Documents
	38
	

	 
	11.12
	Use of Lender's Name
	38
	

	 
	11.13
	Control of a Material Party
	38
	

	 
	11.14
	Directly or Indirectly
	38
	

	 
	11.15
	Sale of Participation Interests in Inventory Loan
	38
	

	 
	11.16
	Non-Public Information; Confidentiality
	38
	

	 
	11.17
	Headings
	38
	

	 
	11.18
	Borrower's Knowledge
	38
	

	 
	11.19
	Gender
	38
	

4

	
					
	 
	11.20
	Time of the Essence
	38
	

	 
	11.21
	Conflict
	38
	

	 
	 
	 
	 

	 
	 
	 
	 

	Schedules
	 
	 

	 
	 
	 
	 

	Schedule 5.3
	Names and Addresses
	 

	Schedule 6.5
	Permitted Exceptions to Title
	 

	 
	 
	 
	 

	Exhibits
	 
	 

	 
	 
	 
	 

	Exhibit A
	Form of Request for Inventory Loan Advance
	 

5

INVENTORY LOAN AND SECURITY AGREEMENT 
This INVENTORY LOAN AND SECURITY AGREEMENT (this “Agreement”) is made effective as of May 21, 2012, by and between DPM ACQUISITION, LLC, a Delaware limited liability company (“Borrower”) and RFA PMR LOANCO, LLC, a Delaware corporation (“Lender”).  Capitalized terms shall have the meanings give in Section 1 of this Agreement.
RECITALS
WHEREAS, Borrower and PMR Sellers entered into that certain Asset Purchase Agreement dated as of October 24, 2011, as it may be amended from time to time (the “Asset Purchase Agreement (Diamond)”), pursuant to which Borrower has agreed to acquire certain assets of PMR Sellers (as referenced in Section 5 of the Asset Purchase Agreement (Diamond)) pursuant to Section 363 of the Bankruptcy Code (the “Section 363 Sale (Diamond)”);
WHEREAS, Resort Finance America LLC (“RFA”) and PMR entered into that certain Asset Purchase Agreement dated as of October 24, 2011, as it may be amended from time to time (the “Asset Purchase Agreement (RFA)”), pursuant to which RFA has agreed to acquire certain assets of PMR (as referenced in Section 5 of the Asset Purchase Agreement (RFA)) pursuant to Section 363 of the Bankruptcy Code (the “Section 363 Sale (RFA)”);
WHEREAS, on the Closing Date, RFA will assign and transfer all of its rights, title and interest in and to the RFA PMR Owned Vacation Club Loans acquired by RFA pursuant to the Asset Purchase Agreement (RFA) to Lender;
WHEREAS, pursuant to that certain Collateral Recovery and Repurchase Agreement, dated as of the date hereof (the “Repurchase Agreement”), by and among Lender, Borrower and DRFS, Servicer  will recover, on behalf of Lender, certain Defaulted VOPs securing such RFA PMR Owned Vacation Club Loans or, at Borrower's election, the RFA PMR Owned Vacation Club Loans secured by such Defaulted VOPs (in either event, collectively, the “Defaulted Receivables”), which Defaulted VOPs will be purchased by Borrower in accordance with the terms thereof; 
WHEREAS, Borrower has requested that Lender provide debt financing for a portion of the purchase price of the Defaulted Receivables purchased by Borrower pursuant to the Repurchase Agreement, and Lender has agreed to provide such debt financing on the terms and conditions set forth herein; 
WHEREAS, the Pledged Inventory along with other Inventory Collateral serve to secure Borrower's repayment of the Inventory Loan to Lender; and
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; 
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: 
1.Definitions and Construction.
1.1Definitions. The following words and phrases as used in capitalized form in this 

6

Agreement, whether in the singular or plural, shall have the meanings indicated: 
Advance:  A portion of the Inventory Loan advanced from time to time by Lender to Borrower in accordance with the terms of this Agreement.  For the avoidance of doubt, each Advance represents seller financing provided by Lender to Borrower in connection with Borrower's purchase of Defaulted Receivables pursuant to the Repurchase Agreement, and Lender will in no event make or be obligated to make any cash advance in connection with any Advance or the Inventory Loan.  Any reference herein to an Advance or the making of an Advance shall be a reference to a deemed advance of a portion of the Inventory Loan, and not an actual cash advance.  
Affiliate:  With respect to any Person, any Person or entity controlled by, controlling, or under common control with, such Person. 
Aggregate Collateral Value:  With respect to any Inventory Loan Tranche and any date of determination, for each Vacation Ownership Point that remains as part of the Pledged Inventory and was financed by the Advance representing such Inventory Loan Tranche, an amount equal to the product of 15% multiplied by the then-current retail selling price of each such Vacation Ownership Point.
Agreement:  This Inventory Loan and Security Agreement between Borrower and Lender. 
Assessments:  The assessments made against each Vacation Ownership Plan and the Owner thereof pursuant to the terms of the Vacation Club Governing Documents. 
Asset Purchase Agreement (Diamond):  As such term is defined in the Recitals hereto.
Asset Purchase Agreement (RFA):  As such term is defined in the Recitals hereto.
Backstop Agreement:  That certain Portfolio 1 Backstop Agreement, dated as of the date hereof, by and among Lender, DPM Servicer and Sub-Servicer.
Bankruptcy Code:  Title II of the United States Code, 11 U.S.C. §§ 101 et. seq. 
Borrower:  DPM Acquisition, LLC, a Delaware limited liability company.
Borrowing Base:  With respect to an Inventory Loan Tranche, an amount equal to the Aggregate Collateral Value of the Vacation Ownership Points included in the Pledged Inventory relating to such Inventory Loan Tranche. 
Borrowing Base Shortfall:  With respect to any Inventory Loan Tranche and a Monthly Payment Date, the amount by which the unpaid principal balance of such Inventory Loan Tranche exceeds the Borrowing Base of such Inventory Loan Tranche as of the first (1st) day of the calendar month immediately prior to such Monthly Payment Date. 
Business Day:  Each day which is not a Saturday or Sunday or a day on which national banks are legally closed for business in New York, New York or Las Vegas, Nevada. 
Change of Control:  If DRC ceases to own, directly or indirectly, 100% of Borrower. 
Closing Date:  The date on which the asset sale transactions contemplated by the Section 363 Sale (Diamond) and the Section 363 Sale (RFA) are consummated. 
Component Site:   A time-share resort at which Resort Accommodations may be reserved in 

7

connection with the Vacation Club Program.
Component Site Association:  With respect to any Component Site, the related “Underlying Association” as such term is defined in the Vacation Club Declaration.
Component Site Declaration:  With respect to any Component Site, the related “Underlying Plan” as such term is defined in the Vacation Club Declaration.
Debtor Relief Law:  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. 
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 Receivables:  As such term is defined in the Recitals hereto.
Defaulted VOPs:  As such term defined in the Repurchase Agreement.
Diamond Points:  As such term is defined in Section 3.7.
DPM Servicer:  Borrower in its capacity as “DPM Servicer” under the Servicing Agreements, together with its successors and permitted assigns in such capacity. 
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:  DRFS and any other Person that is an Affiliate of DRC or DRFS which enter into a Material Agreement with the Borrower in connection with the Vacation Club, a Component Site, the Vacation Club Association, a Component Site Association or this Agreement. 
Event of Default:  Each event described in Section 8. 
Financial Statements:  The monthly, quarterly and annual balance sheets, results of operations and statements of income and expense, and the related notes and schedules, 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.

8

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 and representatives, as well as their respective heirs, personal representatives, successors and assigns. 
Inventory Collateral:  Collectively, all now owned or hereafter existing or acquired right, title and interest of Borrower in and to all of the following: 
(a)All existing and future Pledged Inventory, and all extensions, betterments, substitutions and replacements thereof; 
(b)All existing and future documents, instruments, accounts, chattel paper, rights to proceeds and general intangibles relating to the Pledged Inventory; 
(c)All existing and future books, records, reports, computer tapes, computer disks and software relating exclusively to the Pledged Inventory or any other Inventory Collateral;
(d)All existing and future rights of Borrower as the owner of the Pledged Inventory, including without limitation all rights of an owner of Vacation Ownership Points under the Vacation Club Governing Documents; 
(e)All existing and future cash, money, deposit accounts collection accounts, clearing accounts, escrow accounts or reserve account into which cash or proceeds from Pledged Inventory sales are deposited at any time, 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 prior to the release of such Pledged Inventory from the Lien of the Lender; and
(f)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. 
Inventory Loan Interest Rate:  A variable rate, adjusted as of the first day of each calendar month, equal to the sum of LIBOR as of the first day of the applicable calendar month, plus 6.00% per annum; provided that LIBOR, when used to calculate the Inventory Loan Interest Rate, shall never be less than 2.00% nor greater than 4.00% per annum. 
Inventory Loan Maturity Date:  With respect to any Inventory Loan Tranche, the earlier to occur of (x) the date that is seven (7) years following the date on which the related Advance is made and (y)  the date on which the entire outstanding principal amount of the Inventory Loan is required to be repaid pursuant to the terms of this Agreement, whether by acceleration or otherwise. 
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 Loan Tranche:  Each portion of the Inventory Loan represented by an Advance made on the Closing Date or a Repurchase Date.
Legal Requirements:  All federal, state and local ordinances, laws, regulations, orders, judgments, decrees, determinations and other legal restrictions governing the Vacation Club, any Component Site, the Material Parties, their businesses or operations, the sale of Vacation Ownership Plans in the Vacation Club, the financing of sales of Vacation Ownership Plans in the Vacation Club, the marketing of Vacation Ownership Plans in the Vacation Club and all matters related thereto. 
Lender:  RFA PMR, in its capacity as Lender hereunder, its successors and assigns. 

9

LIBOR:  The rate that is published on the Effective Date in the “Money Rates” section of The Wall Street Journal as the London Interbank Offered Rates (LIBOR), and shall be adjusted as of the first day of each calendar month hereafter to the rate published as the London Interbank Offered Rates (LIBOR) in the “Money Rates” section of the Wall Street Journal on the first day on which an edition of the Wall Street Journal is published during the month.  In the event that the Wall Street Journal is no longer published or the London Interbank Offered Rates (LIBOR) is not published in the Wall Street Journal, Borrower and Lender will agree on a substitute source for determining LIBOR or a rate comparable thereto.
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 Costs:  All reasonable out-of-pocket costs, expenses and fees incurred by or on behalf of Lender in connection with the Inventory Loan, including without limitation, those related to enforcing this Agreement and all other 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; and (c) all costs, fees and expenses of every kind and character incurred in (i) the 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.  Notwithstanding the foregoing to the contrary, Lender agrees not to include any third-party monitoring or consulting costs unless such costs are incurred from and after the occurrence and continuance of an Event of Default.  Further, Lender shall not include any Lender's costs incurred in PMR's bankruptcy, including Lender's legal fees, but Lender may include, as part of Loan Costs hereunder, and Borrower shall promptly pay upon submission of an invoice therefor, the legal fees and reasonable costs and disbursements of Willkie Farr & Gallagher LLP incurred in connection with the negotiation, drafting, review and execution of this Agreement, the Repurchase Agreement and the other Loan Documents (but exclusive of the Servicing Agreements and the Backstop Agreement). 
Loan Documents:  Collectively, this Agreement, the Inventory Loan Note, the Release, financing statements covering the Inventory Collateral, to be filed from time to time 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 contemplated by the Loan Documents, and to effectuate the transactions contemplated herein. 
Management Agreements:  The existing management agreements and/or sub-management agreements entered into by the Vacation Club Association (or, with respect to any Component Site, the related Component Site Association), pursuant to which the Vacation Club Manager or such other applicable Person is to provide management and other services with respect to the Vacation Club and/or Component Sites as contemplated by the Vacation Club Governing Documents.
Material Adverse Effect:  A material adverse effect on any of the following: (a) the property, business, operations or financial condition of Borrower, (b) the ability of Borrower or a Material Party to perform each of their respective obligations under any of the Loan Documents, (c) the legality, validity or enforceability 

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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 Agreement(s):  (a) The Vacation Club Governing Documents, (b) each Management Agreement, and (c) all other contracts, agreements and arrangements relating to the transactions between Borrower and Lender as contemplated by this Agreement involving payments in excess of $200,000 in any one 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, which in the case of subsection (c) must be in form and content reasonably acceptable to Lender.
Material Party:  Borrower, DRC and any other DRC Affiliate directly involved in the business of Borrower. 
Monthly Amortization Payment:  With respect to any Inventory Loan Tranche, the lesser of (x) an amount equal to (i) the outstanding principal balance of such Inventory Loan Tranche as of the first day of the calendar month immediately preceding the 25th Monthly Payment Date following the date on which the related Advance was made, divided by (ii) 60, and (y) the outstanding principal balance of such Inventory Loan Tranche.  
Monthly Amortization Period:  With respect to any Inventory Loan Tranche, the period commencing on the 25th Monthly Payment Date following the date on which the related Advance was made, and ending on the earlier of (x) the applicable Inventory Loan Maturity Date and (y) the date on which such Inventory Loan Tranche has been repaid in full.
Monthly Payment Date:  The fifth (5th) day of each calendar month or, if such day is not a Business Day, the next following Business Day.
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 and Loan Costs 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. 
Owner:  Any Person who owns one or more Vacation Ownership Plans and Borrower with respect to all Vacation Ownership Points that have been reacquired by Borrower or an Affiliate of Borrower in connection with Borrower's purchase of Defaulted Receivables. 
Permitted Exceptions:  Those permitted Liens and exceptions to title to the Inventory Collateral described on Schedule 6.5 attached hereto. 
Per Point Release Fee:  With respect to any Inventory Loan Tranche, an amount equal to (i) the initial outstanding principal balance of the Advance made in respect of such Inventory Loan Tranche divided by (ii) the number of Vacation Ownership Points financed by such Advance at the time of Borrower's purchase of the Defaulted Receivables.
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. 

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Pledged Inventory:  Any Vacation Ownership Point recovered in respect of a Defaulted Receivable purchased by Borrower from Lender (including, as applicable, any and all right, title interest in and to the Vacation Ownership Plan (if any) relating to such Vacation Ownership Points).
PMR:  Pacific Monarch Resorts, Inc., a California corporation. 
PMR Sellers:  Each of PMR, Vacation Interval Realty, Inc., Vacation Marketing Group, Inc., MGV Cabo, LLC, Desarrollo Cabo Azul, S. de R.L. de C.V. and Operadora MGVM S. de R.L. de C.V.
Public Offering Statement:  Collectively, the approved public report, permit or public offering statement for the Vacation Club or a Component Site in each jurisdiction in which sales of Vacation Ownership Plans are made or the Vacation Club or Component Sites are otherwise required to be licensed, approved or registered. 
Register:  The meaning set forth in Section 10.8(b).
Reimbursement Agreement:  That certain Reimbursement Agreement dated as of October 24, 2011, by and between Borrower, as buyer, and Lender, as obligor.
Release:  A form of release of Lender's Lien approved as of the Closing Date by Borrower, Lender and First American Title Insurance Company, as it may be amended, modified or restated from time to time, which Release shall be used by Lender to release its Lien on Inventory Collateral pursuant to Sections 3.4 and 3.5 herein.
Repurchase Agreement:  As such term is defined in the Recitals hereto.
Repurchase Date:  Each day on which the Borrower purchases Defaulted Receivables from Lender pursuant to, and in accordance with the terms and conditions set forth in, the Repurchase Agreement.
Resort Accommodations:  As such term is defined in the Vacation Club Declaration.
RFA PMR:  RFA PMR LoanCo, LLC, a Delaware limited liability company, its successors and assigns.
RFA PMR Owned Vacation Club Loan(s):  One or more Vacation Club Loans which at any time make up RFA PMR's receivables portfolio related to the Vacation Club, title to all of which Vacation Club Loans is owned by RFA PMR as of the Closing Date pursuant to the Section 363 Sale Agreement (RFA). 
SCRA:  The Servicemembers' Civil Relief Act, formerly known as the Soldiers' and Sailors' Civil Relief Act. 
Section 363 Sale (Diamond):  As such term is defined in the Recitals hereto.
Section 363 Sale (RFA):  As such term is defined in the Recitals hereto.
Servicer:  DPM Servicer and Sub-Servicer, collectively.
Servicing Agreements:  Each of the Portfolio 1 Servicing Agreement and Portfolio 2 Servicing Agreement, dated as of the date hereof, by and among Lender, DPM Servicer and Sub-Servicer.
Sub-Servicer:  DRFS in its capacity as “Sub-Servicer” under the Servicing Agreements, together 

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with its successors and permitted assigns in such capacity. 
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 (exclusive, solely for purposes of any indemnification obligation of Borrower hereunder, of any Taxes for which Borrower is not responsible under the Reimbursement Agreement). 
Vacation Club:  Monarch Grand Vacations, the vacation ownership program established pursuant to the Vacation Club Declaration.
Vacation Club Association:  Monarch Grand Vacations Owners Association, a California nonprofit, mutual benefit corporation.
Vacation Club Declaration:  The Master Declaration of Restrictions and Bylaws for Monarch Grand Vacations dated as of December 15, 1998.
Vacation Club Governing Documents:  The Vacation Club Declaration, each Component Site Declaration, the Governing Documents of the Vacation Club Association, the Governing Documents of each Component Site Association, any and all rules and regulations from time to time adopted by the Vacation Club Association (or, with respect to a Component Site, the related Component Site Association), the Vacation Club Development Agreement and the Vacation Club Trust Agreement, as each may be amended from time to time.
Vacation Club Loan:  One or more loans to a Vacation Club Member and secured by the related Vacation Ownership Plan, which results from the sale of a Vacation Ownership Plan to such Vacation Club Member.
Vacation Club Manager:  With respect to the Vacation Club, the related managing agent or subagent engaged by the Vacation Club Association for the management and administration of the Vacation Club.
Vacation Club Member:  An Owner of a Vacation Ownership Plan (other than Borrower).
Vacation Club Trust:  The trust created pursuant to the terms of the Vacation Club Trust Agreement and for which the Vacation Club Trustee is the trustee.
Vacation Club Trust Agreement:  That Trust Agreement dated as of December 15, 1998, and settled by Borrower, pursuant to which Vacation Club Trustee holds title to the Resort Accommodations which have been dedicated to the Vacation Club for the benefit of Vacation Club Members which are not coupled with an interest in real property.
Vacation Club Trustee:  The trustee under the Vacation Club Trust Agreement.  
Vacation Ownership Plan:  As defined in the Vacation Club Declaration and including any appurtenant Vacation Ownership Points.
Vacation Ownership Point(s):  As defined in the Vacation Club Declaration; provided, that for purposes of the Loan Documents, any reference to Vacation Ownership Points shall, as applicable, include the beneficial ownership interest in the Vacation Club Trust associated therewith.
1.2Interpretation. 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 

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“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 cured (if capable of cure) or otherwise 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. 
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.Inventory Loan. 
2.1    The Inventory Loan.  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)Closing Date Advance.  If requested by Borrower, Lender shall make an Advance on the Closing Date in an aggregate principal amount equal to the product of (i) $6.75, (ii) 90% and (iii) the aggregate Defaulted VOPs represented by, evidencing or securing the Defaulted Receivables purchased by Borrower on the Closing Date pursuant to the Repurchase Agreement.
(b)Quarterly Advances.  Lender shall make an Advance on each quarterly Repurchase Date in an aggregate principal amount equal to the product of (i) $6.75, (ii) 90% and (iii) the aggregate Defaulted VOPs represented by, evidencing or securing the Defaulted Receivables purchased by Borrower on such Repurchase Date pursuant to the Repurchase Agreement. 
(c)No Obligation to Repurchase Absent Advance.  Lender and Borrower agree that Borrower has no obligation to repurchase any Defaulted Receivable in the absence of an Advance to finance such repurchase.
2.2    Use of Proceeds; Netting of Advances.  
(a)    Borrower agrees to use the proceeds of Advances under the Inventory Loan solely to acquire Defaulted Receivables from Lender pursuant to the Repurchase Agreement.  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.  Additionally, and notwithstanding anything to the contrary which may be contained herein or in the other Loan Documents, if Lender declines to make an Advance requested by Borrower, Borrower shall not be obligated to purchase the related Vacation Ownership Points associated with an Defaulted Receivable, absent such Advance.
(b)    It is understood and agreed that because Lender is providing seller financing for Borrower's purchase of Defaulted Receivables from Lender, all Advances shall be netted against the total purchase price of the Defaulted Receivables being purchased on the applicable Repurchase Date, and Lender shall have no obligation to provide Borrower with any cash advance or other cash proceeds in respect of any Advance.  Any reference herein to the “proceeds” of an Advance shall be to the deemed proceeds of such Advance, not to actual cash proceeds.
2.3    Evidence of Indebtedness; Note.

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(a)           Book Entry; Inventory Loan Note.  The Inventory 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 Inventory Loan.  At closing, Borrower shall execute and deliver to Lender an Inventory Loan Note payable to Lender, which shall evidence the Loan in addition to such accounts or records.  
(b)    Use of Register.  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.  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.
2.4    Amounts in Excess of Borrowing Base.  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 Borrowing Base (taking into account the Vacation Ownership Points to be included in the Pledged Inventory on the applicable Repurchase Date).  Lender shall have the right, but not the obligation, to fund amounts in excess of the Borrowing Base from time to time to pay accrued and unpaid interest, to pay fees due under the Loan Documents (including late charges pursuant to Section 2.7), to pay Loan Costs (including pursuant to Section 2.8) or indemnification obligations of Borrower under the Loan Documents, or to correct or cure any Event of Default.  Borrower agrees that the correcting or curing by Lender of an Event of Default shall not cure the 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 Inventory Loan Interest Rate and shall also be secured by the Inventory Collateral and the other Loan Documents.  All of the excess amounts described above are not refundable in whole or in part.
2.5    Interest. 
(a)    Accrual of Interest.  The outstanding principal balance of each Inventory Loan Tranche included in the Inventory Loan shall bear interest in arrears at the Inventory Loan Interest Rate. All of such interest shall be due and payable as set forth in Section 2.6(a). The outstanding principal balance of the Inventory Loan Tranche shall bear interest as of the date of the related Advance through Lender's receipt of repayment of such Inventory Loan Tranche.  If any payment is received by Lender later than 2:00 p.m., Eastern Time, then interest accrual shall be through the next Business Day following such receipt.  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 applicable 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. 
(b)    Actual/360.  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. 
2.6    Payments. 
(a)    Inventory Loan. Borrower agrees punctually to pay or cause to be paid to 

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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: 
(i)Interest.  Interest only on the outstanding principal balance of each Inventory Loan Tranche shall accrue and is payable quarterly on the Monthly Payment Date occurring in each of January, April, July and October for the term of the Inventory Loan.  
(ii)Principal. 
(A)Payment in Full at Maturity.  The outstanding principal balance of each Inventory Loan Tranche, 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 applicable Inventory Loan Maturity Date. 
(B)Mandatory Monthly Amortization.  On each Monthly Payment Date, Borrower shall pay Lender an amount equal to the aggregate Monthly Amortization Payments due and owing in respect of each Inventory Loan Tranche for which the Monthly Amortization Period has commenced. 
(C)Borrowing Base Shortfall Payments.  On each Monthly Payment Date, Borrower shall pay Lender the amount of any Borrowing Base Shortfall as a mandatory prepayment of the related Inventory Loan Tranche.
(iii)Voluntary Prepayment of Inventory Loan.  Borrower may prepay any Inventory Loan Tranche, in whole or in part, at any time without premium or penalty.  In connection therewith, Borrower may pay, as Per Point Release Fees for any Inventory Loan Tranche, an amount in excess of the principal otherwise payable pursuant to this Section 2.6(a) in respect of such Inventory Loan Tranche.
(b)    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, 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 (such amounts to be applied to each Inventory Loan Tranche pro rata based upon the amounts then due and payable with respect thereto on the applicable Monthly Payment Date).  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.
2.7    Late Charge.  In the event that any payment required hereunder is not received by Lender within five (5) days after the due date, Lender may charge Borrower 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. 
2.8    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.  The provisions of this Section 2.8 shall survive termination of this Agreement.

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2.9    Limitation on Interest; Usury Savings Clause. 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, 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 2.9, and this Section shall govern over all other provisions in any document or agreement now or hereafter existing. This Section 2.9 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.
2.10    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.  
3.Collateral. 
3.1    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.
3.2    [Reserved].
3.3    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 Code of the state of New York.  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 Code of the state of New York, all at Lender's sole election. Subject to the release provisions in Sections 3.4 and 3.5 herein, the above-described Liens shall continue in full force and effect until all Obligations have been fully and finally paid, performed and satisfied.
3.4    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 

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instruments, documents (including deeds, assignments and mortgages) or information as Lender may in its discretion deem reasonably 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 from and after the occurrence of an Event of Default to protect the Inventory Collateral and its interests therein and its rights hereunder. 
3.5    Release of Inventory Collateral. 
(a)Amortization.  Upon the reduction of the outstanding principal balance of an Inventory Loan Tranche on any Monthly Payment Date, Borrower shall be entitled to release of Vacation Ownership Points comprising a portion of the Pledged Inventory in a number equal to the principal so repaid divided by the Per Point Release Fee; provided, than no Vacation Club Point may be released in part due to any fraction remaining from such calculation. 
(b)General Provisions.  Borrower shall provide Lender with all documents and information reasonably requested by Lender in connection with any Pledged Inventory proposed to be released, including without limitation, information regarding any applicable sales price of such Pledged Inventory.  Any obligation of Lender to release any Pledged Inventory from the Lien granted hereunder shall be subject to satisfaction of all of the following conditions: 
(i)Lender has not accelerated repayment of the Obligations pursuant to Section 9.2 hereof; 
(ii)All costs and expenses of such release shall be paid by Borrower, including all costs related to the preparation and recording of the Release and all costs, expenses and reasonable attorneys' fees of Lender; and
(iii)Lender shall have received the required Per Point Release Fee for the Vacation Club Points being released. 
(c)Upon satisfaction of the provisions set forth in Section 3.5(b)(i), (ii) and (iii) above, Lender shall promptly execute and deliver all applicable Releases to Borrower.
3.6    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 execute and deliver all Releases required to release all of the remaining Pledged Inventory (if any) from the Lien granted hereunder.
4.Conditions Precedent. 
4.1    Conditions Precedent to the Initial Advance.  The obligation of Lender to enter into this Agreement and to make the initial 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 reasonably 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. 
(a)Loan Documents. Borrower shall execute and deliver to Lender, or cause to be executed and delivered, as the case may be, all of the 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. 
(b)Opinion of Counsel. Lender shall have received from counsel or counsels acceptable to Lender, a closing opinion in form and substance satisfactory to Lender dated as of the Closing Date, covering such items as may be required by Lender. 

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(c)Governing Documents. Lender shall have received and approved copies of the Governing Documents of Borrower and any DRC Affiliate and any amendments thereto, all certified to be true and complete by the Secretary of State of each applicable state of formation and by an officer, manager, partner or member of each such Person. 
(d)Good Standing Certificates. Lender shall have received and approved current good standing certificates for each of Borrower and any DRC Affiliate issued by the Secretary of State of the state of formation of such entities. 
(e)Resolutions. Lender shall have received and approved all resolutions and consents of the governing Persons of Borrower and any DRC Affiliate, authorizing the execution of all Loan Documents to which each is a party and authorizing performance of all obligations thereunder. 
(f)Financing Statements.  Lender shall have received acknowledgment copies or stamped receipt copies of proper financing statements, duly filed on or before the Closing 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 Inventory Collateral described herein and/or any other Loan Document.
(g)Expenses. Borrower shall have paid all Loan Costs required to be paid prior to or at closing pursuant to this Agreement. 
(h)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. 
(i)Miscellaneous. Lender shall have received from Borrower such other documents, instruments, certificates or other items as Lender shall have reasonably requested. 
4.2    Conditions Precedent to Every Advance.  The obligation of Lender to enter into this Agreement and to make each 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.  
(a)    Requests for Inventory Loan Advances. Not less than five (5) 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 B together with any applicable attachments, schedules and supporting materials as specified in such form.  Lender shall review such request and accompanying materials, and Borrower shall cooperate with Lender in providing any additional information reasonably required by Lender to reconcile the requested Advance and the related Defaulted Receivables being purchased by Borrower on the applicable Repurchase Date.
(b)    Event of Default.  No Event of Default shall have occurred and be continuing, or would result from the closing of the transactions contemplated herein.
(c)    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 Advance 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. 
(d)    Purchase of Defaulted Receivables.  All conditions precedent required to be satisfied by Borrower or otherwise waived by Lender pursuant to the Repurchase Agreement with respect to the related Repurchase Date shall have been so satisfied or waived (including, without limitation, the receipt by Lender of the portion of the related purchase price not financed hereunder).
(e)    Date of Advance.  The date on which such requested Advance is to be made shall be a Business Day. 

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(f)    Loan Costs.  Borrower shall have paid all Loan Costs then due and payable and required to be paid by Borrower pursuant to this Agreement. 
(g)    Other.  All actions taken in connection with such requested Advance and all documents and papers relating thereto shall be satisfactory to Lender.
(h)    No Obligation to Fund After Filed Liens. Lender shall have no obligation to advance any monies or make any Advance 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.
4.3    Funding Procedures. The making of Advances shall be in accordance with such additional procedures as Lender may reasonably require.
4.4    No Waiver.  Except as otherwise expressly waived in a writing signed by Lender, 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 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 are specifically reserved by Lender.  No Advance shall constitute a waiver of any condition of Lender's obligation to make further Advances.
5.General Representations, Warranties and Covenants. As an inducement to Lender to make Advances to Borrower, Borrower hereby represents and warrants to Lender and covenants with Lender as follows:
5.1    Organization; Power; Authorization. 
(a)Each of Borrower and any DRC Affiliate that is party to a Material Agreement (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, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; 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 Agreements to which it is a party and without violation of any Governing Documents of such Person. 
(b)Borrower shall maintain, and shall cause each DRC Affiliate that is party to a Material Agreement 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 5.2(b), Borrower 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.
5.2    Provision of Information.  Upon the reasonable request of Lender, Borrower shall provide the following information to Lender (or, to the extent any such information is not within the control of Borrower or any DRC Affiliate, to use its reasonable commercial efforts to obtain and provide such information), provided, that Borrower shall not be obligated to incur unreasonable cost or expense in obtaining or providing such information:
(a)    Information relating to (i) the identity of all DRC Affiliates involved in the operation or management of the Vacation Club or related Resort Accommodations, and (ii) the ownership of all interests in Borrower. 
(b)    Books, records and files relating to the Vacation Club and each Component 

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Site and the sales of Vacation Ownership Plans.
(c)    True and correct copies (including any amendments, modifications or supplements thereto) of (a) the Vacation Club Governing Documents, and (b) to the extent any Material Party is a party, each Management Agreement.
(d)    Information enabling Lender to confirm that the number of Vacation Ownership Points appurtenant to all Resort Accommodations dedicated to the Vacation Club and legally conveyed to the Vacation Club Association, as Trustee, equals or exceeds the number of Vacation Ownership Points appurtenant to Vacation Club memberships outstanding at all times (the “One-to-One Ratio"), including details on the Resort Accommodations which make up the Vacation Club and the Vacation Ownership Plans of Members in good standing and available for use on an annual basis.
(e)    Information relating to insurance maintained or required to be maintained for each Component Site, including certificates of insurance issued by insurance companies, enabling Lender to confirm that such insurance is maintained in amounts, in form and in substance, and with expiration dates, commensurate with industry standards and consistent with past practice by DRC Affiliates in respect of timeshare resorts similar in kind and quality to the Resort Accommodations.
5.3    Names and Addresses. 
(a)    Schedule 5.3 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 physical 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. 
5.4    Licenses. 
(a)    Each of Borrower and any DRC Affiliate that is party to a Material Agreement 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 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. 
(b)    Borrower shall maintain and shall cause each DRC Affiliate that is party to a Material Agreement to maintain and keep in full force and effect all of such licenses described in subsection (a) above. 
5.5    Compliance with Legal Requirements. The execution, delivery and performance by Borrower of the Loan Documents to which it is a party do not violate any applicable Legal Requirements. 
5.6    Taxes.  Borrower shall file and shall cause each Material Party to file all tax returns required to be filed by Borrower and each such 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. 
5.7    Litigation Proceedings.  Borrower has not received and has no knowledge of any written notice from any court, governmental authority or other tribunal alleging that Borrower or any Material Party has violated any applicable Legal Requirements that could reasonably be expected to have a Material Adverse Effect.  Borrower shall provide to Lender prompt written notice of any action commenced against any Material Party to the extent Borrower reasonably believes such action could reasonably be expected to have a Material Adverse Effect. 
5.8    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 Pension 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 

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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. 
5.9    Financial Statements and Financial Condition.  Taken as a whole, all Financial Statements and other information of the financial condition of Borrower 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 as of the date on which the same have been furnished to Lender.
5.10    Solvency. Borrower is currently solvent. 
5.11    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. 
5.12    Enforceability. The Loan Documents constitute legal, valid and binding obligations of Borrower and any DRC Affiliate who is a party thereto, enforceable in accordance with their terms. 
5.13    No Defaults. 
(a)    No Default or Event of Default with respect to the Loan Documents currently exists. Borrower is not 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 Borrower or its ability to perform its obligations under the Loan Documents or Material Agreements to which it is a party. 
(b)    Borrower 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. 
5.14    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. 
5.15    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. 
5.16    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.  The parties hereto acknowledge and agree 

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that neither Borrower or Lender is, and shall not be, liable for any fees or expenses of Houlihan Lokey incurred in connection with the formulation or approval of the Section 363 Sale (Diamond), Section 363 Sale (RFA) or any other transactions as contemplated herein or in the other Loan Documents.
(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. 
5.17    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 Inventory Collateral and Borrower's books and records pertaining thereto, and Borrower's assets or property, and to audit, examine and make copies of and abstracts from such books and records.  All audits and inspections from 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.
5.18    Books and Records. Borrower shall keep accurate and complete records and books of account reflecting all financial transactions of Borrower relating to or otherwise affecting the Pledged Inventory, 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 Inventory Collateral. 
5.19    Full Disclosure.  No information or statement furnished by or on behalf of Borrower or any Material Party to Lender in connection with the Inventory Loan or the Loan Documents, and no representation or statement made by Borrower or any DRC Affiliate 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.
5.20    Change of Control. For so long as the Obligations to Lender under the Loan Documents remain outstanding, there shall be no Change of Control. 
6.Representations, Warranties and Covenants With Respect to the Inventory Collateral, the Vacation Club and Component Sites. As an inducement to Lender to make Advances to Borrower, Borrower represents and warrants to and covenants with Lender as follows: 
6.1    Vacation Club Declaration. All Inventory Collateral will continue to be duly submitted to the provisions of the Vacation Club Declaration and each Component Site Declaration. Borrower shall not vote to amend, supplement, terminate or restate the Vacation Club Declaration or any Component Site Declaration in any manner that could reasonably be expected to have a Material Adverse Effect without the prior written consent of Lender. Borrower shall not consent to any amendments, supplements or restatements of the Vacation Club Declaration or any Component Site Declaration in any manner that could reasonably be expected to have a Material Adverse Effect without the prior written consent of Lender.
6.2    Legal Requirements.  To the extent applicable to Borrower or any Material Party, such Person has and shall at all times maintain all licenses and comply with all Legal Requirements required in connection with the ownership, management and operation of each Component Site, the establishment of the timeshare regime at each Component Site pursuant to the Vacation Club Declaration, the applicable Component Site Declaration and the other Material Agreements, and the sale, advertising, marketing and offering for sale of Vacation Ownership Plans.
6.3    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 and the Permitted Exceptions.  The execution and delivery of the Loan Documents and 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, shall create in favor of Lender, a valid, perfected and continuing first priority Lien in the Inventory Collateral. 

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(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.
6.4    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, (ii) prohibits or restricts entering into or performing its obligations under the Loan Documents to which it is a party, (iii) as to Borrower, restricts or in any way limits Borrower's rights to incur indebtedness under the Loan Documents, 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. 
6.5    Inventory Collateral. 
(a)    At the time the related Advance is deemed made, Borrower will, to its knowledge, have good and marketable title to all of the Inventory Collateral subject only to Permitted Exceptions described on Schedule 6.5. 
(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.  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. 
6.6    Taxes.  Borrower shall pay all applicable Taxes related to the Inventory Collateral. 
6.7    Management Agreements. For so long as Borrower or any DRC Affiliate is party to a Management Agreement, Borrower shall cause the Vacation Club to be managed at all times by a Person which has substantial experience, background and demonstrated ability to perform.
6.8    Cessation of Business. Borrower shall provide prompt notice to Lender of any cessation of (a) marketing or sales of the Pledged Inventory to DRC Affiliates (as opposed to consumers) or (b) a material part of Borrower's business. 
6.9    Pricing. Borrower shall not, without Lender's prior written consent which shall not be unreasonably withheld, adjust the retail pricing schedule for Vacation Ownership Points such that the price adjustment would have a Material Adverse Effect.
6.10    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, if such transaction could reasonably be expected to have a Material Adverse Effect. 
7.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: 
7.1    Annual Financial Statements. As soon as available and in any event within one hundred fifty (150) days after the end of each fiscal year of Borrower, Borrower shall provide Lender with consolidated audited Financial Statements.  As soon as available and in any event within one hundred fifty (150) days after the end of each fiscal year of the Vacation Club Association and each Component Site Association, Borrower shall provide Lender (to the extent Borrower or any Material Party receives such Financial Statements) with the annual Financial Statement of the Vacation Club Association and each Component Site Association (together with any certifications delivered by an authorized officer of the Vacation Club Association and applicable Component Site Association). 
7.2    Quarterly Financial Statements. As soon as available and in any event within 

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seventy-five (75) days after the end of each fiscal quarter of Borrower (with the exception of the last quarter of each fiscal year) unaudited consolidated balance sheets and income statements for Borrower, 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 Borrower shall be certified by the chief financial officer of Borrower to be true, correct and complete in all material respects, and shall otherwise be in form reasonably acceptable to Lender. 
7.3    Monthly Borrowing Base Shortfall.  No later than the fifth (5th) Business Day of each month, Borrower shall cause the Servicer to deliver to Lender a preliminary calculation of the Borrowing Base Shortfall (if any) for the following Monthly Payment Date, together with all supporting information and calculations (including, without limitation, sufficient information and records necessary or otherwise requested by Lender in order for Lender to confirm Borrower's calculation of the then-current retail selling price of vacation ownership points in the Diamond Resorts U.S. Collection (“Diamond Points”) and the corresponding imputed value of the Vacation Ownership Points included in the Pledged Inventory by reference and comparison to the value of such Diamond Points).  Lender shall review such preliminary calculations and shall promptly notify Borrower of any errors or irregularities identified by Lender.  Borrower and Lender shall cooperate in good faith to agree on a final Borrowing Base Shortfall no later than the fifteenth (15th) Business Day of each month; provided, that Borrower shall consent (such consent not to be unreasonably withheld) to any revisions, recalculations or other changes to the Borrowing Base Shortfall requested by Lender.
7.4    Budgets and Assessments. Borrower shall use its best efforts to provide Lender with proposed annual maintenance and operating budgets of the Vacation Club Association and each Component Site Association, proposed annual maintenance and operating budget of the Vacation Club Association and each Component Site Association and a statement of annual Assessments to be levied upon the Owners of Vacation Ownership Plans, provided that the same is reasonably available to Borrower.  If and as long as Borrower's Affiliate is the Vacation Club 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 Vacation Ownership Plans, the amount (if any)  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. 
7.5    Audit Reports. Promptly upon receipt by Borrower or any other DRC Affiliate 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 Vacation Club, the Vacation Club Association, any Component Site Association or any Component Site. 
7.6    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. 
7.7    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. 
7.8    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, the Inventory Collateral, the Vacation Club, any Component Site 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 

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such anticipated effect. 
7.9    Association Assessments.  Assuming that the Vacation Club Association has been fully funded per its budget and the budget has been properly prepared (and include the recovery of corporate overhead incurred for the operation of the Vacation Club Association), Borrower agrees that any annual maintenance fee increase shall be limited to an inflationary increase for a period of five (5) years from the date hereof (provided, that such limitation shall be exclusive of any amount which the Vacation Club Association may approve for special assessments or capital improvement projects beyond an inflation increase from current amounts).
7.10    Other Information. Borrower shall promptly deliver to Lender any other information in Borrower's possession or reasonably available to Borrower related to the Inventory Collateral, the Vacation Club, each Component Site, Borrower, any Component Site Association or the Vacation Club Association as Lender may in good faith request. 
8.Events of Default. 
An “Event of Default” shall exist if any of the following shall occur: 
8.1    Payments. Borrower (a) shall fail to make when due, any payment or mandatory prepayment of principal or interest, or (b) shall fail to pay or reimburse Lender, within three (3) Business Days of demand, for any Loan Costs or any other payment Obligations.
8.2    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 8), 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 or any DRC Affiliate that is party to a Loan Document 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 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. 
8.3    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 the Loan Documents, is or proves to be false, misleading or incorrect in any material respect as of the date made or reaffirmed. 
8.4    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. 
8.5    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. 
8.6    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. 

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8.7    Attachment; Judgment; Tax Liens. (a) The issuance, filing, levy or seizure against the Inventory Collateral, of one or more attachments, injunctions, executions, tax Liens (excluding with respect to Taxes for which Borrower is not responsible under the Reimbursement Agreement) or judgments for the payment of money cumulatively in excess of $250,000 in the aggregate, or (b) the filing of any mechanics' or materialmen's Lien against 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 and such Lien could reasonably be expected to have a Material Adverse Effect.
8.8    Documents. Any of the Material Agreements to which any Material Party is a party shall be terminated, amended or modified or restated in any material respect, without Lender's prior written consent, if such action could reasonably be expected to have a Material Adverse Effect on the Inventory Collateral. 
8.9    Material Adverse Effect. The occurrence of a Material Adverse Effect. 
8.10    [Reserved].
8.11    Breach of Other Agreements. Any violation or breach of any agreement, covenant or restriction affecting title to the Inventory Collateral, which violation or breach could reasonably be expected to have a Material Adverse Effect. 
8.12    Fraud. Borrower or any Material Party takes or is in the process of taking any action which Lender in good faith believes is intended to: (a) defraud Lender, or (b) convert any portion of the Inventory Collateral. 
8.13    Change of Control . If any Change of Control shall have occurred. 
8.14    Cessation of Sales or Business. Any cessation without Lender's prior written consent of a material part of Borrower's business shall occur and if such business shall not be resumed within thirty (30) days after such cessation, unless the cessation is due to a force majeure event. 
9.Termination of Obligation to Advance/Remedies. 
9.1    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 Loan Document, 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 pursuant to the Loan Documents.
9.2    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 9, all without notice to Borrower: 
(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 Section 8.5 or 8.6, 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 make Advances 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 

27

foreclosure of the Lien thereof.
(d)Sale of Inventory Collateral. After notification, if any, provided for in Section 9.3, 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 9.3, 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. 
(e)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. 
(f)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 take possession of the Inventory Collateral, collect the proceeds 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 take possession of the Inventory Collateral, to manage and operate the same and to collect the proceeds 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 proceeds 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. 
(g)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. 
(h)Power of Attorney. Exercise Lender's rights under powers of attorney granted to it including the power of attorney referenced in Section 10.9. 
9.3    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 

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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 9.3. Lender shall 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 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 be credited with the full sale price, to the extent that payments thereof are 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.
9.4    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 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. 
9.5    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. 
9.6    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. 
9.7    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)    Upon foreclosure, transfer all or any part of the Inventory Collateral into the name of Lender or its nominee; and
(b)    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. 
9.8    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)    Except as otherwise expressly provided in an instrument or instruments executed by Lender, 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 

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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; or (vii) 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, 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 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. 
(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 Borrower or any DRC Affiliate that is party to a Loan Document, 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. 
9.9    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 

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whether or not Lender shall have instituted any suit for collection or other action in connection with the Loan Documents. 
9.10    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. 
9.11    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. 
9.12    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 any Component Site 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 any Component Site; (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 Vacation Ownership Plans; (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 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 (excluding any Taxes that are subject to reimbursement obligations of Lender under the Reimbursement Agreement), and any and all fees or charges to be paid by Borrower including, without limitation under any Legal Requirements, 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 indemnity provisions in this Section 9.12 shall survive the satisfaction of the Obligations and termination of this Agreement, and remain binding and enforceable against Borrower, together with its successors and assigns, in perpetuity.
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 gross negligence or willful misconduct of Lender.
10.    Certain Rights of Lender 
10.1    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 

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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. 
10.2    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. 
10.3    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, 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. 
10.4    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 any Legal Requirements, or under any of the Material 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 any Component Site 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 any Legal Requirements or under any of the Material 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. 
10.5    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 or the Liens granted under this Agreement, including without limitation 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. 
10.6    Indemnities, Loan Costs and Expenses. All Loan Costs 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 promptly upon demand. 
10.7    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. 
10.8    Assignment of Lender's Interest. 
(a)    Subject to the provisions of Section 11.18, Lender shall have the right to 

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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. 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; provided, that Lender shall promptly provide Borrower with written notice of any such assignment or transfer. 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.
(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 hereunder, 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. 
10.9    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 reasonable discretion, for the purpose of carrying out the terms of this 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 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; 
(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 

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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 Agreement, all as fully and effectively as the Borrower might do; 
(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; and
(v)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 any sales pursuant to Article 9 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. 
11.    Miscellaneous. 
11.1    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 11.1.
If to Borrower: 
DPM Acquisition, LLC
10615 Park Run Drive
Las Vegas, Nevada 89144 
Attn: Treasurer and General Counsel
Telephone: (702) 823-7350
Telecopy: (702) 804-8632

With a Copy to:
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, Illinois 60661
Attention: Ann Marie Sink

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Facsimile: 312-902-1061

If to Lender:
RFA PMR LoanCo, LLC
c/o 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

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. 
11.2    Survival; Continuation and Reliance. All representations, warranties, covenants and agreements made by Borrower herein, in any other Loan Documents or in any other agreement, document, instrument or certificate delivered by or on behalf of Borrower 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. 
All indemnities made by Borrower are in favor of Lender shall survive payment of all Obligations and termination of this Agreement until the expiration of the applicable statute of limitations. 
11.3    Governing Law; Consent to Jurisdiction. 
(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.

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(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.
11.4    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. 
11.5    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 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. 

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11.6    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 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. 
11.7    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, 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. 
11.8    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. 
11.9    Consents, Approvals and Discretion. Whenever Lender's consent or approval is required or permitted hereunder, or any documents or other items are required to be acceptable to Lender, such consent, approval or determination of acceptability shall be made in the sole and absolute discretion of Lender, unless otherwise specifically set forth herein. 
11.10    Litigation. TO THE FULLEST EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND 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 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 ACKNOWLEDGES 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 11.10 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. 

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11.11    Consent to Advertising and Publicity of Documents. Borrower and Lender shall confer and reasonably agree prior to any public announcement describing the credit accommodation entered into pursuant to this Agreement. 
11.12    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 and the dissemination of press releases in connection with such required disclosures. 
11.13    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 a DRC Affiliate, or such Material Party is directly or indirectly under the control of Borrower. 
11.14    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. 
11.15    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 or documentation directly related to such sale. Borrower shall be required to transact business solely with Lender and shall not be required to deal with participants directly. 
11.16    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 11.16 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 11.16. 
11.17    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. 
11.18    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 or of DRC or DRC Affiliates who have been involved with or undertaken due diligence in connection with the Bankruptcy Case. 
11.19    Gender. Words of any gender in this Agreement shall include each other gender where appropriate. 
11.20    Time of the Essence. Time is of the essence of all obligations and agreements of Borrower. 
11.21    Conflict. The provisions of this Agreement shall control in the event of any conflict among it, and any other Loan Document. 

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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to be duly executed and delivered effective as of the date first above written. 
LENDER:
RFA PMR LOANCO, LLC,
 a Delaware limited liability company
By:    /s/ Chris Halpin
Name:    Chris Halpin
 Title:    Vice President

BORROWER:
DPM ACQUISITION, LLC,
a Delaware limited liability company
		
	By:
	/s/ David F. Palmer

		
	Name:
	David F. Palmer

		
	Title:
	President 

Signature Page to Inventory Loan and Security Agreement

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Schedules
		
	Schedule 5.3
	Names and Addresses 

		
	Schedule 6.5
	Permitted Exceptions to Title 

Exhibits 
		
	Exhibit A
	Form of Request for Inventory Loan Advance 

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Schedule 5.3 
Names and Addresses 
	
		
	Address of Borrower:
	DPM Acquisition, LLC
10615 Park Run Drive
Las Vegas, Nevada 89144 

	 Address of Inventory Collateral:
	DPM Acquisition, LLC
10615 Park Run Drive
Las Vegas, Nevada 89144

	 Address of Books and Records:
	DPM Acquisition, LLC
10615 Park Run Drive
Las Vegas, Nevada 89144

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Schedule 6.5
Permitted Exceptions to Title 
None.

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EXHIBIT A 
Form of Request for Inventory Loan Advance 
BORROWER'S CERTIFICATE
AND REQUEST FOR ADVANCE ON INVENTORY LOAN 
_____________, 201_ 
RFA PMR LoanCo, LLC
c/o Resort Finance America, LLC
100 Crescent Court, Suite 260
Dallas, Texas  75201 
		
	RE:
	Inventory Loan any Security Agreement between RFA PMR LoanCo, LLC (“Lender”) and DPM Acquisition, LLC (“Borrower”), dated as of May 21, 2012 (as amended, supplemented or restated from time to time, the “Loan Agreement”) 

Ladies and Gentlemen: 
In accordance with the terms of the 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 Event of Default has occurred under the Loan Agreement and no 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, 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. 
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 10615 Park Run Drive, Las Vegas, Nevada 89144. 
Borrower is purchasing the Inventory Collateral free and clear of all known 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. 
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 Borrower is solvent. 
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, 

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and with respect to all Advances, to the making of such Advance. 
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 certified, both on behalf of the Borrower and by the undersigned, individually, as being true, correct and complete. 
[Signature page follows] 
 

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BORROWER:
DPM ACQUISITION, LLC,
a Delaware limited liability company

By:            
Name:
Title: 

46

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