Document:

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                         INVESTMENT MANAGEMENT AGREEMENT

         This Investment Management Agreement (the "AGREEMENT") dated this 1st
day of July, 2003 by and among PMC Commercial Trust, a Texas real estate
investment trust (the "COMPANY"), PMC Asset Management, Inc., a Texas
corporation ("PMC ASSET" or the "INVESTMENT MANAGER"), a wholly-owned subsidiary
of PMC Advisers, Ltd. ("PMC ADVISERS"), and PMC Capital, Inc. ("PMC CAPITAL").

1.       CERTAIN DEFINITIONS

         As used in this Agreement, the following terms have the meanings set
forth below:

         "Affiliate" shall mean a Person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, the first mentioned Person.

         "Average Annual Value of All Invested Assets" shall mean the book value
of the Invested Assets determined in accordance with GAAP on the first day of
the year and on the last day of each quarter of such year divided by five.

         "Average Annual Value of All Invested Assets at Date of Termination"
shall mean the book value of the Invested Assets at Date of Termination
determined in accordance with GAAP on the first day of the year and on the last
day of each quarter of such year divided by five.

         "Average Common Equity Capital" shall mean the Common Equity Capital on
the first day of the year and on the last day of each quarter of such year,
divided by five.

         "Average Quarterly Value of All Assets" shall mean the book value of
total assets of the Company or any Person wholly-owned (directly or indirectly)
by the Company determined in accordance with GAAP on the first day of the
quarter and on the last day of the quarter, divided by two.

         "Average Quarterly Value of All Invested Assets" shall mean the book
value of Invested Assets determined in accordance with GAAP on the first day of
the quarter and on the last day of the quarter, divided by two.

         "Code" shall mean the Internal Revenue Code of 1986, as amended.

         "Common Equity Capital" shall mean the sum of the stated capital plus
the additional paid-in capital for the Common Shares.

         "Common Shares" shall mean the Company's common shares of beneficial
interest, par value $.01 per share.

         "GAAP" shall mean generally accepted accounting principles.

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         "Independent Trust Managers" shall mean the trust managers of the
Company who are not affiliated with PMC Capital or its subsidiaries.

         "Invested Assets" shall have the meaning set forth in Section 2 of this
Agreement.

         "Invested Assets at Date of Termination" shall mean Primary Investments
and Other Investments and any Primary Investments or Other Investments that
arise from loan commitments, letters of intent or other agreements, in any case,
as in existence on the Termination Date, as set forth on a schedule to be
prepared by the Company and delivered to PMC Capital not later than 45 days from
such date of termination, which schedule shall be annually updated by the
Company and delivered to PMC Capital not later than 90 days following the end of
each of the Company's fiscal years during which the Non-Compete Agreement (as
defined in Section 10 of this Agreement) is in effect.

         "Other Investments" shall have the meaning set forth in Section 2 of
this Agreement.

         "Person" shall mean an individual, corporation, partnership,
association, trust or any unincorporated organization or other entity.

         "Primary Investments" shall have the meaning set forth in Section 2 of
this Agreement.

         "Return on Average Common Equity Capital" means the net income of the
Company determined in accordance with GAAP, less preferred dividends, if any,
divided by the Average Common Equity Capital.

         "Termination Date" shall mean the date on which this Agreement no
longer has any force and effect, whether as a result of being terminated in
accordance with the provisions of Section 10 hereof (following the expiration of
the 60-day notice period provided for therein) or as a result of non-renewal (at
the expiration of the term hereof) for whatever reason.

2.       PURPOSE OF THE COMPANY

         The Company intends primarily to originate business loans (a) to small
business enterprises that exceed the net worth, asset, income, number of
employees or other limitations applicable to the Small Business Administration
("SBA") programs utilized by PMC Capital, (b) in excess of $1,333,000 to small
business enterprises without regard to SBA eligibility requirements, (c) for
which PMC Capital does not have available funds to make such loans or (d) that
cannot be originated by PMC Capital or its subsidiaries as a result of industry
concentration limitations. All such loans (collectively, the "Primary
Investments") will be secured by first liens on real estate and subject to the
Company's underwriting criteria. In addition, the Company may (i) purchase from
the Resolution Trust Company, the Federal Deposit Insurance Corporation and
other sellers loans on which payments are current at the time of the Company's
commitment to purchase and which meet the

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Company's underwriting criteria, (ii) invest in other commercial loans secured
by real estate and (iii) invest in real estate (collectively, the "OTHER
INVESTMENTS").

         Concurrently with the execution of this Agreement, the Company, PMC
Asset, and PMC Capital shall enter into a Loan Origination Agreement in the form
of Exhibit A hereto (the "LOAN ORIGINATION AGREEMENT") pursuant to which PMC
Asset shall determine the allocation of the loan origination opportunities to
either the Company or PMC Capital.

         The Company's primary investment objective is to obtain current income
from interest payments and other related fee income from Primary Investments
originated by it and Other Investments acquired by it and, in each case, owned
by the Company or by any Person wholly-owned (directly or indirectly) by the
Company (collectively, the "INVESTED ASSETS") for distribution to its
shareholders. The Company will invest in Invested Assets selected by the
Investment Manager in accordance with underwriting criteria established by the
trust managers with the intention of creating a portfolio of investments
intended to preserve the capital base of the Company and generate income for
distribution to the Company's shareholders. The Company's investments are
anticipated to be held primarily to maturity.

3.       THE INVESTMENT MANAGER

         PMC Asset shall act as the investment adviser to the Company and is
registered with the applicable governmental authorities of the State of Texas.
The Company hereto engages the services of PMC Asset as the Company's Investment
Manager.

4.       OBLIGATIONS OF THE INVESTMENT MANAGER

         As the Investment Manager, PMC Asset will:

                  (a) advise the Company as to the acquisition and disposition
         of Invested Assets and temporary investments (collectively,
         "INVESTMENTS") in accordance with the Company's underwriting criteria
         and investment policies;

                  (b) provide the Company with office space and services to the
         extent required by the Company's trust managers, officers and
         employees;

                  (c) maintain the Company's books of account and other records
         and files;

                  (d) report to the Company's trust managers, or to any
         committee or officer of the Company acting pursuant to the authority of
         the trust managers, at such times and in such detail as the trust
         managers deem appropriate in order to enable the Company to determine
         that its investment policies are being observed and implemented;

                  (e) undertake its obligations pursuant hereto and any other
         activities undertaken by PMC Asset on the Company's behalf subject to
         any directives of the Company's trust

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         managers or any duly constituted committee or officer of the Company
         acting pursuant to authority of the Company's trust managers;

                  (f) subject to the Company's investment policies and any
         specific directives from the Company's trust managers, to effect
         acquisitions and dispositions for the Company's account in the
         Investment Manager's discretion and to arrange for the documents
         representing acquired Investments to be delivered to the Company's
         custodian;

                  (g) on a continuing basis, monitor, manage and service the
         Company's Investments; and

                  (h) arrange debt and equity financing for the Company, subject
         to policies adopted by the Company's trust managers.

5.       EXPENSES TO BE PAID BY THE INVESTMENT MANAGER

         The Investment Manager will pay for its own account all expenses
incurred by it in rendering the services hereunder without regard to the
compensation received by the Investment Manager from the Company hereunder.
Without limiting the generality of the foregoing, the Investment Manager shall
bear the following expenses incurred in connection with the performance of its
duties under this Agreement:

                  (a) employment expenses of the personnel employed by the
         Investment Manager (other than fees paid and reimbursement of expenses
         made to independent managers, independent contractors, mortgage
         services, consultants, managers, local property managers or agents
         employed by or on behalf of the Company including such persons or
         entities which may be Affiliates of the Investment Manager when acting
         in any such capacity, all of which shall be the responsibility of the
         Company), including but not limited to, salaries, wages, payroll taxes
         and the costs of employee benefit plans;

                  (b) rent, telephone, utilities, office furniture, equipment
         and machinery (including computers, to the extent utilized) and other
         office expenses of the Investment Manager, except to the extent such
         expenses relate solely to an office maintained by the Company separate
         from the office of the Investment Manager; and

                  (c) miscellaneous administrative expenses incurred in
         supervising, monitoring and inspecting real property and such other
         investments of the Company or relating to the performance by the
         Investment Manager of its obligations hereunder.

         Notwithstanding the foregoing, any share options granted by the Company
to directors, officers and key employees of the Investment Manager shall not be
an expense to be borne by the Investment Manager pursuant to this Section 5.

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6.       EXPENSES TO BE PAID BY THE COMPANY

         Except as expressly otherwise provided in this Agreement, the Company
will pay any expenses incurred by the Company and will reimburse the Investment
Manager promptly, against the Investment Manager's voucher, for any such
expenses paid by the Investment Manager for the Company's account. Without
limiting the generality of the foregoing, such expenses shall include:

                  (a) all expenses of the Company's organization and of any
         offering and sale by the Company of its shares;

                  (b) expenses of the Company operations, except as otherwise
         provided in Section 5 above;

                  (c) financing costs and debt service with respect to
         indebtedness of the Company;

                  (d) taxes on income and taxes and assessments on real
         property, if any, and all other taxes applicable to the Company;

                  (e) legal, auditing, accounting, underwriting, brokerage,
         listing, reporting, registration and other fees, and printing,
         engraving and other expenses and taxes incurred in connection with the
         issuance, distribution, transfer, trading, registration and stock
         exchange listing of the Company's securities, whether such expenses are
         directly incurred by the Company or are allocated to the Company by the
         Investment Manager either pursuant to this Agreement or as otherwise
         agreed to by the Board of Trust Managers of the Company from time to
         time;

                  (f) expenses of organizing, revising, amending, converting,
         modifying or terminating the Company;

                  (g) fees and expenses paid to trust managers and officers who
         are not employees or Affiliates of the Investment Manager, independent
         advisors, independent contractors, mortgage services, consultants,
         managers, local property managers or management firms, accountants,
         attorneys and other agents employed by or on behalf of the Company and
         out-of-pocket expenses of trust managers of the Company;

                  (h) expenses directly connected with the acquisition,
         disposition and ownership of Invested Assets, including real estate
         interests or other property (including the costs of foreclosure,
         insurance premiums, legal services, brokerage and sales commissions,
         maintenance, repair, improvement and local management of property),
         other than expenses with respect thereto of employees of the Investment
         Manager to the extent that such expenses are to be borne by the
         Investment Manager pursuant to Section 5 above, and any expenses
         allocated to the Company by the Investment Manager as agreed to by the
         Board of Trust Managers of the Company from time to time;

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                  (i) all insurance costs incurred in connection with the
         Company (including officer and trust manager liability insurance, if
         any);

                  (j) expenses connected with payments of dividends or interest
         or contributions in cash or any other form made or caused to be made by
         the trust managers to holders of securities of the Company;

                  (k) all expenses connected with communications to holders of
         securities of the Company and other bookkeeping and clerical work
         necessary to maintaining relations with holders of securities,
         including the cost of printing and mailing certificates for securities
         and proxy solicitation materials and reports to holders of the Company
         securities;

                  (l) transfer agent's, registrar's and indenture trustee's fees
         and charges;

                  (m) legal, accounting and auditing fees and expenses; and

                  (n) expenses relating to any office or office facilities
         maintained by the Company separate from the office of the Investment
         Manager.

If the Company uses the services of attorneys or paraprofessionals on the staff
of the Investment Manager in lieu of outside counsel for purposes other than the
performance of the services to be performed by the Investment Manager hereunder,
the Company will reimburse the Investment Manager for such services at hourly
rates calculated to cover the cost of such services, as well as for incidental
disbursements.

7.       RECEIPT OF FEES

         All fees that may be paid to the Investment Manager by any person in
connection with any investment transaction in which the Company participates or
proposes to participate shall be paid over or credited to the Company at the
time such investment transaction is consummated. The Investment Manager may, on
the other hand, retain for its own account any fees paid to it by any such
person for any services rendered to such person which is not related to any such
investment transaction. For this purpose, any fees paid for services rendered by
attorneys on the staff of the Investment Manager in connection with any such
investment transaction shall be treated as transaction costs and shall not be
deemed to be fees paid to the Investment Manager in connection with any
investment transaction. The Investment Manager will report to the Company's
trust managers not less often than quarterly all fees received by the Investment
Manager from any source whatever and whether, in its opinion, any such fee is
one that the Investment Manager is entitled to retain under the provisions of
this Section 7. In the event that any trust manager should disagree, the matter
shall be conclusively resolved by a majority of the trust managers of the
Company, including a majority of the Independent Trust Managers.

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8.       COMPENSATION OF THE INVESTMENT MANAGER

         As the Investment Manager's sole and exclusive compensation for its
services to be rendered pursuant to the terms set out above, the Company will,
during the term of this Agreement, pay to the Investment Manager the following
fees, beginning as of the date of this Agreement:

         I.                Quarterly in arrears, a fee ("BASE FEE") consisting
                  of a quarterly servicing and advisory fee equal to the sum of
                  (a) the product of 0.3875% (1.55% on an annual basis)
                  multiplied by the lesser of (i) the Average Quarterly Value of
                  Common Equity Capital or (ii) the Average Quarterly Value of
                  All Invested Assets and (b) the product of 0.10% (0.40% on an
                  annual basis) and the difference between the Average Quarterly
                  Value of All Invested Assets and the Average Quarterly Value
                  of Common Equity Capital. Notwithstanding the foregoing or any
                  other provision contained herein, the Base Fee payable to the
                  Investment Manager hereunder shall be reduced for each quarter
                  during the term of this Agreement by an amount equal to the
                  amount of servicing or supervisory servicing fees, if any,
                  required to be paid for such quarter by the Company to any
                  third party which is unaffiliated with the Company or the
                  Investment Manager for the servicing of any Invested Assets.
                  For purposes of calculating the Base Fee, the Average
                  Quarterly Value of Common Equity Capital shall not be
                  increased by the proceeds received from any public offering of
                  Common Shares by the Company (other than pursuant to the
                  Company's dividend reinvestment plan or any employee/trust
                  manager benefit plan) during the 180 calendar day period
                  immediately following such public offering.

         II.               Quarterly in arrears, a consulting fee equal to the
                  sum of (a) the product of 50% multiplied by the amount of fees
                  contractually due to any third party assisting in the
                  placement of any of the Company's debt securities or preferred
                  shares of beneficial interest and (b) the product of 12.5%
                  multiplied by the amount of any fees contractually due any
                  third party assisting in the placement or underwriting of any
                  private or public offering of Common Shares (the "OFFERING
                  FEE"). If the Offering Fee is less than 5.5%, the consulting
                  fee shall be increased by an amount equal to the product of
                  (i) 50% of the difference between 5.5% and the actual Offering
                  Fee multiplied by (ii) the gross proceeds of the offering.

         III.              Quarterly in arrears, an origination fee (the
                  "ORIGINATION FEE") equal to the product of 0.005 (2%)
                  multiplied by the first $20 million in loans funded during a
                  one year period. Thereafter, the origination fee shall be
                  equal to the product of 0.0025 (3%) multiplied by the dollar
                  amount of loans funded for the remainder of that one year
                  period.

         IV.               A fee in the amount of ten thousand dollars ($10,000)
                  due and payable upon the sale of any Amerihost property.

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9.       INDEMNIFICATION OF THE INVESTMENT MANAGER

         The Company confirms that in performing services hereunder the
Investment Manager (including its directors, officers and employees) will be an
agent of the Company for the purpose of the indemnification provisions of the
Company's Declaration of Trust, as amended, and Bylaws, subject, however, to the
same limitations as though the Investment Manager were a director or officer of
the Company. The Investment Manager shall not be liable to the Company, its
shareholders or its creditors except for violations of law or for conduct which
would preclude the Investment Manager from being indemnified under such
provisions.

10.      TERM OF THE AGREEMENT; TERMINATION

         The term of this Agreement shall commence as of the first day of July
2002 and shall remain in effect and is renewable annually thereafter by the
Company, if (a) a majority of the Independent Trust Managers determines that (i)
the Investment Manager's performance has been satisfactory and (ii) the terms of
this Agreement are appropriate with respect to the Company's performance and
then existing economic conditions and (b) a majority of the independent
directors of the Investment Manager approve the renewal of this Agreement.

         Notwithstanding any other provision of this Agreement to the contrary,
this Agreement, or any extension thereof, may be terminated by either party
thereto upon at least sixty (60) days' notice to the other party specifying the
effective date of such termination, pursuant to a majority vote of the
Independent Trust Managers or upon the vote of the holders of more than
two-thirds of the outstanding shares of the Company, or, in the case of a
termination by the Investment Manager, by a majority vote of the independent
directors of the Investment Manager.

         In the event this Agreement is terminated or not renewed by (i) the
Company, other than as a result of a material breach of the terms of this
Agreement by the Investment Manager, or (ii) the Investment Manager as a result
of a material breach of the terms of this Agreement by the Company, PMC Capital
shall enter into a non-compete agreement, substantially in the form attached
hereto as Exhibit B, which shall have a term of seven (7) years following the
Termination Date (the "NON-COMPETE AGREEMENT"). The payment to be made by the
Company to PMC Capital as consideration for the Non-Compete Agreement entered
into as a result of in the occurrence of any event set forth in clause (i) or
(ii) in the preceding sentence shall be an amount equal to the product of the
Non-Compete Percentage (as hereinafter defined) multiplied by the Average Annual
Value of All Invested Assets at Date of Termination, calculated and payable on
an annual basis and prorated on the basis of a 360-day year for any portion of a
calendar year during which the Non-Compete Agreement is in effect. In the event
this Agreement is terminated or not renewed by (x) the Company as a result of a
material breach of the terms of this Agreement by the Investment Manager or (y)
the Investment Manager, other than as a result of a material breach of the terms
of this Agreement by the Company, PMC Capital shall enter into the Non-Compete
Agreement either on the terms and conditions provided herein and in Exhibit B
hereto or, at the Company's option, such other terms as may be mutually
agreeable to PMC Capital and the Company. The "Non-Compete Percentage" shall be
equal to 1% less the amount of the percentage, determined by dividing the dollar

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amount of loan losses on the Invested Assets at Date of Termination in any year
(or portion thereof) during which the Non-Compete Agreement is in effect (as
determined based on the audited financial statements of the Company for that
year), by the Average Annual Value of All Invested Assets at Date of Termination
for such year, in excess of 1%. In no event will the annual fee payable pursuant
to the Non-Compete Agreement be reduced below zero. Notwithstanding anything
contained in this Section 10 to the contrary, in the event that, following the
Termination Date, the Company has foreclosed on an outstanding loan and has
liquidated the collateral relating thereto and otherwise exhausted all remedies
available to it to collect any remaining deficiency on such obligation, the
Company shall, upon written request of the Investment Manager, transfer to the
Investment Manager all files related to such loan. If the Investment Manager is
successful in collecting any additional amount of the deficiency it may retain
1% of such additional amount and shall return the remainder to the Company.

11.      ASSIGNMENT, AMENDMENTS AND WAIVERS

         The Company may terminate this Agreement at any time in the event of
its assignment by the Investment Manager except an assignment to a corporation,
association, trust or other successor organization which may take over the
property and carry on the affairs of the Investment Manager, provided that
following such assignment the Persons who controlled the operations of the
Investment Manager on the date such Investment Manager became an advisor to the
Company shall control the operation of the successor organization, including the
performance of its duties under this Agreement, and they shall be bound by the
same restrictions by which they were bound prior to such assignment; however, if
at any time subsequent to such an assignment such Persons shall cease to control
the operations of the successor organization, the Company may thereupon
terminate this Agreement. Such an assignment or any other assignment of this
Agreement by the Investment Manager shall bind the assignee hereunder in the
same manner as the Investment Manager is bound hereunder. This Agreement shall
not be assignable by the Company without the prior written consent of the
Investment Manager, except in the case of any assignment by the Company to a
Person which is the successor to the Company, in which case such successor shall
be bound hereby and by the terms of said assignment in the same manner and to
the same extent as the Company is bound hereby. Any successor organization that
is a permitted assignee under this Section 11, whether a successor to the
Investment Manager or to the Company, shall be obligated to execute such
agreements, certificates or other documents as the nonassigning party shall
reasonably request to evidence that such successor organization is bound hereby.

         This Agreement may not be amended, supplemented or discharged, and none
of its provisions may be modified, except expressly by an instrument in writing
signed by the party to be charged, provided that, in the case of the Company,
such amendment, supplement, discharge or modification must be approved by a
majority vote of the Independent Trust Managers or by a vote of the holders of
more than two-thirds of the outstanding shares of the Company and, in the case
of the Investment Manager, such amendment, supplement, discharge or modification
must be approved by a majority vote of the independent directors of the
Investment Manager. Any term or provision of this Agreement may be waived, but
only in writing by the party which is entitled to the benefit of that provision.
No waiver by any party of any default with respect to any provision, condition
or requirement hereof shall be deemed to be a continuing waiver in the future
thereof or a waiver of any other provision, condition or

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requirement hereof; nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right accruing to
it thereafter.

12.      OTHER ACTIVITIES OF INVESTMENT MANAGER

         Nothing herein shall prevent the Investment Manager or its Affiliates
from engaging in other activities or businesses or from acting as advisor to any
other Person (including other real estate investment trusts) or from managing
other investments including those of investors or investments advised, sponsored
or organized by the Investment Manager even though such Person has investment
policies and objectives similar to those of the Company; provided, however, that
the Investment Manager shall notify the Company in writing in the event that it
does so act (or intends to so act) as an advisor to another real estate
investment trust. The Investment Manager may also render such services to joint
ventures and partnerships in which the Company is a co-venturer or partner and
to the other entities in such joint ventures and partnerships. Except with
respect to loan origination opportunities allocated pursuant to the Loan
Origination Agreement, the Investment Manager shall be free from any obligation
to present to the Company any particular investment opportunity which comes to
the Investment Manager. In addition, nothing herein shall prevent any
shareholder or Affiliate of the Investment Manager from engaging in any other
business or from rendering services of any kind to any other corporation,
partnership or other entity (including competitive business activities).

         Directors, officers, employees and agents of the Investment Manager or
of its Affiliates may serve as trust managers, officers, employees, agents,
nominees or signatories of the Company. When executing documents or otherwise
acting in such capacities for the Company, such persons shall use their
respective titles in the Company. Such persons shall receive from the Company no
compensation for their services to the Company in such capacities.

13.      BANK ACCOUNTS

         The Investment Manager shall establish and maintain one or more bank
accounts in its own name or, at the direction of the trust managers, in the name
of the Company, and shall collect and deposit into such account or accounts and
disburse therefrom any monies on behalf of the Company, provided that no funds
in any such account shall be commingled with any funds of the Investment Manager
or any other Person. The Investment Manager shall from time to time render an
appropriate accounting of such collections and payments to the trust managers
and to the auditors of the Company.

14.      PROTECTION OF INVESTMENTS

         The Investment Manager shall use its efforts, in cooperation with the
legal counsel to the Company, as deemed appropriate in the Investment Manager's
reasonable discretion, (a) to verify title to or procure title insurance in
respect of any property in which the Company makes or proposes

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to make any investment; (b) to verify that any mortgage securing any Investment
of the Company shall be a valid lien upon the mortgaged property according to
its terms; that any insurance or guaranty issued by the Federal Housing
Authority, the Veterans Administration or any similar agency of the United
States or Canada, or any subdivision thereof, or any private mortgage insurance
company, upon which the trust managers rely, is valid and in full force and
effect and enforceable according to its terms; and that any commitments to
provide permanent financing on property with respect to which the Company is
furnishing interim loans are satisfactory; and (c) to carry on the policies from
time to time specified by the trust managers with regard to the protection of
the Company's Investments.

15.      RECORDS

         The Investment Manager shall maintain appropriate books of account and
records relating to services performed pursuant hereto, which books of account
and records shall be available for inspection by representatives of the Company
upon reasonable notice during normal business hours.

16.      REIT QUALIFICATION

         Anything else in this Agreement to the contrary notwithstanding, the
Investment Manager shall not take any action (including, without limitation,
furnishing or rendering services to tenants of property or managing real
property), which action, in its judgment made in good faith, or in the judgment
of the trust managers as transmitted to the Investment Manager in writing, would
(a) adversely affect the status of the Company as a real estate investment trust
as defined and limited in the Code or which would make the Company subject to
the Investment Company Act of 1940, as amended, if not in the best interest of
the Company's shareholders or (b) violate any law, rule, regulation or statement
of policy of any government body or agency having jurisdiction over the Company
or over its securities, or (c) otherwise not be permitted by the Declaration of
Trust, as amended, or Bylaws of the Company, except if such action shall be
ordered by the trust managers, in which event the Investment Manager shall
promptly notify the trust managers of the Investment Manager's judgment that
such action or omission to act would adversely affect such status or violate any
such law, rule or regulation or the Declaration of Trust, as amended, or Bylaws
of the Company and shall refrain from taking such action pending further
clarification or instructions from the trust managers. In addition, the
Investment Manager shall take such affirmative steps which, in its good faith
judgment, or in the judgment of the trust managers as transmitted to the
Investment Manager in writing, would prevent or cure any action described in
(a), (b) or (c) above.

17.      SELF-DEALING

         Neither the Investment Manager nor any Affiliate of the Investment
Manager shall sell any property or assets to the Company or purchase any
property or assets from the Company, directly or indirectly, except as approved
by a majority of the Independent Trust Managers, provided that any Person
wholly-owned (directly or indirectly) by the Company may sell property or assets
to the Company or purchase assets from the Company without such approval. In
addition, except as approved by a majority of the Independent Trust Managers,
neither the Investment Manager nor any

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Affiliate of the Investment Manager shall receive any commission or other
remuneration, directly or indirectly, in connection with the activities of the
Company (except as expressly provided herein) or any joint venture or
partnership in which the Company is a party, unless such joint venture or
partnership is wholly-owned (directly or indirectly) by the Company. Except for
compensation received by the Investment Manager pursuant to Section 8 hereof,
all commissions or other remuneration received by the Investment Manager or an
Affiliate of the Investment Manager and not approved by the Independent Trust
Managers under this Section 17 shall be reported to the Company annually within
ninety (90) days following the end of the Company's fiscal year.

18.      NO PARTNERSHIP OR JOINT VENTURE

         The Company and the Investment Manager are not partners or joint
venturers with each other and neither the terms of this Agreement nor the fact
that the Company and the Investment Manager have joint interest in any one or
more investments shall be construed so as to make them such partners or joint
venturers or impose any liability as such on either of them.

19.      FIDELITY BOND

         The Investment Manager shall not be required to obtain or maintain a
fidelity bond in connection with the performance of its services hereunder.

20.      JURISDICTION

         This Agreement shall be governed by the laws of Texas.

21.      LIMITATION OF LIABILITY

         The Declaration of Trust establishing the Company (the "DECLARATION"),
a copy of which is duly filed with the County Clerk for Dallas County, Texas,
provides that the name "PMC Commercial Trust" refers to the trust managers under
the Declaration collectively as trust managers, but not individually or
personally; and that no trust manager, officer, shareholder, employee or agent
of the Company or its subsidiaries shall be held to any personal liability,
jointly or severally, for any obligation of, or claim against, the Company or
its subsidiaries. All persons dealing with the Company, in any way, shall look
only to the assets of the Company for the payment of any sum or the performance
of any obligations. Notwithstanding the foregoing, the Investment Manager hereby
acknowledges and agrees that it shall look only to the assets of the Company for
the payment of any sum or performance of any obligations due by or from the
Company pursuant to the terms and provisions hereof. Furthermore, except as
otherwise expressly provided herein, in no event shall the Company (original or
successor) ever be liable to the Investment Manager for any indirect or
consequential damages suffered by the Investment Manager from whatever cause.

                                      -12-
<PAGE>

22.      SURVIVAL OF OBLIGATIONS

         The obligations of the Company, PMC Capital and the Investment Manager
set forth in Section 10 hereof shall survive any termination or non-renewal of
this Agreement for a period of seven (7) years following the Termination Date.

         IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date first above written.

                                   PMC COMMERCIAL TRUST

                                   By: /s/  Lance B. Rosemore
                                      ------------------------------------------
                                            Lance B. Rosemore
                                            President

                                   PMC ASSET MANAGEMENT, INC.

                                   By: /s/  Lance B. Rosemore
                                      ------------------------------------------
                                            Lance B. Rosemore
                                            President

                                   PMC CAPITAL, INC.

                                   By: /s/  Lance B. Rosemore
                                      ------------------------------------------
                                            Lance B. Rosemore
                                            President

                                      -13-
<PAGE>
                           LOAN ORIGINATION AGREEMENT

         This Loan Origination Agreement dated as of July 1, 2003 (this
"AGREEMENT") is made and entered into by and among PMC Commercial Trust, a Texas
real estate investment trust (the "COMPANY"), PMC Asset Management, Inc., a
Texas corporation (the "INVESTMENT MANAGER") and a wholly-owned subsidiary of
PMC Advisers, Ltd. a Texas limited partnership ("PMC ADVISERS"), and PMC
Capital, Inc., a Florida corporation ("PMC CAPITAL").

         WHEREAS, management of PMC Capital believes that loan origination
opportunities exist for loans that generally conform to the lending criteria and
customer profile of PMC Capital's lending business, but that involve borrowers
that exceed SBA eligibility requirements or that exceed the lending capacity of
PMC Capital to fund; and

         WHEREAS, the Company was organized as a result of the decision of the
board of directors of PMC Capital that the amount of capital required to fund
the types of investments contemplated by a Company is not available to PMC
Capital without significant dilution to existing shareholders of PMC Capital or
substantial leverage, if at all; and

         WHEREAS, the board of directors of PMC Capital determined that the
creation of the Company as a separate entity to originate such loans was
appropriate; and

         WHEREAS, the board of directors of PMC Capital also determined that the
shareholders of PMC Capital would benefit by establishing the Investment Manager
as an indirect wholly owned subsidiary of PMC Capital in order to more fully
utilize the in-house staff and facilities of PMC Capital while providing the
shareholders of PMC Capital the benefit of the advisory fees to be paid to the
Investment Manager; and

         WHEREAS, the Company, the Investment Manger and PMC Capital desire to
define a system which will determine whether the Company or PMC Capital shall
have the right to make any proposed loan, as such opportunities arise from time
to time;

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

SECTION 1. DEFINITIONS

         Defined terms in this Agreement shall include in the singular number
the plural and in the plural number the singular.

<PAGE>

                  "Industry Concentration Limits" shall mean the limitations on
         loans made within a particular industry applicable to PMC Capital or
         its subsidiaries, which are a part of PMC Capital's fundamental
         policies enumerated in its SEC filing as such may be amended from time
         to time.

                  "SBA" shall mean the United States Small Business
         Administration.

                  "SBIC" shall have the meaning ascribed to such term in the
         Underwritten Offering.

                  "Underwritten Offering" shall mean the initial public offering
         of the Company pursuant to the Company's registration statement on Form
         S-11, number 33-65010 as filed with the Securities and Exchange
         Commission.

SECTION 2. DETERMINATION OF LOAN OPPORTUNITIES

         The Company, the Investment Manager and PMC Capital hereby agree that
upon completion of the Underwritten Offering, to the extent that the Company has
funds available to make a proposed loan, no loans will be made by PMC Capital
other than (i) loans in an original principal amount not exceeding $1,333,000
made pursuant to the SBA Section 7(a) or SBIC loan programs utilized by PMC
Capital's subsidiaries and (ii) bridge loans to be refinanced by SBA Section
7(a) or SBIC loans upon approval of the SBA loan application. The criteria to be
used by the Investment Manager for determination of how loan origination
opportunities are allocated between the Company and PMC Capital is further
illustrated in the flowchart attached hereto as Annex A.

SECTION 3. MISCELLANEOUS

         3.1 Governing Law; Submission to Jurisdiction. This Agreement and the
rights and obligations of the parties hereunder shall be construed in accordance
with and be governed by the laws of the State of Texas.

         3.2 Waivers and Amendments. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by a
written instrument executed by the Company, the Investment Manager and PMC
Capital.

         3.3 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Company, the Investment Manger and PMC Capital and
any of their respective successors and assigns, except that no party may assign
this Agreement without prior written consent of the other parties.

<PAGE>

         IN WITNESS HEREOF, each party hereto has caused its duly authorized
officer to execute and deliver this Agreement as of the date first above
written.

                                     PMC COMMERCIAL TRUST

                                     By:   /s/ Lance B. Rosemore
                                           ----------------------------------
                                              Lance B. Rosemore
                                              President

                                     PMC ASSET MANAGEMENT, INC.

                                     By:    /s/ Lance B. Rosemore
                                            ---------------------------------
                                              Lance B. Rosemore
                                              President

                                     PMC CAPITAL, INC.

                                     By:    /s/ Lance B. Rosemore
                                            --------------------------------
                                              Lance B. Rosemore
                                              President<PAGE>

                                                                    EXHIBIT 10.1

                               PURCHASE AGREEMENT

                                 BY AND BETWEEN

                          GRAND CASINOS NEVADA I, INC.

                                   ("SELLER")

                                       AND

                              DIAMOND RESORTS, LLC

                                  ("PURCHASER")

<PAGE>

                               PURCHASE AGREEMENT

         This Purchase Agreement ("Contract") is entered into this 26th day of
June, 2003 by and among GRAND CASINOS NEVADA I, INC., ("Seller"), a Minnesota
corporation, and DIAMOND RESORTS, LLC., ("Diamond" or "Purchaser"), a Nevada
limited liability company.

                                    RECITALS

         A. Seller is the owner in fee simple of those certain two parcels of
land containing approximately 3.245 acres fronting on Harmon Avenue in Las
Vegas, Clark County, Nevada, and more particularly described on EXHIBIT A
attached hereto, including all entitlements and appurtenances of record (the
"Property"), and the intangible property rights, if any, in the name "The
Chateaux" when used in connection with the improvements to be constructed on the
Property (the "Intangible Property").

         B. Seller desires to sell, and Purchaser desires to purchase, the
Property.

         C. Seller is entitled to occupy certain premises located in the Polo
Towers Resort, which premises presently are being used as a sales gallery (lobby
level) and sales offices (18th & 19th floors), hereinafter collectively referred
to as the "Towers Sales Center."

         D. Seller desires to assign, and Purchaser desires to assume, Seller's
rights and obligations in and to the Towers Sales Center.

         E. The parties desire to confirm the agreement between them by the
execution of this Contract.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing premises and the
respective representations, agreements, covenants and conditions herein
contained, and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, Seller and Purchaser agree as follows:

                                      -1-

<PAGE>

                                   ARTICLE I
                                   DEFINITIONS

         1.1      DEFINITIONS. See EXHIBIT B attached hereto and incorporated
herein by reference.

                                   ARTICLE II
   PURCHASE AND SALE OF PROPERTY; ASSIGNMENT OF RIGHTS TO TOWERS SALES CENTER

         2.1      PURCHASE AND SALE. Subject to the conditions and on the terms
contained in this Contract, on the Closing Date, Seller shall convey and
transfer to Purchaser fee simple title to the Property, subject to the Permitted
Exceptions as defined in Section 4.1. Conveyance and transfer of the Property at
the Closing shall be by recordable grant, bargain, sale deed, substantially in
the form of EXHIBIT C attached hereto and subject only to the Permitted
Exceptions. Assignment of Seller's interest in the Towers Sales Center shall be
by instrument substantially in the form of EXHIBIT D attached hereto (the
"Assignment"). Seller shall convey the Intangible Property by Quit Claim Bill of
Sale substantially in the form of EXHIBIT E attached hereto.

         2.2      PURCHASE PRICE. The total purchase price (the "Purchase
Price") to be paid to Seller by Purchaser for the Assets shall be Fifteen
Million Dollars ($15,000,000), and shall be paid by Purchaser to Seller (as set
forth in Section 2.4.2 herein).

         2.3      EARNEST MONEY DEPOSIT. Purchaser shall immediately deliver to
Escrow Agent its check or Immediately Available Funds in the amount of One
Hundred Thousand Dollars ($100,000) (such amount with interest shall be referred
to as the "Deposit"), which shall be held by Escrow Agent in an interest-bearing
trust account. The Deposit shall be, except as specifically set forth herein,
deemed earned by Seller and nonrefundable to Purchaser.

         2.4      PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid by
Purchaser to Seller at Closing as follows:

                  2.4.1    DEPOSIT. The Deposit shall be paid to Seller by
Escrow Agent on behalf of Purchaser.

                                      -2-

<PAGE>

                  2.4.2    PURCHASE NOTE. The amount of the Purchase Price, less
the Deposit, shall be paid by delivery to Seller at the Closing of a note
("Purchase Note") and deed of trust ("Deed of Trust") in the forms of EXHIBITS G
AND H respectively attached hereto.

                                  ARTICLE III
                                     SURVEY

         Purchaser has reviewed and approved a survey ("Survey") of the Property
prepared by a surveyor licensed in Nevada. Purchaser shall have paid all costs
related to the Survey at or prior to Closing.

                                   ARTICLE IV
                                      TITLE

         4.1      TITLE COMMITMENT. Purchaser has approved the title exceptions
set forth on EXHIBIT J attached hereto and which shall be deemed permitted
exceptions hereunder (the "Permitted Exceptions"). Notwithstanding anything
herein to the contrary, Seller shall cure or pay off any financial title
objection (such as liens, judgments, mortgages) at or prior to Closing
("Financial Title Objection"). The parties hereby agree that notwithstanding
anything else contained herein, that certain Amended and Restated Grant of
Reciprocal Easements and Declaration of Covenants, Conditions and Restrictions
made as of June 19, 2002, as amended March 25, 2003, and June 26, 2003 ("Master
CC&Rs") shall also be deemed a Permitted Exception.

         4.2      TITLE POLICY. This sale is subject to Purchaser being able to
obtain an ALTA extended owner's policy of title insurance (Form B, Rev.
10-17-70) from Title Insurer at Closing in the amount of the Purchase Price
insuring that Purchaser has fee title to the Property, subject only to Permitted
Exceptions ("Title Policy").

                                      -3-

<PAGE>

                                   ARTICLE V
                   POSSESSION, PRORATIONS AND CLOSING EXPENSES

         5.1      POSSESSION. Sole and exclusive possession of the Assets shall
be delivered to Purchaser on the Closing Date, subject only to rights of others
as may be unknown to Seller (as in the case of the Intangible Property) or which
are set forth in EXHIBIT J entitled Permitted Exceptions.

         5.2      REAL ESTATE TAXES. General and special real estate and other
ad valorem taxes or fees in lieu thereof, affecting the Property for the year of
Closing shall be prorated as of the Closing Date based upon the most recent
ascertainable amounts of each such item. Any such taxes prorated on an estimated
basis on the Closing Date shall be adjusted by the parties when and as the
actual amount of such item becomes known. Any such adjustment shall be effected
not later than fifteen (15) days following final determination of the amount of
such item, receipt of an invoice or bill therefor, and demand by the party to
whom credit is due. The provisions of this Section 5.2 shall survive Closing.

         5.3      CLOSING EXPENSES. Seller shall pay and be responsible for the
following costs associated with the transfer of the Property: (i) transfer or
documentary stamp taxes on the transfer of the Property, (ii) the cost of
preparing and recording any corrective instruments, (iii) the cost of curing
Financial Title Objections and any other title objections Seller elects or is
required to make, and (iv) the cost of the Title Policy. Purchaser shall be
responsible for the payment of the cost of endorsements to the Title Policy and
the Survey. Each party shall pay one-half of the escrow fee charged by Escrow
Agent. Except as otherwise specifically set forth herein, each party shall be
responsible for the fees and expenses of their respective designated
representatives, accountants and attorneys.

                                   ARTICLE VI
                              AFFIRMATIVE COVENANTS

         6.1      TRANSACTIONS AND ENCUMBRANCES AFFECTING THE PROPERTY. From the
date hereof to the Closing Date, and without Purchaser's written consent, Seller
shall not do, suffer, permit or agree to do any of the following:

                  6.1.1    Enter into any transaction affecting the Assets, or
any portion thereof, inconsistent with, or in violation of, this Contract or out
of the ordinary course of business; or

                                      -4-

<PAGE>

                  6.1.2    Sell, lease, encumber or grant any interest in the
Assets, or any part thereof, in any form or manner whatsoever, or otherwise
perform or permit any act which will diminish or otherwise affect Purchaser's
interest under this Contract or which will prevent Seller's full performance of
its obligations hereunder.

                  6.1.3    Modify, amend or supplement the Master CC&Rs in such
a manner that would adversely affect the Property in any material respect,
except that Purchaser acknowledges and approves that certain Amendment to
Article Four (only) of Amended and Restated Grant of Reciprocal Easements and
Declaration of Covenants, Conditions and Restrictions ("Article 4 Amendment").

                  6.1.4    Do or permit any other act which might reasonably be
anticipated to adversely affect the Assets or Seller's ability to perform
hereunder.

         6.2      PURCHASER'S ACCESS. From the date hereof to the Closing Date,
Seller shall permit representatives, agents, employees, contractors, appraisers,
architects and/or engineers designated by Purchaser ("Purchaser's Agents")
reasonable access to, and entry upon, the Property to examine, inspect, measure
and test the Property for all reasonable purposes. Purchaser shall indemnify and
hold Seller harmless from and against any and all claims, actions or demands
arising from or related to any incident, occurrence, personal injury or property
damage resulting from Purchaser or Purchaser's Agents, or anyone on Purchaser's
behalf performing the Purchaser's examinations, inspections, measurements and
testing of and on the Property. Purchaser also agrees that upon the completion
of any such examinations, inspections, measurements or tests that the Property
will remain in or be restored to substantially the same condition as before.
This indemnification shall survive the Closing or termination of this Contract,
and is not limited by the measure of liquidated damages set forth in Section
11.5. Purchaser or Purchaser's Agents shall, prior to accessing the Property,
provide Seller an insurance certificate evidencing public liability naming
Seller as an additional insured (from Purchaser and/or Purchaser's Agent) in
form reasonably satisfactory to Seller.

         6.3      OTHER AGREEMENTS. Until the Closing, Seller shall comply with
all agreements affecting the Property which will survive the transfer of title,
and shall deliver to Purchaser

                                      -5-

<PAGE>

immediately upon receipt copies of all notices of default under any of the
foregoing served upon Seller.

         6.4      TAXES. Seller shall pay when due all real estate and other ad
valorem taxes or fees in lieu thereof (collectively the "taxes") relating to the
Property and due and payable prior to Closing, provided, however, to the extent
permitted by law, Seller may postpone the payment of such taxes which may be the
subject of a good faith contest or appeal by Seller. Seller shall promptly pay
any such taxes determined to be due at the end of any such contest or appeal.

                                  ARTICLE VII
                            REPRESENTATIONS OF SELLER

         7.1      REPRESENTATIONS OF SELLER. Seller hereby represents and
warrants the following as of the Effective Date and as of the Closing Date:

                  7.1.1    TITLE TO PROPERTY. Seller has good and marketable
title to the Property, which as of the Closing will be subject only to Permitted
Exceptions.

                  7.1.2    AUTHORIZATION. Seller has full capacity, right, power
and authority to execute, deliver and perform under this Contract and all
documents to be executed by Seller pursuant hereto, and all required corporate
action and approvals therefor, have been duly and previously taken and obtained.
The individuals signing this Contract and all other documents executed or to be
executed pursuant hereto on behalf of Seller are and shall be duly authorized to
sign the same on Seller's behalf and to bind Seller thereto. This Contract and
all documents to be executed pursuant hereto by Seller are and shall be binding
upon and enforceable against Seller in accordance with their respective terms.

                  7.1.3    LITIGATION. To the best of Seller's knowledge, Seller
has not been served with notice of any claims, causes of action or other
litigation or proceedings pending or threatened in respect to the ownership,
operation or environmental condition of the Property or any part thereof.

                  7.1.4    FIRPTA WITHHOLDINGS. Purchaser will have no duty to
collect withholding taxes from Seller pursuant to the Foreign Investors Real
Property Tax Act of 1980, as amended ("FIRPTA").

                                      -6-

<PAGE>

                  7.1.5    MATERIAL FACTS. To the best of Seller's knowledge,
except as disclosed to Purchaser in writing, there are no facts or circumstances
which have or would have a material adverse effect upon the Assets or
Purchaser's use thereof or which would materially increase the cost of
developing the Property.

                  7.1.6    NO BANKRUPTCY/DISSOLUTION EVENT. No
Bankruptcy/Dissolution Event has occurred with respect to Seller.

                  7.1.7    SELLER'S COVENANT. Seller shall notify Purchaser
promptly in writing if Seller becomes aware of any transaction or occurrence
prior to the Closing Date which would make any of the representations of Seller
contained in this Article and/or Article VIII below untrue in any material
respect. Such notice shall not relieve Seller of any liability for such untruth
or impair any right of Purchaser as a result thereof.

                                  ARTICLE VIII
                              ENVIRONMENTAL MATTERS

         8.1      ENVIRONMENTAL REPRESENTATIONS. Except as may be revealed by an
Environmental Assessment, on and as of the Effective Date and on and as of the
Closing Date, Seller represents, to the actual knowledge of Lyle Berman, without
any inquiry, investigation or duty of inquiry or investigation by him (and
excluding any constructive, imputed or implied knowledge), that with regard to
the Property:

                  8.1.1    No part of the Property is in breach of any
Environmental Laws;

                  8.1.2    During Seller's ownership of the Property, the
Property has not been used as a sanitary landfill, waste dump site or for the
treatment, storage or disposal of Hazardous Materials.

         8.2      SPECIAL FLOOR HAZARD AREA. Seller represents and warrants that
Seller has not received any notice that all or a part of the Property is located
within an area that has been designated by the Federal Emergency Management
Agency, the Army Corps of Engineers or any other governmental body as being
subject to special flood hazards.

                                      -7-

<PAGE>
                                   ARTICLE IX
                               "AS-IS" CONDITION

         9.1      PROPERTY CONVEYED "AS-IS". Even though Seller and Persons
related to Seller may provide Purchaser with information regarding the Property,
Purchaser expressly acknowledges and agrees that Purchaser and Purchaser Agents
shall have had ample time and opportunity to inspect the Property and to perform
its due diligence and that if Purchaser elects to close on the Property, except
for the specific representations and warranties contained herein, the Property
will be sold "as is" "where is" with all faults and Purchaser agrees to accept
the Property in its "as is" condition on the Effective Date. Purchaser further
acknowledges that neither Seller nor Seller's agents have made, and that Seller
expressly disclaims making, any representation or warranty of any nature,
whether expressed or implied, to Purchaser with respect to the condition of the
Property, except as expressly provided herein.

                                   ARTICLE X
                          REPRESENTATIONS OF PURCHASER

         10.1     REPRESENTATIONS OF PURCHASER. To induce Seller to execute,
deliver and perform under this Contract, Purchaser hereby represents to Seller
on and as of the Effective Date and on and as of the Closing Date as follows:

                  10.1.1   AUTHORIZATION. Purchaser has full capacity, right,
power and authority to execute, deliver and perform under this Contract and all
documents to be executed by Purchaser pursuant hereto, and all required limited
liability company actions and approvals therefor have been duly taken and
obtained. The individuals signing this Contract and all other documents executed
or to be executed pursuant hereto on behalf of Purchaser are and shall be duly
authorized to sign the same on Purchaser's behalf and to bind Purchaser thereto.
This Contract and all documents to be executed pursuant hereto by Purchaser are
and shall be binding upon and enforceable against Purchaser in accordance with
their respective terms.

                  10.1.2   LEGAL MATTERS. To the best of Purchaser's knowledge,
there is no pending litigation or dispute, judgment or execution of any nature
whatsoever pending or threatened against Purchaser which could adversely affect
Purchaser's ability to enter into this Contract and perform its obligations to
consummate the transactions contemplated hereby.

                  10.1.3   NO BANKRUPTCY/DISSOLUTION EVENT. No
Bankruptcy/Dissolution Event has occurred with respect to Purchaser.

                                      -8-

<PAGE>

                  10.1.4   OBLIGATIONS OF CHATEAUX. Upon delivery of the
Repayment Note (as hereinafter defined) and Unwind Documents neither Purchaser,
Chateaux, or any affiliate of either of them shall have any further liability to
Seller or any affiliate of Seller with respect to Chateaux or the Property other
than pursuant to this Agreement.

                                   ARTICLE XI
                  CONDITIONS PRECEDENT, DEFAULT AND TERMINATION

         11.1     CONDITIONS PRECEDENT TO CLOSING. The obligation of Purchaser
to purchase the Assets, and close the transaction contemplated hereby is subject
to satisfaction of each of the following conditions precedent, the satisfaction
of which shall be determined solely by Purchaser in the exercise of its
reasonable judgment (unless a different standard is stated). Any of these
conditions precedent may be waived in Purchaser's sole discretion.

                  11.1.1   OLD NOTE. Seller shall have delivered to Purchaser at
Closing the duly endorsed Old Note (as hereinafter defined).

                  11.1.2   STATUS QUO OF MASTER CC&RS. Prior to the Closing,
none of the provisions of the Master CC&Rs which affect either the "Shark
Parcel" or "Diamond" (both as defined therein) shall be amended without the
prior written consent of Purchaser which will not be unreasonably withheld or
delayed (except that Purchaser approves the Article 4 Amendment). Seller, as of
the Effective Date and again as of the Closing Date, shall acknowledge and
confirm its guaranty in its capacity as "Grand" (as distinct from "Shark Owner")
pursuant to Article 4 of the Master CC&R's as amended. Purchaser acknowledges
that upon a successful Closing, it becomes the Shark Owner and agrees to perform
all the obligations of the Shark Owner (but not of "Grand") under the Master
CC&R's for so long as it owns the Property. The foregoing obligations of Seller
and Purchaser shall survive the Closing and delivery of the deed.

                  11.1.3   UNWIND DOCUMENTS. Seller shall have executed and
delivered to Purchaser the documents described in clauses (i), (iii) and (iv) of
the definition of Unwind Documents.

                  11.1.4   CLOSING DELIVERIES. Seller shall have delivered at
Closing all documents required from Seller under this Contract, including the
Assignment.

                                      -9-

<PAGE>

         11.2     SELLER'S CONDITIONS PRECEDENT TO CLOSING. The obligation of
Seller to sell the Assets and close the transactions contemplated hereby is
subject to satisfaction of each of the following conditions precedent, the
satisfaction of which shall be determined solely by Seller in the exercise of
its reasonable judgment (unless a different standard is stated). Any of these
conditions precedent may be waived by Seller in Seller's sole discretion.

                  11.2.1   REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of Purchaser set forth herein shall be true in
all material respects as of the Closing Date.

                  11.2.2   CLOSING DELIVERIES. Purchaser shall have paid the
Purchase Price as provided in Section 2.4 and shall have delivered at Closing
all documents required from Purchaser under this Contract and the document
described in clauses (ii), (iii) and (iv) of the definition of Unwind Documents.

                  11.2.3   CHATEAUX LOAN. At the Closing Diamond shall purchase
from Seller, without recourse or representation or warranty whatsoever by
Seller, the loan made by Seller to The Chateaux, LLC ("Chateaux") pursuant to
that certain Loan Agreement dated September 25, 2002 by and between Seller and
Chateaux, and evidenced by a note ("Old Note") of even date, for the outstanding
amount thereof, not to exceed One Million Dollars ($1,000,000) of principal plus
interest. Such payment shall be made by delivery to Seller of a note in the form
of EXHIBIT I attached hereto ("Repayment Note"), which shall be secured by the
Deed of Trust.

                  11.2.4   MARRIOTT TRANSACTION. Seller shall have satisfied
itself, in its sole discretion, that Purchaser shall have entered into a
non-contingent agreement with Marriott Ownership Resorts, Inc. with respect to
the development of the Property as a timeshare project ("Marriott Agreement").

         11.3     PURCHASER'S RIGHTS AND REMEDIES IN EVENT OF NON-SATISFACTION
OF CONDITIONS PRECEDENT. If Purchaser, in its reasonable discretion, determines
that any of the conditions precedent set forth in Section 11.1 shall be
unsatisfied by the date stated or, if no date is stated, the Closing Date,
Purchaser may, at its option, elect either (i) to terminate this Contract by
written notice to Seller, in which event the Deposit shall forthwith be returned
to Purchaser and thereupon this Contract shall be terminated and of no further
force or effect, or (ii) to waive the condition precedent.

                                      -10-

<PAGE>

         11.4     PURCHASER'S REMEDIES. The obligation of Purchaser to close the
transaction contemplated hereby is, at Purchaser's option, further subject to
all representations of Seller contained in this Contract being true and correct
in all material respects on and as of the Effective Date and the Closing Date
and all obligations of Seller to have been performed on or before the Closing
Date having been timely and duly performed. Upon default by Seller in its
obligation to convey the Assets, Purchaser's may, by notice to Seller, elect
either (i) to terminate this Contract, or (ii) to seek specific performance of
Seller's obligation to convey the Assets. If this Contract is terminated by
Purchaser pursuant to this Section 11.4, the Deposit shall be returned to
Purchaser and thereupon this Contract shall be terminated. The failure of a
condition precedent caused by the action or inaction of a third party not in the
control of Seller shall not be deemed a default by Seller in the fulfillment of
an obligation.

         11.5     SELLER'S SOLE REMEDY. Prior to entering into this Contract,
Purchaser and Seller have considered the damages that would be suffered by
Seller in the event of a default by Purchaser of its obligation to purchase the
Assets. Given all the factors which directly affect the value and marketability
of the Assets, the parties realize that it would be extremely difficult and
impracticable, if not impossible, to ascertain with any degree of certainty the
amount of damages which would be suffered by Seller in the event of Purchaser's
failure to perform its obligations under this Contract to purchase the Assets.
The parties hereby agree that a reasonable amount of liquidated damages is the
Deposit, and in the event of Purchaser's failure to perform its obligations
under this Contract to purchase the Assets, Seller shall, as its sole and
exclusive remedy, be entitled to retain the Deposit as liquidated damages.
Failure of Purchaser to deliver to Escrow Agent any of the documents required
under this Contract because any party to such document other than Purchaser or
any affiliate of Purchaser refuses to execute the same shall not be deemed a
default by Purchaser in its obligations under this Contract, but shall be deemed
a failure of a condition precedent, whereupon the Deposit shall be returned to
Purchaser and this Contract shall be terminated.

                                  ARTICLE XII
                                   BROKERAGE

         12.1     BROKERAGE. Each party hereby represents and warrants to the
other party they have not dealt with any broker or finder regarding the
transaction contemplated hereby. Each party shall indemnify, defend and hold the
other party harmless from any claim for brokerage commission or

                                      -11-

<PAGE>

finder's fee asserted by any broker or finder or any other Person claiming to
have been engaged by the applicable party. This indemnity of the parties shall
survive the Closing or termination of this Contract. The indemnity given by
Purchaser in this Article XII is not limited by the measure of liquidated
damages set forth in Section 11.5

                                  ARTICLE XIII
                           CASUALTY AND CONDEMNATION

         13.1     CASUALTY AND CONDEMNATION. If, after the Effective Date and
prior to the Closing Date, a material portion of the Property is damaged by a
natural disaster or other casualty or is taken by exercise of the power of
eminent domain or any proceedings are threatened or instituted to effect such a
taking, Seller shall immediately give Purchaser notice of such occurrence, and
if in the sole but reasonable judgment of Purchaser such casualty or
condemnation would have a material adverse impact on Purchaser's Contemplated
Use of the Property, Purchaser may, within fifteen (15) days after receipt of
such notice elect either (i) to terminate this Contract, in which event the
Deposit, together with all interest earned thereon, shall forthwith be returned
to Purchaser, and all obligations of the parties hereunder shall cease and this
Contract shall have no further force and effect, or (ii) to close the
transaction contemplated hereby as scheduled (except that if the Closing Date is
sooner than fifteen (15) days following Purchaser's receipt of such notice, the
Closing shall be delayed until Purchaser makes such election), in which event
Seller shall assign and/or pay to Purchaser at the Closing all insurance
proceeds or condemnation awards or other damages collected or claimed with
respect to such casualty or taking to the extent that such awards or damages
apply to the Property or portion thereof, or, if such sums are paid to a
mortgagee, the Purchase Price shall be reduced by the amount so paid. In the
event the Property is only partially damaged or taken, and Purchaser can utilize
the remainder for its Contemplated Use, Purchaser in its election of (ii) above
may elect to purchase only that portion of the Property not damaged or taken,
with such reduction in the Purchase Price as the parties may agree. In the case
of a casualty loss, the Purchase Price shall be reduced by the amount of any
deductible or co-insurance amount applicable to the unrestored loss.

         13.2     LOSS. This Article XIII is intended as an express provision
with respect to destruction and condemnation which supersedes the provisions of
the Nevada Uniform Vendor and Purchaser Risk Act.

                                      -12-

<PAGE>

                                  ARTICLE XIV
                                    CLOSING

         14.1     DATE AND PLACE. Closing of the transaction contemplated hereby
for the Assets shall be held at 10:00 A.M. (local time) at the offices of the
Escrow Agent in Las Vegas, at such date, place and time as the parties may
mutually agree ("Closing Date") but no later than July 3, 2003.

         14.2     SELLER'S DELIVERIES. On the Closing Date, Seller shall deliver
to the Escrow Agent the following closing documents, all duly executed by the
proper parties:

                  14.2.1   Seller's deed in a form substantially the same as
EXHIBIT C attached hereto, conveying to Purchaser good and marketable fee simple
title to the Property, subject only to the Permitted Exceptions.

                  14.2.2   Seller's FIRPTA Affidavit, substantially in the form
attached as EXHIBIT F, dated as of the Closing Date.

                  14.2.3   The Assignment.

                  14.2.4   All additional documents required by the provisions
of this Contract to be executed or delivered by Seller on or prior to Closing.

                  14.2.5   Documents evidencing the legal status, good standing
and authority of Seller and such other documents, instruments, affidavits,
certifications and confirmations as may reasonably be required and designated by
Purchaser, Purchaser's attorney, or the Escrow Agent to fully effect and
consummate the transactions contemplated hereby, so long as they do not require
Seller to expend any material amount of additional money not contemplated in
this Contract.

                  14.2.6   Original documents relating to the purchase of the
Chateaux Loan including but not limited to the Old Note.

                  14.2.7   The Quit Claim Bill of Sale covering the Intangible
Property.

                  14.2.8   The Unwind Documents described in clauses (i), (iii)
and (iv) of the definition thereof.

                                      -13-

<PAGE>

         14.3     PURCHASER'S DELIVERIES. On the Closing Date, Purchaser shall
deliver to the Escrow Agent the following documents, all duly executed by the
proper parties:

                  14.3.1   All documents evidencing the legal status, standing
and authority of Purchaser and such other documents, instruments, certifications
and confirmation as may reasonably be required and designated by Seller,
Seller's attorney, or the Escrow Agent to fully effect and consummate the
transaction contemplated hereby, so long as they do not require Purchaser to
expend any material amount of additional money not contemplated in this
Contract.

                  14.3.2   The Unwind Documents described in clauses (ii), (iii)
and (iv) of the definition thereof, the Purchase Note, the Deed of Trust, the
Repayment Note and evidence that the Marriott Agreement has been executed.

                  14.3.3   All additional documents required by the provisions
of this Contract to be executed or delivered by Purchaser on or prior to
Closing.

                  14.3.4   APPROVAL OF CLOSING DOCUMENTS. All Closing documents
to be furnished by Seller or Purchaser pursuant hereto shall be in form and
substance reasonably satisfactory to both Seller and Purchaser.

                                   ARTICLE XV
                        CONTEMPLATED USE OF THE PROPERTY

         15.1     CONTEMPLATED USE OF THE PROPERTY. The parties hereto
acknowledge that Purchaser contemplates (i) developing and constructing, in
phases, a residential condominium resort on the Property, totaling approximately
eight hundred sixty-eight (868) units; (ii) submitting the Property in phases to
an interval ownership plan; and (iii) selling timeshare interests pursuant
thereto under its Marriott Vacation Club International brand.

         15.2     DEFINITIONS. Any use in this Contract of the phrases
"Purchaser's Contemplated Use", "contemplated use of the Property," or similar
phrases shall mean Purchaser's development, use and enjoyment of the Property as
described in Section 15.1.

                                  ARTICLE XVI
                                    NOTICES

                                      -14-

<PAGE>

         16.1     NOTICES. Any notice, request, demand, instruction or other
document to be given or served hereunder or under any document or instrument
executed pursuant hereto shall be in writing and shall be delivered personally
with a receipt requested therefor or by telex or telephone facsimile or sent by
a recognized overnight courier service or by United States registered or
certified mail, return receipt requested, postage prepaid and addressed to the
parties at their respective addresses set forth below, and the same shall be
effective (i) upon receipt or refusal if delivered personally or by telex or by
telephone facsimile, (ii) one business day after depositing with such an
overnight courier service, or (iii) three business days after deposit in the
mails if mailed. A party may change its address for receipt of notices by
service of a notice of such change in accordance herewith. All notices by telex
or telephone facsimile shall be subsequently confirmed by U.S. certified or
registered mail or by recognized overnight courier service.

If to Purchaser:           Diamond Resorts International
                           Attn: President
                           3745 Las Vegas Blvd. South
                           Las Vegas, Nevada 89109

with copies to:            Lionel Sawyer & Collins
                           Attn: Jeffrey P. Zucker, Esq.
                           1700 Bank of America Plaza
                           300 South Fourth Street
                           Las Vegas, Nevada 89101

If to Seller:              Grand Casinos Nevada I, Inc.
                           130 Cheshire Lane
                           Minnetonka, Minnesota 55305
                           Attention: President
                           Fax: (952) 449-7064

with a copy to:            Maslon Edelman Borman & Brand, LLP
                           3300 Wells Fargo Center
                           90 South Seventh Street
                           Minneapolis, Minnesota 55402
                           Attention: Neil I. Sell, Esq.
                           Fax: (612) 672-8397

                                  ARTICLE XVII
                    ENTIRE AGREEMENT, AMENDMENTS AND WAIVERS

         17.1     ENTIRE AGREEMENT, AMENDMENTS AND WAIVERS. This Contract,
inclusive of the recital paragraphs above, which by this reference are made a
part of this Contract, contains the entire

                                      -15-

<PAGE>

agreement and understanding of the parties with respect to the subject matter
hereof, and the same may not be amended, modified or discharged nor may any of
its terms be waived except by an instrument in writing signed by the party to be
bound thereby.

                                 ARTICLE XVIII
                        CONTEMPLATED USE OF THE PROPERTY

         18.1     NO THIRD PARTY BENEFITS. This Contract is for the sole and
exclusive benefit of the parties hereto and their respective successors and
assigns, and no third party other than a permitted assignee of Purchaser or
Seller is contemplated to or shall have any rights hereunder.

         18.2     ASSIGNMENT. Neither party may assign any of its rights or
obligations hereunder without the prior written consent of the other party,
which consent shall not be unreasonably withheld or delayed, except (i)
Purchaser may assign its rights and obligations under this Contract to NEWCO
without Seller's consent (which assignment will not release Purchaser of its
obligations hereunder) and (ii) to a subsidiary or affiliated company of either
party or pursuant to a merger of Seller or Purchaser provided that in each
instance the assigning party remains liable hereunder.

                                  ARTICLE XIX
                                 MISCELLANEOUS

         19.1     FURTHER ASSURANCES. The parties each agree to do, execute,
acknowledge and deliver all such further acts, instruments and assurances and to
take all such further action before or after the Closing as shall be reasonably
necessary or desirable to fully carry out this Contract and to fully consummate
and effect the transactions contemplated hereby.

         19.2     SURVIVAL AND BENEFIT. All representations, agreements,
indemnifications and obligations of the parties shall survive the Closing, and
the same shall inure to the benefit of, and be binding upon, the respective
successors and assigns of the parties.

         19.3     INTERPRETATION.

                  19.3.1   The headings and captions herein are inserted for
convenient reference only and the same shall not limit nor construe the Sections
or Articles to which they apply nor otherwise affect the interpretation hereof.

                                      -16-

<PAGE>

                  19.3.2   The terms "hereby", "hereof", "hereto", "herein",
"hereunder", and any similar terms shall refer to this Contract, and the term
"hereafter" shall mean after, and the term "heretofore" shall mean before, the
Effective Date.

                  19.3.3   Words of the masculine, feminine or neuter gender
shall mean and include the correlative words of other genders, and words
importing the singular number shall mean and include the plural number and vice
versa.

                  19.3.4   Words importing persons shall include firms,
associations, partnerships, limited liability companies, trusts, corporations
and other legal entities, including public bodies, as well as natural persons.
No reference herein to Seller or Purchaser shall, in and of itself, be deemed to
refer to its shareholders or members as such.

                  19.3.5   The terms "include," "including," and similar terms
shall be construed as if followed by the phrase "without being limited to".

                  19.3.6   This Contract and any document or instrument executed
pursuant hereto may be executed in any number of counterparts each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

                  19.3.7   All references herein to "days" shall mean calendar
days.

                  19.3.8   This Contract shall be governed by and construed in
accordance with the laws of the State of Nevada.

                  19.3.9   Time is of the essence of this Contract.

                  19.3.10  Except as otherwise specifically set forth in this
Contract, neither Seller nor Purchaser shall avail itself of any remedy granted
to it hereunder based upon an alleged default of the other party hereunder
unless and until written notice of the alleged default, in reasonable detail,
has been delivered to the defaulting party by the non-defaulting party and the
alleged default has not been cured on or before 5:00 p.m. (local time) on the
fifth (5th) day next following delivery of the notice of default.

                                      -17-

<PAGE>

                  19.3.11  This Contract shall not be construed more strictly
against one party than against the other merely by virtue of the fact that it
may have been prepared primarily by counsel for one of the parties, it being
recognized that both Purchaser and Seller have contributed substantially and
materially to the preparation of this Contract.

                  19.3.12  Any condition precedent imposed as a contingency
under this Contract may be waived by the party entitled to satisfaction of the
condition as a pre-requisite to that party's performance. Any condition
precedent which remains unsatisfied upon Closing shall be deemed to be waived by
the party entitled to satisfaction.

         19.4     DISCREPANCY IN DESCRIPTIONS. If prior to the delivery of the
deed, it appears that the legal description of the real property to be purchased
does not include or correctly describe Seller's fee simple title therein or
appurtenances thereto, the legal description shall be modified to correctly
describe the same at Purchaser's request.

         19.5     PUBLICITY. All notice to third parties and all other publicity
concerning the transaction contemplated hereby prior to the Closing Date shall
be jointly planned and coordinated by and between Purchaser and Seller. None of
the parties shall act unilaterally in this regard without the prior written
approval of the other, except as required by law; however, this approval shall
not be unreasonably withheld or delayed.

         19.6     RELATION OF PARTIES. This Contract shall not be deemed, held
or construed as creating a partnership or joint venture between any of the
parties hereto. Breach of this Contract due to the action or inaction of only
one of the parties constituting Purchaser shall not give rise to liability on
the part of the other party.

         19.7     HEADINGS. The captions and headings used in this Contract are
for convenience only and do not in any way limit, amplify, or otherwise modify
the provisions of this Contract.

         19.8     INVALID PROVISIONS. If any provision of this Contract is held
to be illegal, invalid or unenforceable under present or future laws, such
provision shall be fully severable; this Contract shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part of this Contract; and the remaining provisions of this Contract
shall remain in full

                                      -18-

<PAGE>

force and effect and shall not be affected by such illegal, invalid, or
unenforceable provision or by its severance from this Contract.

         19.9     ATTORNEY'S FEES. In the event it becomes necessary for either
party hereto to file suit to enforce this Contract or any provision contained
herein, the prevailing party shall be entitled to recover reasonable attorney's
fees at both the trial and appellate stages.

                                   ARTICLE XX
                              OFFER AND ACCEPTANCE

         20.1     OFFER AND ACCEPTANCE. Delivery by either party to the other of
a copy of this Contract executed by such party shall constitute an offer by such
party to sell or purchase, as the case may be, the Assets upon the terms and
conditions herein set forth and subject to the provisions herein contained,
which offer shall be effective for a period of ten (10) days after receipt by
the other party (unless otherwise previously revoked). If the other party fails
to deliver a fully executed counterpart of this Contract to the offeror prior to
expiration of the offer period, then the offer shall automatically be revoked
and rescinded in its entirety, and upon such revocation and rescission, the
offer and this Contract shall have no further force or effect.

        [The remainder of this page has been left blank intentionally.]

                                      -19-

<PAGE>

         IN WITNESS WHEREOF, this Contract has been executed and delivered by
Seller and Purchaser on the respective dates set forth next to each of their
signatures.

                                      SELLER:

                                      GRAND CASINOS NEVADA I, INC.

Dated: June 26, 2003                  By:    /s/ Timothy J. Cope
                                             -------------------

                                      Title: CFO

                                      PURCHASER:

                                      DIAMOND RESORTS, LLC

Dated: June 26, 2003                  By:    /s/ Stephen J. Cloobeck
                                            ------------------------

                                      Title: President

                                      -20-

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