Exhibit 10.5

 

RECOURSE GUARANTY

This RECOURSE GUARANTY, dated as of July 14, 2006 (this “Guaranty”), made by
MAUI LAND & PINEAPPLE COMPANY, INC., a Hawaii Corporation, having an address at
120 Kane Street, Kapalua, Maui, Hawaii 96732 (“ML&P”); THE RITZ-CARLTON
DEVELOPMENT COMPANY, INC., a Delaware corporation, having an office at 6649
Westwood Boulevard, Suite 500, Orlando, Florida 32821 (“Ritz-Carlton”); and
EXCLUSIVE RESORTS DEVELOPMENT COMPANY, LLC, a Delaware limited liability
company, having an address at 1530 16th Street, Suite 500, Denver, Colorado
80202 (“Exclusive Resorts”; ML&P, Ritz Carlton and Exclusive Resorts being
referred to herein individually as a “Principal” and collectively as
“Principals”), in favor of LEHMAN BROTHERS HOLDINGS INC., a Delaware
corporation, having an office at 399 Park Avenue, New York, New York 10022
(“Lender”).

W I T N E S S E T H:

WHEREAS, Lender is concurrently herewith making a loan to KAPALUA BAY, LLC, a
Delaware limited liability company (“Borrower”), in the maximum principal amount
of THREE HUNDRED SEVENTY MILLION and 00/100 DOLLARS ($370,000,000.00) (the
“Loan”) secured by a mortgage on certain real property and improvements more
particularly described on Exhibits A-1 and A-2 attached hereto (the “Real
Property”);

WHEREAS, the Loan (i) has been made in accordance with the terms of a
construction loan agreement, dated as of the date hereof, between Borrower and
Lender (the “Loan Agreement”; capitalized terms used herein and not otherwise
defined shall have the meanings ascribed thereto in the Loan Agreement), (ii) is
evidenced by the Note and (iii) is secured by the Mortgage (the Loan Agreement,
the Note, the Mortgage and the other documents and instruments executed by
Borrower or Principal or delivered in connection with the Loan being
collectively referred to herein as the “Loan Documents”);

WHEREAS, except as hereinafter set forth, Lender’s recourse under the Loan
Documents is limited to Borrower’s interest in and to the Project and the other
collateral given as security under the Mortgage and the other Loan Documents;

WHEREAS, Borrower is personally liable for the Recourse Obligations;

WHEREAS, Principal shall derive substantial economic benefit from the Loan; and

WHEREAS, as a material condition to making the Loan, Lender requires that
Principal, and Principal has agreed, to guaranty the Recourse Obligations.

NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Principal agrees as follows:

1.             EACH PRINCIPAL, SEVERALLY, HEREBY ABSOLUTELY AND UNCONDITIONALLY
GUARANTIES THE PROMPT SATISFACTION AND DISCHARGE OF ANY AND ALL OF THE RECOURSE
OBLIGATIONS, WITHOUT DEFENSE, OFFSET, COUNTERCLAIM OR RIGHT OF SUBROGATION, EACH
OF WHICH IS HEREBY WAIVED.

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This Guaranty is and shall be construed as a continuing, absolute and
unconditional guaranty of payment, and not as a guaranty of collection.  It is
expressly understood and agreed that this is a continuing guaranty and that the
obligations of Principal hereunder are and shall be absolute under any and all
circumstances, without regard to the validity, regularity or enforceability of
the Note (excluding the Recourse Obligations) or the other Loan Documents, a
true copy of each of which documents Principal hereby acknowledges having
received and reviewed.

 

Notwithstanding anything to the contrary contained herein, in no event shall (i)
ML&P be liable for an amount in excess of fifty one percent (51%) of the sums
due to Lender hereunder, (ii) Ritz-Carlton be liable for an amount in excess of
thirty-four percent (34%) of the sums due to Lender hereunder or (iii) Exclusive
Resorts be liable for an amount in excess of fifteen percent (15%) of the sums
due to Lender hereunder.

2.             PRINCIPAL HEREBY WAIVES: (A) NOTICE OF ACCEPTANCE OF THIS
GUARANTY BY LENDER AND OF PRESENTMENT, DEMAND, PROTEST, NOTICE OF PROTEST AND OF
DISHONOR, NOTICE OF DEFAULT AND, EXCEPT FOR THE NOTICES SET FORTH HEREIN, ALL
OTHER NOTICES OF EVERY KIND OR NATURE NOW OR HEREAFTER PROVIDED BY AGREEMENT OR
AVAILABLE AT LAW; (B) THE PLEADING OF ANY STATUTE OF LIMITATIONS AS A DEFENSE TO
THE OBLIGATIONS HEREUNDER; AND (C) ANY RIGHT TO REQUIRE OR COMPEL LENDER, PRIOR
TO EXERCISING ITS RIGHTS HEREUNDER TO FIRST PROCEED AGAINST BORROWER OR ANY
SECURITY FOR THE LOAN, OR TO PURSUE ANY OTHER REMEDY AVAILABLE TO LENDER. 
LENDER’S FAILURE TO EXERCISE, OR DELAY IN EXERCISING, ANY RIGHT OR POWER
HEREUNDER SHALL NOT OPERATE AS A WAIVER THEREOF, NOR SHALL ANY SINGLE OR PARTIAL
EXERCISE BY LENDER OF ANY RIGHT, REMEDY OR POWER HEREUNDER PRECLUDE ANY OTHER OR
FUTURE EXERCISE OF ANY OTHER RIGHT, REMEDY OR POWER.  PRINCIPAL ACKNOWLEDGES
THAT LENDER MAY SEEK RECOVERY OF THE RECOURSE OBLIGATIONS FROM PRINCIPAL WITH
THE SAME FORCE AND EFFECT AS IF PRINCIPAL WERE PRIMARY OBLIGOR UNDER THE NOTE
AND THE OTHER LOAN DOCUMENTS.

3.             PRINCIPAL FURTHER AGREES THAT THE VALIDITY OF THIS GUARANTY AND
THE OBLIGATIONS OF PRINCIPAL HEREUNDER SHALL IN NO WAY BE TERMINATED, AFFECTED
OR IMPAIRED BY REASON OF: (A) THE ASSERTION BY LENDER OF ANY RIGHTS OR REMEDIES
WHICH IT MAY HAVE UNDER OR WITH RESPECT TO THE NOTE OR THE OTHER LOAN DOCUMENTS
AGAINST ANY PERSON OBLIGATED THEREUNDER OR AGAINST THE OWNER OF THE PROJECT; (B)
ANY FAILURE TO FILE OR RECORD ANY OF THE LOAN DOCUMENTS OR TO TAKE OR PERFECT
ANY SECURITY INTENDED TO BE PROVIDED THEREBY; (C) THE RELEASE OR EXCHANGE OF THE
REAL PROPERTY OR ANY OTHER COLLATERAL FOR THE LOAN; PROVIDED THAT THIS GUARANTY
SHALL NOT, WITHOUT THE PRIOR CONSENT OF PRINCIPALS, COVER OR PERTAIN TO ANY
RECOURSE OBLIGATIONS THAT RELATE TO SUCH RELEASED OR EXCHANGED PORTION OF THE
COLLATERAL ARISING FROM AND AFTER THE RELEASE OF SUCH RELEASED OR EXCHANGED
COLLATERAL; (D) THE COMMENCEMENT OF A CASE UNDER THE BANKRUPTCY CODE BY OR
AGAINST ANY PERSON OBLIGATED UNDER THE NOTE OR THE OTHER LOAN DOCUMENTS; OR (E)
ANY PAYMENT MADE ON THE DEBT, WHETHER MADE BY BORROWER OR PRINCIPAL OR ANY OTHER
PERSON, WHICH IS REQUIRED TO BE REFUNDED PURSUANT TO THE BANKRUPTCY CODE; IT
BEING UNDERSTOOD THAT NO PAYMENT SO REFUNDED SHALL BE CONSIDERED AS A PAYMENT IN
REDUCTION OF THE DEBT, NOR SHALL IT HAVE THE EFFECT OF REDUCING THE LIABILITY OF
PRINCIPAL HEREUNDER.  IT IS FURTHER UNDERSTOOD THAT IF BORROWER SHALL HAVE TAKEN
ADVANTAGE OF, OR BE SUBJECT TO THE PROTECTION OF, ANY PROVISION OF THE
BANKRUPTCY CODE, THE EFFECT OF WHICH IS TO PREVENT OR DELAY LENDER FROM TAKING
ANY REMEDIAL ACTION AGAINST BORROWER, INCLUDING THE EXERCISE OF ANY OPTION
LENDER HAS TO DECLARE THE DEBT DUE AND PAYABLE ON THE HAPPENING OF ANY DEFAULT
OR EVENT BY WHICH, UNDER THE TERMS OF THE LOAN DOCUMENTS, THE DEBT SHALL BECOME
DUE AND PAYABLE, LENDER MAY, AS AGAINST PRINCIPAL, NEVERTHELESS, DECLARE THE

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Recourse Obligations due and payable and enforce any and all of its rights and
remedies provided for herein.

4.             PRINCIPAL FURTHER AGREES: (A) THAT THIS GUARANTY SHALL REMAIN AND
CONTINUE IN FULL FORCE AND EFFECT, NOTWITHSTANDING ANY MODIFICATION, EXTENSION
OR RENEWAL OF THE NOTE OR ANY OF THE OTHER LOAN DOCUMENTS; (B) THAT LENDER SHALL
NOT BE UNDER A DUTY TO PROTECT, SECURE OR INSURE ANY SECURITY OR LIEN PROVIDED
BY THE LOAN DOCUMENTS OR OTHER COLLATERAL FOR THE LOAN; AND (C) THAT OTHER
INDULGENCE OR FORBEARANCE MAY BE GRANTED UNDER ANY OR ALL OF THE LOAN DOCUMENTS,
WITHOUT NOTICE TO OR FURTHER CONSENT OF PRINCIPAL.  THIS GUARANTY SHALL
TERMINATE UPON THE COMPLETE PAYMENT OF THE DEBT AND FULFILLMENT OF ANY
OUTSTANDING OBLIGATIONS OF PRINCIPALS UNDER THIS GUARANTY.

5.             EXCEPT AS MAY BE PERMITTED UNDER THE LOAN AGREEMENT, PRINCIPAL
WILL NOT CONVEY, TRANSFER OR ASSIGN, DIRECTLY OR INDIRECTLY, ANY PORTION OF THE
MORTGAGED PROPERTY OF ANY NATURE, WHETHER REAL, PERSONAL OR MIXED, TANGIBLE OR
INTANGIBLE, OR ANY INTEREST THEREIN, FOR LESS THAN FULL AND FAIR CONSIDERATION. 
NOTHING HEREIN SHALL BE CONSTRUED TO PROHIBIT ANY DIVIDEND OR DISTRIBUTION OF
EARNINGS IN THE ORDINARY COURSE OF PRINCIPAL’S BUSINESS.

6.             ANY INDEBTEDNESS OF BORROWER TO PRINCIPAL NOW OR HEREAFTER
EXISTING (INCLUDING, WITHOUT LIMITATION, ANY RIGHTS OF SUBROGATION PRINCIPAL MAY
HAVE AS A RESULT OF ANY PAYMENT BY PRINCIPAL UNDER THIS GUARANTY), TOGETHER WITH
ANY INTEREST THEREON, SHALL BE, AND SUCH INDEBTEDNESS IS HEREBY, DEFERRED,
POSTPONED AND SUBORDINATED TO THE PRIOR PAYMENT IN FULL OF THE DEBT.  UNTIL
PAYMENT IN FULL OF THE DEBT (AND INCLUDING INTEREST ACCRUING ON THE NOTE AFTER
THE COMMENCEMENT OF A PROCEEDING BY OR AGAINST BORROWER UNDER THE BANKRUPTCY
CODE WHICH INTEREST THE PARTIES AGREE SHALL REMAIN A CLAIM THAT IS PRIOR AND
SUPERIOR TO ANY CLAIM OF PRINCIPAL NOTWITHSTANDING ANY CONTRARY PRACTICE, CUSTOM
OR RULING IN CASES UNDER THE BANKRUPTCY CODE GENERALLY), PRINCIPAL AGREES NOT TO
ACCEPT ANY PAYMENT OR SATISFACTION OF ANY KIND OF INDEBTEDNESS OF BORROWER TO
PRINCIPAL, (EXCEPT UNDER THE MARKETING AGREEMENTS, THAT CERTAIN TECHNICAL
SERVICES AGREEMENT DATED SEPTEMBER 1, 2004, BETWEEN BORROWER AND RITZ-CARLTON,
THAT CERTAIN PROJECT DEVELOPMENT MANAGEMENT AGREEMENT DATED OCTOBER 1, 2004,
BETWEEN BORROWER AND RITZ-CARLTON AND THAT CERTAIN ENTITLEMENT SERVICES LETTER
AGREEMENT BETWEEN BORROWER AND KAPALUA LAND COMPANY DATED AUGUST 16, 2005). 
FURTHER, IF PRINCIPAL SHALL NOW OR AT ANY TIME IN THE FUTURE COMPRISE MORE THAN
ONE PERSON, FIRM OR CORPORATION, PRINCIPAL AGREES THAT UNTIL SUCH PAYMENT IN
FULL OF THE DEBT: (A) NO ONE OF THEM SHALL ACCEPT PAYMENT FROM THE OTHERS BY WAY
OF CONTRIBUTION ON ACCOUNT OF ANY PAYMENT MADE HEREUNDER BY SUCH PARTY TO
LENDER; (B) NO ONE OF THEM WILL TAKE ANY ACTION TO EXERCISE OR ENFORCE ANY
RIGHTS TO SUCH CONTRIBUTION; AND (C) IF ANY ONE OF THEM SHOULD RECEIVE ANY
PAYMENT, SATISFACTION OR SECURITY FOR ANY INDEBTEDNESS OF BORROWER TO ANY
PRINCIPAL OR FOR ANY CONTRIBUTION BY THE OTHERS OF THEM FOR PAYMENT MADE
HEREUNDER BY THE RECIPIENT TO LENDER, SUCH PAYMENT, SATISFACTION OR SECURITY
SHALL BE DELIVERED TO LENDER IN THE FORM RECEIVED, ENDORSED OR ASSIGNED AS MAY
BE APPROPRIATE FOR APPLICATION ON ACCOUNT OF, OR AS SECURITY FOR, THE DEBT AND
UNTIL SO DELIVERED SHALL BE HELD IN TRUST FOR LENDER AS SECURITY FOR THE DEBT.

7.               PRINCIPAL HEREBY INDEMNIFIES LENDER FROM AND AGAINST ANY AND
ALL CLAIMS, LOSSES, DAMAGES AND LIABILITIES GROWING OUT OF OR RESULTING FROM
THIS GUARANTY (INCLUDING, WITHOUT LIMITATION, ENFORCEMENT OF THIS GUARANTY),
EXCEPT CLAIMS, LOSSES, DAMAGES OR LIABILITIES RESULTING FROM LENDER’S GROSS
NEGLIGENCE AND WILLFUL MISCONDUCT.  PRINCIPAL WILL UPON WRITTEN

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demand pay to Lender the amount of any and all actual expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
Lender may incur in connection with (1) any amendment to this Guaranty, (2) the
administration of this Guaranty, (3) the exercise or enforcement of any of the
rights of Lender under this Guaranty, or (4) the failure by Principal to perform
or observe any of the provisions of this Guaranty.

 

8.               TO INDUCE LENDER TO EXECUTE THE LOAN DOCUMENTS AND TO MAKE THE
LOAN AND PERFORM ITS OBLIGATIONS THEREUNDER, EACH PRINCIPAL, IN RESPECT OF
ITSELF, SEVERALLY, HEREBY REPRESENTS AND WARRANTS TO LENDER IN RESPECT OF ITSELF
AS FOLLOWS:

(I)            PRINCIPAL IS AND ALWAYS HAS BEEN A DULY ORGANIZED AND VALIDLY
EXISTING LIMITED LIABILITY COMPANY OR CORPORATION, AS THE CASE MAY BE, DULY
ORGANIZED OR INCORPORATED UNDER THE LAWS OF THE STATE OF ITS FORMATION OR
INCORPORATION, AS THE CASE MAY BE.

(II)           PRINCIPAL HAS FULL POWER AND AUTHORITY TO EXECUTE, DELIVER AND
PERFORM THIS GUARANTY, AND SUCH EXECUTION, DELIVERY AND PERFORMANCE HAVE BEEN
DULY AUTHORIZED BY ALL REQUISITE ACTION ON THE PART OF PRINCIPAL.

(III)          NO CONSENT, APPROVAL OR AUTHORIZATION OF OR DECLARATION,
REGISTRATION OR FILING WITH ANY GOVERNMENTAL AUTHORITY OR NONGOVERNMENTAL
PERSON, INCLUDING ANY CREDITOR, PARTNER, OR MEMBER OF PRINCIPAL, IS REQUIRED IN
CONNECTION WITH THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS GUARANTY THAT
HAS NOT BEEN OBTAINED OR WAIVED.

(IV)          THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS GUARANTY WILL NOT
CONSTITUTE A BREACH OR DEFAULT UNDER ANY OTHER MATERIAL AGREEMENT TO WHICH
PRINCIPAL IS A PARTY OR MAY BE BOUND.

(V)           THERE IS NO DEFAULT UNDER THIS GUARANTY, OR ANY OF THE OTHER LOAN
DOCUMENTS, NOR ANY CONDITION WHICH, AFTER NOTICE OR THE PASSAGE OF TIME OR BOTH,
WOULD CONSTITUTE A DEFAULT OR AN EVENT OF DEFAULT UNDER SAID DOCUMENTS.

(VI)          PRINCIPAL IS SOLVENT, AND NO BANKRUPTCY, REORGANIZATION,
INSOLVENCY OR SIMILAR PROCEEDING UNDER ANY STATE OR FEDERAL LAW WITH RESPECT TO
PRINCIPAL HAS BEEN INITIATED.

(vii)         Neither Principal nor any Person holding a direct or indirect
interest in Borrower or Principal, as the case may be, is (or will be) a person
with whom Lender is restricted from doing business under OFAC (including Persons
named on OFAC’s Specially Designated and Blocked Persons list) or under any
statute, executive order (including the September 24, 2001, Executive Order
Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
to Commit, or Support Terrorism), or other governmental action and is not and
shall not knowingly engage in any dealings or transactions or otherwise be
associated with such Persons.  In addition, Principal hereby agrees to provide
Lender with any additional information that Lender deems necessary from time to
time in order to ensure compliance with all Laws concerning money laundering and
similar activities.

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(VIII)        PRINCIPAL HAS DISCLOSED TO LENDER ALL MATERIAL FACTS AND HAS NOT
FAILED TO DISCLOSE ANY MATERIAL FACT THAT COULD CAUSE ANY REPRESENTATION OR
WARRANTY MADE HEREIN TO BE MATERIALLY MISLEADING.

(IX)           EACH OF THE REPRESENTATIONS AND WARRANTIES MADE BY PRINCIPAL
HEREIN OR IN ANY OF THE OTHER LOAN DOCUMENTS IS TRUE, COMPLETE AND CORRECT IN
ALL MATERIAL RESPECTS AS OF THE DATE MADE.

9.               [Intentionally Deleted].

 

10.             THE PROVISIONS OF ARTICLE 23 OF THE LOAN AGREEMENT ARE HEREBY
INCORPORATED BY REFERENCE, EXCEPT THAT ALL REFERENCES TO “BORROWER” THEREIN
SHALL BE DEEMED TO BE “PRINCIPAL” AND PRINCIPAL’S ADDRESS SET FORTH IN THE FIRST
PARAGRAPH OF THIS GUARANTY SHALL BE ITS ADDRESS FOR SERVICE OF PROCESS.  ALL
NOTICES UNDER THIS GUARANTY SHALL BE PROVIDED TO ALL PRINCIPALS AND LENDER.

11.             THIS GUARANTY CONSTITUTES THE ENTIRE AGREEMENT BETWEEN PRINCIPAL
AND LENDER WITH RESPECT TO THE MATTERS REFERRED TO HEREIN, AND NO MODIFICATION
OR WAIVER OF ANY OF THE TERMS HEREOF SHALL BE EFFECTIVE UNLESS IN WRITING,
SIGNED BY ALL PARTIES HERETO.

12.             THIS GUARANTY SHALL INURE TO THE BENEFIT OF LENDER AND ANY
SUBSEQUENT HOLDER OF THE LOAN DOCUMENTS AND SHALL BIND PRINCIPAL AND ITS
RESPECTIVE HEIRS, SUCCESSORS AND ASSIGNS.

13.             THIS GUARANTY SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK.

14.             SUBMISSION TO JURISDICTION.  WITH RESPECT TO ANY SUIT, ACTION OR
PROCEEDINGS RELATING TO THIS GUARANTY (EACH, A “PROCEEDING”), GUARANTORS
IRREVOCABLY (A) SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY STATE COURT
SITTING IN THE ISLAND AND COUNTY OF MAUI, HAWAII, FEDERAL COURT SITTING IN THE
STATE OF HAWAII, OR STATE OR FEDERAL COURT SITTING IN NEW YORK COUNTY, NEW YORK,
AND (B) WAIVE ANY OBJECTION WHICH THEY MAY HAVE AT ANY TIME TO THE LAYING OF
VENUE OF ANY PROCEEDING BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY
PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER WAIVE THE RIGHT
TO OBJECT, WITH RESPECT TO SUCH PROCEEDING, THAT SUCH COURT DOES NOT HAVE
JURISDICTION OVER SUCH PARTY.  NOTHING IN THIS GUARANTY SHALL PRECLUDE LENDER
FROM BRINGING A PROCEEDING IN ANY OTHER JURISDICTION NOR WILL THE BRINGING OF A
PROCEEDING IN ANY ONE OR MORE JURISDICTIONS PRECLUDE THE BRINGING OF A
PROCEEDING IN ANY OTHER JURISDICTION.  GUARANTORS FURTHER AGREE AND CONSENT
THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER
APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY PROCEEDING IN ANY STATE COURT
SITTING IN THE ISLAND AND COUNTY OF MAUI, HAWAII, FEDERAL COURT SITTING IN THE
STATE OF HAWAII, OR STATE OR FEDERAL COURT

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SITTING IN NEW YORK COUNTY, NEW YORK,  MAY BE MADE BY CERTIFIED OR REGISTERED
MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO GUARANTORS AT THE ADDRESSES
INDICATED ABOVE, AND SERVICE SO MADE SHALL BE COMPLETE UPON RECEIPT; EXCEPT THAT
IF GUARANTORS SHALL REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED COMPLETE
FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.

 

15.           [Intentionally Deleted].

 

16.           PROCESS IN ANY SUIT, ACTION OR PROCEEDING OF THE NATURE REFERRED
TO IN SECTION 14 HEREOF MAY BE SERVED: (A) BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO PRINCIPAL AT THE ADDRESS SET FORTH ABOVE OR TO SUCH OTHER
ADDRESS OF WHICH PRINCIPAL SHALL HAVE GIVEN LENDER WRITTEN NOTICE; OR (B) IF
PRINCIPAL SHALL NOT HAVE MADE AN APPEARANCE WITHIN TWENTY ONE (21) DAYS AFTER
SERVICE IN ACCORDANCE WITH CLAUSE (A) OF THIS SECTION, BY HAND DELIVERY TO THE
AGENT IDENTIFIED IN SECTION 15 HEREOF, OR SUCH SUCCESSOR AGENT AS SHALL HAVE
BEEN IDENTIFIED IN ACCORDANCE WITH SECTION 15 HEREOF.  NOTHING IN THIS SECTION
SHALL AFFECT THE LENDER’S RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW,
OR LIMIT LENDER’S RIGHT TO BRING PROCEEDINGS AGAINST PRINCIPAL IN THE COURTS OF
ANY OTHER JURISDICTION.

17.           IF PRINCIPAL SHALL ADVANCE OR BECOME OBLIGATED TO PAY ANY SUMS IN
RESPECT OF THE RECOURSE OBLIGATIONS AS PROVIDED HEREIN, OR IF FOR ANY REASON
WHATSOEVER BORROWER OR ANY SUBSEQUENT OWNER OF THE REAL PROPERTY IS NOW OR SHALL
HEREAFTER BECOME INDEBTED TO PRINCIPAL, PRINCIPAL AGREES THAT THE AMOUNT OF SUCH
SUMS AND OF SUCH INDEBTEDNESS AND ALL INTEREST THEREON SHALL AT ALL TIMES BE
SUBORDINATE AS TO LIEN, TIME OF PAYMENT AND IN ALL OTHER RESPECTS TO ALL SUMS,
INCLUDING PRINCIPAL AND INTEREST AND OTHER AMOUNTS, AT ANY TIME OWING TO LENDER
UNDER THE LOAN DOCUMENTS.  FOR SO LONG AS THIS AGREEMENT SHALL REMAIN IN FORCE
AND EFFECT, PRINCIPAL SHALL NOT EXERCISE ANY SUCH RIGHT OF SUBROGATION IN OR
UNDER THE LOAN DOCUMENTS, OR ANY RIGHT TO PARTICIPATE IN ANY WAY THEREIN, OR IN
THE RIGHT, TITLE OR INTEREST OF LENDER IN OR TO THE REAL PROPERTY.

18.           NON-WAIVER.  NEITHER FAILURE NOR DELAY ON LENDER’S PART IN
INSISTING UPON STRICT PERFORMANCE OF ANY TERM, CONDITION, COVENANT OR AGREEMENT
OR EXERCISING ANY RIGHT, POWER, REMEDY OR PRIVILEGE HEREUNDER, SHALL OPERATE AS
OR CONSTITUTE A WAIVER THEREOF, NOR SHALL A SINGLE OR PARTIAL EXERCISE THEREOF
PRECLUDE ANY OTHER FUTURE EXERCISE, OR THE EXERCISE OF ANY OTHER RIGHT, POWER,
REMEDY OR PRIVILEGE.  BY WAY OF EXAMPLE, AND NOT BY WAY OF LIMITATION, BY
ACCEPTING PAYMENT AFTER THE DUE DATE OF ANY AMOUNT PAYABLE UNDER THIS GUARANTY,
LENDER SHALL NOT BE DEEMED TO HAVE WAIVED ANY RIGHT EITHER TO REQUIRE PROMPT
PAYMENT WHEN DUE OF ALL OTHER AMOUNTS DUE UNDER THIS GUARANTY, OR TO DECLARE A
DEFAULT FOR FAILURE TO EFFECT PROMPT PAYMENT OF ANY SUCH OTHER AMOUNT.

19.           NO CONSENT BY BORROWER SHALL BE REQUIRED FOR ANY ASSIGNMENT OR
REASSIGNMENT OF LENDER’S RIGHTS UNDER THIS GUARANTY TO ANY ASSIGNEE OF LENDER’S
INTEREST IN THE NOTE OR ANY PART THEREOF.  ALL REFERENCES TO “LENDER” HEREUNDER
SHALL BE DEEMED TO INCLUDE SUCH SUCCESSORS AND ASSIGNS OF LENDER.

20.           WHEREVER POSSIBLE, EACH PROVISION OF THIS GUARANTY SHALL BE
INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAWS,
BUT IF ANY PROVISION OF THIS GUARANTY SHALL BE PROHIBITED BY OR INVALID UNDER
APPLICABLE LAW, SUCH PROVISION SHALL BE

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ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Guaranty.

 

21.           TO THE FULLEST EXTENT PERMITTED BY LAW, GUARANTORS HEREBY
IRREVOCABLY WAIVE TRIAL BY JURY IN ANY ACTION, COUNTERCLAIM OR JUDICIAL
PROCEEDING BROUGHT BY BORROWER OR LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR IN CONNECTION WITH THIS
INSTRUMENT, THE LOAN, THE LOAN DOCUMENTS, AND ANY ACTS OR OMISSIONS OF
GUARANTORS IN CONNECTION THEREWITH.

 

22.           This Guaranty may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same guaranty.

 

[The next page is the signature page]

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IN WITNESS WHEREOF, Principal has duly executed and delivered this Guaranty as
of the date of this Guaranty.

 

 

MAUI LAND & PINEAPPLE COMPANY, INC.,

 

a Hawaii corporation

 

 

 

 

By:

/S/ ROBERT WEBBER

 

 

Name:

R. WEBBER

 

 

Title:

       CFO

 

 

 

 

 

THE RITZ-CARLTON DEVELOPMENT
COMPANY, INC., a Delaware corporation

 

 

 

By:

/S/ WILLIAM T. PHILLIPS

 

 

 

 

 

Name:

WILLIAM T. PHILLIPS

 

 

 

 

 

Title:

VICE-PRESIDENT

 

 

 

 

 

EXCLUSIVE RESORTS DEVELOPMENT
COMPANY, LLC, a Delaware limited liability
company

 

 

 

By:

/S/ TODD HARRIS

 

 

 

 

 

Name:

TODD HARRIS

 

 

 

 

 

Title:

SVP Member Services

 

 

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