EXHIBIT 4.24(b)


 


GUARANTY AGREEMENT


 


THIS GUARANTY AGREEMENT
(the “Guaranty”) is executed as of December 17,
2004, by GS EMERGING MARKET REAL ESTATE FUND, L.P.,
a Cayman Island exempted limited partnership, having an address at c/o Goldman
Sachs, 85 Broad Street, New York, New York 
10004 (“Goldman”) and KERZNER
INTERNATIONAL LIMITED, a Bahamian corporation, having an address at c/o
Kerzner International North America, 1000 South Pine Island Road, Plantation,
Florida  33324-3906 (“Kerzner; together with Goldman, “Guarantor”),
in favor of LASALLE BANK NATIONAL ASSOCIATION,
a national banking association, having an address at 35 S. LaSalle Street,
Suite 1625, Chicago, Illinois 60603, in its capacity as note trustee and
collateral agent (“Trustee”), for
the benefit of Noteholders (as herein defined).


 


W I  T  N  E
S  S  E  T  H :


 


WHEREAS, pursuant to certain promissory notes,
dated of even date herewith (as the same may be amended, restated, replaced,
supplemented, or otherwise modified from time to time, the “Notes”), executed by KERZNER PALMILLA BEACH PARTNERS, S. de
R.L. de C.V., KERZNER PALMILLA HOTEL PARTNERS, S. de R.L. de C.V., KERZNER
SERVICIOS HOTELEROS, S. de R.L. de C.V., KERZNER COMPANIA DE SERVICIOS, S. de
R.L. de C.V. and KERZNER PALMILLA GOLF PARTNERS, S. de R.L. de C.V., each a
limited liability company with variable capital (sociedad de
responsabilidad limitada de capital variable) (collectively, “Issuers”) and issued pursuant to that certain Note Indenture
dated as of the date hereof between Issuers and Trustee (as the same may be
amended, restated, replaced, supplemented, or otherwise modified from time to
time, the “Indenture”), Issuers have become
indebted to Noteholders (as defined in the Indenture) in the original principal
amount of One Hundred Ten Million and No/100 Dollars ($110,000,000) (such
indebtedness, the “Note Indebtedness”),
which Note Indebtedness is secured by that certain Amended and Restated Trust Agreement
dated as of the date hereof (as the same may be amended, restated, replaced, supplemented,
or otherwise modified from time to time, the “Security
Trust Agreement”) and further evidenced, secured or governed by
other instruments and documents executed in connection with the issuance of the
Notes (together with the Notes, the Indenture and the Security Trust Agreement,
collectively, the “Financing Documents”);


 


WHEREAS, Initial Noteholder (as defined in the
Indenture) is not willing to purchase the Notes or otherwise extend credit to Issuers
unless Guarantor unconditionally guarantees payment and performance to Trustee
for the benefit of Noteholders of the Guaranteed Obligations (as herein
defined);


 


WHEREAS, Guarantor is the owner of a direct or
indirect interest in Issuers, and Guarantor will directly benefit from the
issuance of the Notes, it being understood that the proceeds of the Notes shall
be advanced to Issuers; and


 


WHEREAS, Guarantor has been provided copies of,
and has reviewed, each of the Financing Documents.


 





















 


NOW, THEREFORE, as an inducement to Trustee to perform
its obligations under the Indenture and for Initial Noteholder to purchase the Notes,
and for other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, the parties do hereby agree as
follows:


 


ARTICLE
I



NATURE AND SCOPE OF GUARANTY


 


1.1  Guaranty of
Obligation.  Guarantor hereby irrevocably and unconditionally
guarantees to Trustee for the benefit of Noteholders the payment and
performance of the Guaranteed Obligations as and when the same shall be due and
payable, whether by lapse of time, by acceleration of maturity or
otherwise.  Guarantor hereby irrevocably
and unconditionally covenants and agrees that it is liable for the Guaranteed
Obligations as a primary obligor.


 


1.2  Definition of
Guaranteed Obligations.  (a)  As used herein, the term “Guaranteed Obligations” means the obligations and
liabilities of Issuers to Trustee or Noteholders for any loss, damage, cost,
expense, liability, claim and any other obligation incurred by Trustee or Noteholders
(including attorneys’ fees and costs reasonably incurred) arising out of or in
connection with the matters described in Section 9.03 of the Indenture (other
than Section 9.03(a)(ix)), a copy of which Indenture is attached hereto as
Exhibit A.  The provisions of Section 9.03
are hereby incorporated into this Guaranty to the same extent and with the same
force as if fully set forth herein.


 


(b)  Notwithstanding anything to the
contrary contained herein or in any other Financing Document, with respect to
Guarantor’s obligations and liabilities for the Guaranteed Obligations, the
parties hereby agree (and by accepting this Guaranty, Trustee on behalf of
Noteholders hereby agrees) that all of the Guaranteed Obligations of Guarantor
under this Guaranty are recourse obligations of Guarantor, but not of any
direct or indirect member, shareholder, partner, principal, affiliate,
employee, officer, director, agent or representative of Guarantor (other than any
Issuer) and none of such direct or indirect member, shareholder, partner,
principal, affiliate, employee, officer, director, agent or representative of
Guarantor (other than any Issuer) shall have any liability in its personal or
individual capacity, but instead, all parties shall look solely to the property
and the assets of Guarantor for satisfaction of any Guaranteed Obligations of
any nature required to be paid by Guarantor to Trustee for the benefit of
Noteholders under this Guaranty.


 


1.3  Nature of
Guaranty.  This Guaranty is an irrevocable, absolute, continuing guaranty of
payment and performance and not a guaranty of collection.  This Guaranty may not be revoked by Guarantor
and shall continue to be effective with respect to any Guaranteed Obligations
arising or created after any attempted revocation by Guarantor.  The fact that at any time or from time to
time the Guaranteed Obligations may be increased or reduced shall not release
or discharge the obligation of Guarantor to Trustee with respect to the
Guaranteed Obligations.  This Guaranty
may be enforced by Trustee for the benefit of Noteholders and shall not be
discharged by the assignment or negotiation of all or part of the Notes.


 


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1.4  Guaranteed
Obligations Not Reduced by Offset.  The Guaranteed Obligations and the
liabilities and obligations of Guarantor to Trustee hereunder, shall not be
reduced, discharged or released because or by reason of any existing or future
offset, claim or defense of Issuers, or any other party, against Trustee or any
Noteholder or against payment of the Guaranteed Obligations, whether such
offset, claim or defense arises in connection with the Guaranteed Obligations
(or the transactions creating the Guaranteed Obligations) or otherwise.


 


1.5  Payment By
Guarantor.  If all or any part of the Guaranteed Obligations shall
not be punctually paid when due, whether at demand, maturity, acceleration or
otherwise, Guarantor shall, immediately upon demand by Trustee on behalf of
Noteholders, and without presentment, protest, notice of protest, notice of
non-payment, notice of intention to accelerate the maturity, notice of
acceleration of the maturity, or any other notice whatsoever, pay in lawful
money of the United States of America, the amount due on the Guaranteed
Obligations to Trustee for the benefit of Noteholders at Trustee’s address as
set forth herein.  Such demand(s) may be
made at any time coincident with or after the time payment of all or part of
the Guaranteed Obligations is due, and may be made from time to time with
respect to the same or different items of Guaranteed Obligations.  Such demand shall be deemed made, given and
received in accordance with the notice provisions hereof.


 


1.6  No Duty To
Pursue Others.  It shall not be necessary for Trustee or any
Noteholder (and Guarantor hereby waives any rights which Guarantor may have to
require Trustee or any Noteholder), in order to enforce the obligations of
Guarantor hereunder, first to (a) institute suit or exhaust its remedies
against Issuers or others liable on the Note Indebtedness or the Guaranteed
Obligations or any other Person, (b) enforce Trustee’s rights for the benefit
of Noteholders against any collateral which shall ever have been given to
secure the Note Indebtedness, (c) enforce Trustee’s rights for the benefit of
Noteholders against any other guarantors of the Guaranteed Obligations, (d)
join Issuers or any other Person liable on the Guaranteed Obligations in any
action seeking to enforce this Guaranty, (e) exhaust any remedies available to Trustee
for the benefit of Noteholders against any collateral which shall ever have
been given to secure the Note Indebtedness, or (f) resort to any other means of
obtaining payment of the Guaranteed Obligations.  Neither Trustee nor any Noteholder shall be
required to mitigate damages or take any other action to reduce, collect or
enforce the Guaranteed Obligations.


 


1.7  Waivers.  Guarantor agrees to the provisions of the
Financing Documents, and hereby waives notice of (a) any loan or advances made
by, or on behalf of, any Noteholder to Issuers, (b) acceptance of this
Guaranty, (c) any amendment or extension of the Notes, the Indenture or of any
other Financing Documents, (d) the execution and delivery by Issuers and Trustee
of any loan or credit agreement or of Issuers’ execution and delivery of any
promissory notes or other documents arising under the Financing Documents or in
connection with the Property, (e) the occurrence of any breach by Issuers or an
Event of Default, (f) any Noteholder’s transfer or disposition of the Guaranteed
Obligations or any part thereof, (g) sale or foreclosure (or posting or
advertising for sale or foreclosure) of any collateral for the Guaranteed
Obligations, (h) protest, proof of non-payment or default by Issuers, and (i)
any other action at any time taken or omitted by Trustee or any Noteholder,
and, generally, all demands and notices of every kind in connection with this
Guaranty, the Financing Documents, any documents or


 


3





















 


agreements evidencing, securing or relating to any of the Guaranteed
Obligations, except as specifically provided for herein.


 


1.8  Payment of
Expenses.  In the event that Guarantor should breach or fail to timely perform any
provisions of this Guaranty, Guarantor shall, promptly after written demand by Trustee,
pay Trustee for the benefit of Noteholders all reasonable costs and expenses
(including court costs and attorneys’ fees) incurred by Trustee on behalf of
Noteholders in the enforcement hereof or the preservation of Trustee’s rights
hereunder.  The covenant contained in
this Section 1.8 shall survive the payment and performance of the
Guaranteed Obligations.


 


1.9  Intentionally
Omitted.


 


1.10  Effect of
Bankruptcy.  In the event that, pursuant to any insolvency,
bankruptcy, reorganization, receivership or other debtor relief law, or any
judgment, order or decision thereunder, Trustee or any Noteholder must rescind
or restore any payment, or any part thereof, received by Trustee or any
Noteholder in satisfaction of the Guaranteed Obligations, as set forth herein,
any prior release or discharge from the terms of this Guaranty given to
Guarantor by Trustee shall be without effect, and this Guaranty shall remain in
full force and effect. It is the intention of Issuers and Guarantor that
Guarantor’s obligations hereunder shall not be discharged except by Guarantor’s
performance of such obligations and then only to the extent of such
performance.


 


1.11  Intentionally
Omitted.


 


1.12  Waiver of
Subrogation, Reimbursement and Contribution.  Notwithstanding anything to the contrary
contained in this Guaranty, Guarantor hereby unconditionally and irrevocably
waives, releases and abrogates, but only for so long as the Debt shall remain
outstanding, any and all rights it may now or hereafter have under any
agreement, at law or in equity (including, without limitation, any law
subrogating the Guarantor to the rights of Trustee or any Noteholder), to
assert any claim against or seek contribution, indemnification or any other
form of reimbursement from Issuers or any other Person liable for payment of
any or all of the Guaranteed Obligations for any payment made by Guarantor
under or in connection with this Guaranty or otherwise.  Notwithstanding anything contained herein to
the contrary, nothing contained herein shall prohibit or be deemed to prohibit
the execution and delivery by Goldman and Kerzner of a Contribution Agreement
between themselves, and the performance of the terms therein, relating to their
respective payment and reimbursement obligations arising out of or related to
this Guaranty; provided that neither the foregoing provisions of this
sentence nor the execution, delivery or performance by Goldman or Kerzner of
such Contribution Agreement shall in any way affect, limit or otherwise modify
(or be deemed to affect, limit or otherwise modify) the rights of Trustee or
any Noteholder hereunder.


 


1.13  Issuers.  The term “Issuer”
as used herein shall include any new or successor corporation, association,
partnership (general or limited), joint venture, trust or other individual or
organization formed as a result of any merger, reorganization, sale, transfer,
devise, gift or bequest of any Issuer or any interest in any Issuer.


 


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ARTICLE
II



EVENTS AND CIRCUMSTANCES NOT REDUCING

OR DISCHARGING GUARANTOR’S OBLIGATIONS


 


To the extent permitted by law, Guarantor hereby
consents and agrees to each of the following, and agrees that Guarantor’s
obligations under this Guaranty shall not be released, diminished, impaired,
reduced or adversely affected by any of the following, and waives any common
law, equitable, statutory or other rights (including without limitation rights
to notice) which Guarantor might otherwise have as a result of or in connection
with any of the following:


 


2.1  Modifications.  Any renewal, extension,
increase, modification, alteration or rearrangement of all or any part of the
Guaranteed Obligations, the Notes, the Indenture, the other Financing Documents,
or any other document, instrument, contract or understanding between Issuers
and Trustee on behalf of Noteholders, or any other Person, pertaining to the
Guaranteed Obligations or any failure of Trustee to notify Guarantor of any
such action.


 


2.2  Adjustment.  Any adjustment, indulgence, forbearance
or compromise that might be granted or given by Trustee on  behalf of Noteholders to any Issuer or any guarantor
or indemnitor.


 


2.3  Condition of Issuers
or Guarantor.  The
insolvency, bankruptcy, arrangement, adjustment, composition, liquidation,
disability, dissolution or lack of power of any Issuer, Guarantor or any other Person
at any time liable for the payment of all or part of the Guaranteed
Obligations; or any dissolution of any Issuer or Guarantor, or any sale, lease
or transfer of any or all of the assets of any Issuer or Guarantor, or any
changes in the shareholders, partners or members of any Issuer or Guarantor; or
any reorganization of any Issuer or Guarantor.


 


2.4  Invalidity of
Guaranteed Obligations.  The invalidity, illegality or unenforceability of all
or any part of the Guaranteed Obligations, or any document or agreement
executed in connection with the Guaranteed Obligations, for any reason
whatsoever, including without limitation the fact that (a) the Guaranteed
Obligations, or any part thereof, exceeds the amount permitted by law, (b) the
act of creating the Guaranteed Obligations or any part thereof is ultra  vires,
(c) the officers or representatives executing the Notes, the Indenture or the
other Financing Documents or otherwise creating the Guaranteed Obligations
acted in excess of their authority, (d) the Guaranteed Obligations violate
applicable usury laws, (e) the Issuers have valid defenses, claims or offsets
(whether at law, in equity or by agreement) which render the Guaranteed
Obligations wholly or partially uncollectible from Issuers (except for payment
and performance of the Guaranteed Obligations, and then only to the extent of
such payment and performance by Issuers), (f) the creation, performance or
repayment of the Guaranteed Obligations (or the execution, delivery and
performance of any document or instrument representing part of the Guaranteed
Obligations or executed in connection with the Guaranteed Obligations, or given
to secure the repayment of the Guaranteed Obligations) is illegal,
uncollectible or unenforceable, or (g) the Notes, the Indenture or any of the
other Financing Documents have been forged or otherwise are irregular or not
genuine or authentic, it being


 


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agreed that Guarantor shall remain liable hereon regardless of whether Issuers
or any other Person be found not liable on the Guaranteed Obligations or any
part thereof for any reason.


 


2.5  Release of
Obligors.  Any full or partial release of the liability of Issuers on the
Guaranteed Obligations, or any part thereof, or of any co-guarantors, or any
other Person now or hereafter liable, whether directly or indirectly, jointly,
severally, or jointly and severally, to pay, perform, guarantee or assure the
payment of the Guaranteed Obligations, or any part thereof, it being
recognized, acknowledged and agreed by Guarantor that Guarantor may be required
to pay the Guaranteed Obligations in full without assistance or support of any
other Person, and Guarantor has not been induced to enter into this Guaranty on
the basis of a contemplation, belief, understanding or agreement that other
Persons will be liable to pay or perform the Guaranteed Obligations, or that Trustee
will look to other Persons to pay or perform the Guaranteed Obligations.


 


2.6  Other
Collateral.  The taking or accepting of any other security,
collateral or guaranty, or other assurance of payment, for all or any part of
the Guaranteed Obligations.


 


2.7  Intentionally
Omitted.


 


2.8  Release of
Collateral.  Any release, surrender, exchange, subordination,
deterioration, waste, loss or impairment (including without limitation
negligent, willful, unreasonable or unjustifiable impairment) of any
collateral, property or security at any time existing in connection with, or
assuring or securing payment of, all or any part of the Guaranteed Obligations.


 


2.9  Care and
Diligence.  The failure of Trustee, any Noteholder or any other Person
to exercise diligence or reasonable care in the preservation, protection,
enforcement, sale or other handling or treatment of all or any part of such
collateral, property or security, including but not limited to any neglect,
delay, omission, failure or refusal of Trustee or any Noteholder (a) to take or
prosecute any action for the collection of any of the Guaranteed Obligations or
(b) to foreclose, or initiate any action to foreclose, or, once commenced,
prosecute to completion any action to foreclose upon any security therefor, or
(c) to take or prosecute any action in connection with any instrument or
agreement evidencing or securing all or any part of the Guaranteed Obligations.


 


2.10  Unenforceability.  The fact that any collateral, security,
security interest or lien contemplated or intended to be given, created or
granted as security for the repayment of the Guaranteed Obligations, or any
part thereof, shall not be properly perfected or created, or shall prove to be
unenforceable or subordinate to any other security interest or lien, it being recognized
and agreed by Guarantor that Guarantor is not entering into this Guaranty in
reliance on, or in contemplation of the benefits of, the validity,
enforceability, collectibility or value of any of the collateral for the
Guaranteed Obligations.


 


2.11  Offset.  Any existing or future right
of offset, claim or defense of Issuers against Trustee or any other Person, or
against payment of the Guaranteed Obligations, whether such right of offset,
claim or defense arises in connection with the Guaranteed Obligations (or


 


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the transactions creating the Guaranteed Obligations) or otherwise
(except for payment and performance of the Guaranteed Obligations, and then
only to the extent of such payment and performance).


 


2.12  Merger.  The reorganization, merger or
consolidation of any Issuer into or with any other corporation or entity.


 


2.13  Preference.  Any payment by Issuers to Trustee or any
Noteholder is held to constitute a preference under bankruptcy laws, or for any
reason Trustee or any Noteholder is required to refund such payment or pay such
amount to Issuers or other Person.


 


2.14  Other Actions
Taken or Omitted.  Any other action taken or omitted to be taken with
respect to the Financing Documents, the Guaranteed Obligations, or the security
and collateral therefor, whether or not such action or omission prejudices
Guarantor or increases the likelihood that Guarantor will be required to pay
the Guaranteed Obligations pursuant to the terms hereof, it is the unambiguous
and unequivocal intention of Guarantor that Guarantor shall be obligated to pay
the Guaranteed Obligations when due, notwithstanding any occurrence,
circumstance, event, action, or omission whatsoever, whether contemplated or
uncontemplated, and whether or not otherwise or particularly described herein,
which obligation shall be deemed satisfied only upon the full and final payment
and satisfaction of the Guaranteed Obligations.


 


ARTICLE
III



REPRESENTATIONS AND WARRANTIES


 


To induce Trustee to enter into the Financing Documents
and to induce Initial Noteholder to purchase the Notes, Guarantor represents
and warrants to Trustee as follows:


 


3.1  Benefit.  Guarantor is an affiliate of Issuers,
is the owner of a direct or indirect interest in Issuers, and has received, or
will receive, direct or indirect benefit from the making of this Guaranty with
respect to the Guaranteed Obligations.


 


3.2  Familiarity and
Reliance.  Guarantor
is familiar with, and has independently reviewed books and records regarding,
the financial condition of the Issuers and is familiar with the value of any
and all collateral intended to be created as security for the payment of the Notes
or Guaranteed Obligations; however, Guarantor is not relying on such financial
condition or the collateral as an inducement to enter into this Guaranty.


 


3.3  No
Representation By Trustee.  Neither Trustee, any Noteholder nor any
other Person has made any representation, warranty or statement to Guarantor in
order to induce the Guarantor to execute this Guaranty.


 


3.4  Guarantor’s
Financial Condition.  As of the date hereof, and after giving effect to this
Guaranty and the contingent obligation evidenced hereby, Guarantor is, and will
be, solvent, and has and will have assets which, fairly valued, exceed its
obligations, liabilities (including contingent liabilities) and debts, and has
and will have property and assets sufficient to satisfy and repay its
obligations and liabilities.  Guarantor
hereby represents and


 


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warrants that its Net Worth (hereinafter defined) as September 30, 2004
is $1,097,956,000.  Guarantor agrees
that, except for the payment of employee salaries and benefits and dividends in
the ordinary course, not to voluntary dispose of its assets other than on an
arms-length basis in exchange for fair consideration.  For purposes hereof, “Net Worth”
shall mean the excess of total assets of Guarantor and its subsidiaries at such
time over the total liabilities of Guarantor and its subsidiaries at such time,
in each case as determined on a consolidated basis in accordance with GAAP.


 


3.5  Legality.  The execution, delivery and
performance by Guarantor of this Guaranty and the consummation of the
transactions contemplated hereunder do not, and will not, contravene or
conflict with any applicable law, statute or regulation of any court or
governmental agency or body having jurisdiction over the Guarantor (except for
such violations that would not reasonably be expected to result in a material
adverse effect on the financial condition of Guarantor, any Issuer or the
Property), or constitute a default under, or result in the breach of, any
indenture, mortgage, deed of trust, charge, lien, or any contract, agreement or
other instrument to which Guarantor is a party or which may be applicable to
Guarantor (except for such violations that would not reasonably be expected to
result in a material adverse effect on the financial condition of Guarantor, any
Issuer or the Property).  This Guaranty
is a legal and binding obligation of Guarantor and is enforceable in accordance
with its terms, except as limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other rights and to general equity
principles.


 


3.6  Survival.  All representations and warranties made
by Guarantor herein shall survive the execution hereof.


 


ARTICLE
IV



SUBORDINATION OF CERTAIN INDEBTEDNESS


 


4.1  Subordination
of All Guarantor Claims.  As used herein, the term “Guarantor
Claims” shall mean all debts and liabilities of Issuers to
Guarantor, whether such debts and liabilities now exist or are hereafter
incurred or arise, or whether the obligations of Issuers thereon be direct,
contingent, primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such debts or liabilities be evidenced by note,
contract, open account, or otherwise, and irrespective of the Person in whose
favor such debts or liabilities may, at their inception, have been, or may
hereafter be created, or the manner in which they have been or may hereafter be
acquired by Guarantor.  The Guarantor
Claims shall include without limitation all rights and claims of Guarantor
against Issuers (arising as a result of subrogation or otherwise) as a result
of Guarantor’s payment of all or a portion of the Guaranteed Obligations.  Upon the occurrence of an Event of Default or
Default, Guarantor shall not receive or collect, directly or indirectly, from Issuers
or any other Person any amount upon the Guarantor Claims.


 


4.2  Claims in
Bankruptcy.  In
the event of receivership, bankruptcy, reorganization, arrangement, debtor’s
relief, or other insolvency proceedings involving Guarantor as debtor, Trustee on
behalf of Noteholders shall have the right to prove its claim in any such
proceeding so as to establish its rights hereunder and receive directly from
the receiver, trustee or other court custodian dividends and payments which
would otherwise be payable upon


 


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Guarantor Claims.  Guarantor
hereby assigns such dividends and payments to Trustee for the benefit of
Noteholders.  Should Trustee for the
benefit of Noteholders receive, for application upon the Guaranteed
Obligations, any such dividend or payment which is otherwise payable to
Guarantor, and which, as between Issuers and Guarantor, shall constitute a
credit upon the Guarantor Claims, then upon payment to Trustee for the benefit
of Noteholders in full of the Guaranteed Obligations, Guarantor shall become
subrogated to the rights of Trustee to the extent that such payments to Trustee
on the Guarantor Claims have contributed toward the liquidation of the
Guaranteed Obligations, and such subrogation shall be with respect to that
proportion of the Guaranteed Obligations which would have been unpaid if Trustee
had not received dividends or payments upon the Guarantor Claims.


 


4.3  Payments Held
in Trust.  In
the event that, notwithstanding anything to the contrary in this Guaranty,
Guarantor should receive any funds, payment, claim or distribution which is
prohibited by this Guaranty, Guarantor agrees to hold in trust for Trustee for
the benefit of Noteholders an amount equal to the amount of all funds,
payments, claims or distributions so received, and agrees that it shall have
absolutely no dominion over the amount of such funds, payments, claims or
distributions so received except to pay them promptly to Trustee for the
benefit of Noteholders, and Guarantor covenants promptly to pay the same to Trustee
for the benefit of Noteholders.


 


4.4  Liens
Subordinate.  Guarantor
agrees that any liens, security interests, judgment liens, charges or other
encumbrances upon Issuers’ assets securing payment of the Guarantor Claims
shall be and remain inferior and subordinate to any liens, security interests,
judgment liens, charges or other encumbrances upon Issuers’ assets securing
payment of the Guaranteed Obligations, regardless of whether such encumbrances
in favor of Guarantor or Trustee for the benefit of Noteholders presently exist
or are hereafter created or attach. 
Without the prior written consent of Trustee, Guarantor shall not (a)
exercise or enforce any creditor’s right it may have against Issuers or (b)
foreclose, repossess, sequester or otherwise take steps or institute any action
or proceedings (judicial or otherwise, including without limitation the
commencement of, or joinder in, any liquidation, bankruptcy, rearrangement,
debtor’s relief or insolvency proceeding) to enforce any liens, mortgages,
deeds of trust, security interests, collateral rights, judgments or other
encumbrances on assets of Issuers held by Guarantor.


 


ARTICLE
V



MISCELLANEOUS


 


5.1  Waiver.  No failure to exercise, and no delay in
exercising, on the part of Trustee for the benefit of Noteholders, any right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right.  The rights of Trustee
hereunder shall be in addition to all other rights provided by law.  Subject to the further provisions of Section
5.5, no consent, or any modification or waiver of any provision of, this
Guaranty, nor any consent to departure therefrom, shall be effective unless in
writing and no such consent or waiver shall extend beyond the particular case
and purpose involved.  No notice or
demand given in any case shall constitute a waiver of the right to take other
action in the same, similar or other instances without such notice or demand.


 


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5.2  Intentionally
Omitted.


 


5.3  Notices.  All notices, consents, approvals and
requests required or permitted hereunder or under any other Financing Document
shall be given in writing and shall be effective for all purposes if hand delivered
or sent by (a) certified or registered United States mail, postage
prepaid, return receipt requested or (b) expedited prepaid delivery
service, either commercial or United States Postal Service, with proof of
attempted delivery, and by telecopier (with answer back acknowledged),
addressed as follows (or at such other address and Person as shall be
designated from time to time by any party hereto, as the case may be, in a
notice to the other parties hereto in the manner provided for in this Section
5.3:


 


	
   

  	
  Guarantor:

  	
  c/o Kerzner
  International North America

  1000 South Pine Island
  Road

  Plantation, Florida
  33324-3906

  Attention: John Allison

  Facsimile No. (954)
  809-2346

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
  Goldman Sachs Emerging
  Markets Real Estate Fund

  c/o Goldman Sachs

  85 Broad Street

  New York, New York
  10004

  Attention: Peter
  Weidman

  Facsimile No. (212)
  357-5505

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
  Cravath, Swaine &
  Moore LLP

  825 Eighth Avenue

  New York, New York
  10019-7475

  Attention: Kevin J.
  Grehan, Esq.

  Facsimile No. (212)
  474-3700

  
	
   

  	
   

  	
   

  
	
   

  	
  Trustee:

  	
  LaSalle Bank National
  Association

  135 South LaSalle
  Street, Suite 1625

  Chicago, Illinois 60603

  Attention: Global
  Securitization Trust Services Group

                   Palmilla
  Los Cabos Notes due January 9, 2007

  Facsimile No. [                                          ]

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
  Column Financial, Inc.

  11 Madison Avenue

  New York, New York
  10010

  Attention: Edmund
  Taylor

  Facsimile No. (212)
  325-8106

  



 


10





















 


	
   

  	
  with a copy to:

  	
  Column Financial, Inc.

  11 Madison Avenue

  New York, New York
  10010

  Legal and Compliance
  Department

  Attention: Casey
  McCutcheon, Esq.

  Facsimile No. (212)
  326-8282

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
  Cadwalader, Wickersham
  & Taft LLP

  100 Maiden Lane

  New York, New York
  10038

  Attention: William P.
  McInerney, Esq.

  Facsimile No.
  (212) 504-6666

  



 


A notice shall be deemed to have been given:  in the case of hand delivery, at the time of
delivery; in the case of registered or certified mail, when delivered or the
first attempted delivery on a Business Day; or in the case of expedited prepaid
delivery and telecopy, upon the first attempted delivery on a Business Day; or
in the case of telecopy, upon sender’s receipt of a machine-generated
confirmation of successful transmission after advice by telephone to recipient
that a telecopy notice is forthcoming.


 


5.4  Governing Law.  This Guaranty shall be
governed in accordance with the State of New York and the applicable law of the
United States of America.


 


5.5  Invalid
Provisions.  If
any provision of this Guaranty is held to be illegal, invalid, or unenforceable
under present or future laws effective during the term of this Guaranty, such
provision shall be fully severable and this Guaranty shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part of this Guaranty, and the remaining provisions of this
Guaranty shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance from this
Guaranty, unless such continued effectiveness of this Guaranty, as modified,
would be contrary to the basic understandings and intentions of the parties as
expressed herein.


 


5.6  Amendments.  This Guaranty may be amended
only by an instrument in writing executed by the party or an authorized
representative of the party against whom such amendment is sought to be
enforced.


 


5.7  Parties Bound;
Assignment; Joint and Several.  This Guaranty shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
assigns and legal representatives; provided, however, that Guarantor may not,
without the prior written consent of Trustee, assign any of its rights, powers,
duties or obligations hereunder.  If
Guarantor consists of more than one person or entity, the obligations and
liabilities of each such person or entity shall be joint and several.


 


5.8  Headings.  Section headings are for convenience of
reference only and shall in no way affect the interpretation of this Guaranty.


 


11





















 


5.9  Recitals.  The recital and introductory paragraphs
hereof are a part hereof, form a basis for this Guaranty and shall be
considered prima facie evidence of the facts and
documents referred to therein.


 


5.10  Counterparts.  To facilitate execution, this Guaranty
may be executed in as many counterparts as may be convenient or required.  It shall not be necessary that the signature
of, or on behalf of, each party, or that the signature of all Persons required
to bind any party, appear on each counterpart. 
All counterparts shall collectively constitute a single instrument.  It shall not be necessary in making proof of
this Guaranty to produce or account for more than a single counterpart
containing the respective signatures of, or on behalf of, each of the parties
hereto. Any signature page to any counterpart may be detached from such
counterpart without impairing the legal effect of the signatures thereon and
thereafter attached to another counterpart identical thereto except having
attached to it additional signature pages.


 


5.11  Rights and
Remedies.  If Guarantor becomes liable for any indebtedness owing by Issuers to Trustee
or any Noteholder, by endorsement or otherwise, other than under this Guaranty,
such liability shall not be in any manner impaired or affected hereby and the
rights of Trustee hereunder shall be cumulative of any and all other rights
that Trustee may ever have against Guarantor. 
The exercise by Trustee for the benefit of Noteholders of any right or
remedy hereunder or under any other instrument, or at law or in equity, shall
not preclude the concurrent or subsequent exercise of any other right or
remedy.


 


5.12  Intentionally
Omitted.


 


5.13  Other Defined
Terms.  Any capitalized term utilized herein shall have the meaning as
specified in the Indenture, unless such term is otherwise specifically defined
herein.


 


5.14  Entirety.  THIS
GUARANTY EMBODIES THE FINAL AND ENTIRE AGREEMENT OF GUARANTOR AND TRUSTEE WITH
RESPECT TO GUARANTOR’S GUARANTY OF THE GUARANTEED OBLIGATIONS AND SUPERSEDES
ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS,
WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF.  THIS GUARANTY IS INTENDED BY GUARANTOR AND TRUSTEE
AS A FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY, AND NO COURSE
OF DEALING BETWEEN GUARANTOR AND TRUSTEE, NO COURSE OF PERFORMANCE, NO TRADE
PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE
USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY
AGREEMENT.  THERE ARE NO ORAL AGREEMENTS
BETWEEN GUARANTOR AND TRUSTEE.


 


5.15  Waiver of
Right To Trial By Jury.  EACH PARTY HERETO AND ALL PERSONS
CLAIMING BY, THROUGH OR UNDER SUCH PARTY EACH HEREBY AGREE NOT TO ELECT A TRIAL
BY JURY OF ANY ISSUE TRIABLE OF


 


12





















 


RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THIS GUARANTY, THE NOTES, THE INDENTURE, THE SECURITY TRUST AGREEMENT,
OR THE OTHER FINANCING DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION
ARISING IN CONNECTION THEREWITH.  THIS
WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY EACH
PARTY HERETO AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH
ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE.  EACH PARTY HERETO IS HEREBY AUTHORIZED TO
FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER BY TRUSTEE OR GUARANTOR, AS THE CASE MAY BE.


 


5.16  Reinstatement
in Certain Circumstances.  If at any time any payment of the
principal of or interest under the Notes or any other amount payable by the Issuers
under the Financing Documents is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of any Issuer or
otherwise, the Guarantor’s obligations hereunder with respect to such payment
shall be reinstated as though such payment has been due but not made at such
time.


 


5.17  Cooperation.  Guarantor acknowledges and
agrees that Initial Purchaser (as defined in the Indenture) may assign all of
its rights under this Guaranty, the Notes and the other Financing Documents to
Initial Noteholder on the date hereof. 
Guarantor further acknowledges that Initial Noteholder or its successors
or assigns may (i) sell this Guaranty, the Notes and other Financing
Documents to one or more investors as a whole loan, (ii) participate the
Debt secured in part by this Guaranty to one or more investors,
(iii) deposit this Guaranty, the Notes and other Financing Documents with
a trust, which trust may sell certificates to investors evidencing an ownership
interest in the trust assets, or (iv) otherwise sell the indebtedness
evidenced by the Notes or interest therein to investors (the transactions
referred to in clauses (i) through (iv) are hereinafter each referred to as “Secondary Market
Transaction”).  Guarantor
shall cooperate with Initial Noteholder or its successors or assigns in
effecting any such Secondary Market Transaction consistent with the terms and
provisions of the Securitization Cooperation Agreement (as defined in the
Indenture).  It is understood that the
information provided by Guarantor to Initial Purchaser or Initial Noteholder or
their successors or assigns may ultimately be incorporated into the offering
documents for the Secondary Market Transaction and thus various investors may
also see some or all of the information; provided that in no event shall
such offering documents include financial information about Goldman other than
a brief statement of the total amount of assets and liabilities of Goldman.


 


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EXECUTED as of the day and year first above
written.


 


	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  GS EMERGING MARKET REAL ESTATE FUND, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  GSEM Advisors, L.L.C., its general partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Peter Weidman

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Peter Weidman

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  KERZNER INTERNATIONAL LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/John R. Allison

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John R. Allison

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President Finance and Chief Financial
  Officer