**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 GoldmanSachs, 85 Broad Street, New York, New York 10004 (“**Goldman**”) and **KERZNERINTERNATIONAL LIMITED**, a Bahamian corporation, having an address at c/oKerzner 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 andcollateral agent (“**Trustee**”), forthe benefit of Noteholders (as herein defined).

 

**W****ITNESSETH :**

 

**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. deR.L. de C.V., KERZNER PALMILLA HOTEL PARTNERS, S. de R.L. de C.V., KERZNERSERVICIOS HOTELEROS, S. de R.L. de C.V., KERZNER COMPANIA DE SERVICIOS, S. deR.L. de C.V. and KERZNER PALMILLA GOLF PARTNERS, S. de R.L. de C.V., each alimited liability company with variable capital (*sociedad deresponsabilidad limitada de capital variable*) (collectively, “**Issuers**”) and issued pursuant to that certain Note Indenturedated as of the date hereof between Issuers and Trustee (as the same may beamended, restated, replaced, supplemented, or otherwise modified from time totime, the “**Indenture**”), Issuers have becomeindebted to Noteholders (as defined in the Indenture) in the original principalamount of One Hundred Ten Million and No/100 Dollars ($110,000,000) (suchindebtedness, the “**Note Indebtedness**”),which Note Indebtedness is secured by that certain Amended and Restated Trust Agreementdated as of the date hereof (as the same may be amended, restated, replaced, supplemented,or otherwise modified from time to time, the “**SecurityTrust Agreement**”) and further evidenced, secured or governed byother instruments and documents executed in connection with the issuance of theNotes (together with the Notes, the Indenture and the Security Trust Agreement,collectively, the “**Financing Documents**”);

 

**WHEREAS**, Initial Noteholder (as defined in theIndenture) is not willing to purchase the Notes or otherwise extend credit to Issuersunless Guarantor unconditionally guarantees payment and performance to Trusteefor the benefit of Noteholders of the Guaranteed Obligations (as hereindefined);

 

**WHEREAS**, Guarantor is the owner of a direct orindirect interest in Issuers, and Guarantor will directly benefit from theissuance of the Notes, it being understood that the proceeds of the Notes shallbe 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 performits obligations under the Indenture and for Initial Noteholder to purchase the Notes,and for other good and valuable consideration, the receipt and legalsufficiency of which are hereby acknowledged, the parties do hereby agree asfollows:

 

**ARTICLEINATURE AND SCOPE OF GUARANTY**

 

**1.1  Guaranty ofObligation.  **Guarantor hereby irrevocably and unconditionallyguarantees to Trustee for the benefit of Noteholders the payment andperformance of the Guaranteed Obligations as and when the same shall be due andpayable, whether by lapse of time, by acceleration of maturity orotherwise.  Guarantor hereby irrevocablyand unconditionally covenants and agrees that it is liable for the GuaranteedObligations as a primary obligor.

 

**1.2  Definition ofGuaranteed Obligations.  **(a)  As used herein, the term “**Guaranteed Obligations**” means the obligations andliabilities 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 inconnection with the matters described in Section 9.03 of the Indenture (otherthan Section 9.03(a)(ix)), a copy of which Indenture is attached hereto asExhibit A.  The provisions of Section 9.03are hereby incorporated into this Guaranty to the same extent and with the sameforce as if fully set forth herein.

 

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

 

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

 

2

----

 

**1.4  GuaranteedObligations Not Reduced by Offset.  **The Guaranteed Obligations and theliabilities and obligations of Guarantor to Trustee hereunder, shall not bereduced, discharged or released because or by reason of any existing or futureoffset, claim or defense of Issuers, or any other party, against Trustee or anyNoteholder or against payment of the Guaranteed Obligations, whether suchoffset, claim or defense arises in connection with the Guaranteed Obligations(or the transactions creating the Guaranteed Obligations) or otherwise.

 

**1.5  Payment ByGuarantor.  **If all or any part of the Guaranteed Obligations shallnot be punctually paid when due, whether at demand, maturity, acceleration orotherwise, Guarantor shall, immediately upon demand by Trustee on behalf ofNoteholders, and without presentment, protest, notice of protest, notice ofnon-payment, notice of intention to accelerate the maturity, notice ofacceleration of the maturity, or any other notice whatsoever, pay in lawfulmoney of the United States of America, the amount due on the GuaranteedObligations to Trustee for the benefit of Noteholders at Trustee’s address asset forth herein.  Such demand(s) may bemade at any time coincident with or after the time payment of all or part ofthe Guaranteed Obligations is due, and may be made from time to time withrespect to the same or different items of Guaranteed Obligations.  Such demand shall be deemed made, given andreceived in accordance with the notice provisions hereof.

 

**1.6  No Duty ToPursue Others.  **It shall not be necessary for Trustee or anyNoteholder (and Guarantor hereby waives any rights which Guarantor may have torequire Trustee or any Noteholder), in order to enforce the obligations ofGuarantor hereunder, first to (a) institute suit or exhaust its remediesagainst Issuers or others liable on the Note Indebtedness or the GuaranteedObligations or any other Person, (b) enforce Trustee’s rights for the benefitof Noteholders against any collateral which shall ever have been given tosecure the Note Indebtedness, (c) enforce Trustee’s rights for the benefit ofNoteholders against any other guarantors of the Guaranteed Obligations, (d)join Issuers or any other Person liable on the Guaranteed Obligations in anyaction seeking to enforce this Guaranty, (e) exhaust any remedies available to Trusteefor the benefit of Noteholders against any collateral which shall ever havebeen given to secure the Note Indebtedness, or (f) resort to any other means ofobtaining payment of the Guaranteed Obligations.  Neither Trustee nor any Noteholder shall berequired to mitigate damages or take any other action to reduce, collect orenforce the Guaranteed Obligations.

 

**1.7  Waivers.  **Guarantor agrees to the provisions of theFinancing Documents, and hereby waives notice of (a) any loan or advances madeby, or on behalf of, any Noteholder to Issuers, (b) acceptance of thisGuaranty, (c) any amendment or extension of the Notes, the Indenture or of anyother Financing Documents, (d) the execution and delivery by Issuers and Trusteeof any loan or credit agreement or of Issuers’ execution and delivery of anypromissory notes or other documents arising under the Financing Documents or inconnection with the Property, (e) the occurrence of any breach by Issuers or anEvent of Default, (f) any Noteholder’s transfer or disposition of the GuaranteedObligations or any part thereof, (g) sale or foreclosure (or posting oradvertising for sale or foreclosure) of any collateral for the GuaranteedObligations, (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 thisGuaranty, the Financing Documents, any documents or

 

3

----

 

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

 

**1.8  Payment ofExpenses.  **In the event that Guarantor should breach or fail to timely perform anyprovisions 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 ofNoteholders in the enforcement hereof or the preservation of Trustee’s rightshereunder.  The covenant contained inthis Section 1.8 shall survive the payment and performance of theGuaranteed Obligations.

 

**1.9  IntentionallyOmitted.**

 

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

 

**1.11  IntentionallyOmitted.**

 

**1.12  Waiver ofSubrogation, Reimbursement and Contribution.  **Notwithstanding anything to the contrarycontained in this Guaranty, Guarantor hereby unconditionally and irrevocablywaives, releases and abrogates, but only for so long as the Debt shall remainoutstanding, any and all rights it may now or hereafter have under anyagreement, at law or in equity (including, without limitation, any lawsubrogating the Guarantor to the rights of Trustee or any Noteholder), toassert any claim against or seek contribution, indemnification or any otherform of reimbursement from Issuers or any other Person liable for payment ofany or all of the Guaranteed Obligations for any payment made by Guarantorunder or in connection with this Guaranty or otherwise.  Notwithstanding anything contained herein tothe contrary, nothing contained herein shall prohibit or be deemed to prohibitthe execution and delivery by Goldman and Kerzner of a Contribution Agreementbetween themselves, and the performance of the terms therein, relating to theirrespective payment and reimbursement obligations arising out of or related tothis Guaranty; provided that neither the foregoing provisions of thissentence nor the execution, delivery or performance by Goldman or Kerzner ofsuch Contribution Agreement shall in any way affect, limit or otherwise modify(or be deemed to affect, limit or otherwise modify) the rights of Trustee orany 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 ororganization formed as a result of any merger, reorganization, sale, transfer,devise, gift or bequest of any Issuer or any interest in any Issuer.

 

4

----

 

**ARTICLEIIEVENTS AND CIRCUMSTANCES NOT REDUCINGOR DISCHARGING GUARANTOR’S OBLIGATIONS**

 

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

 

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

 

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

 

**2.3  Condition of Issuersor Guarantor.**  Theinsolvency, bankruptcy, arrangement, adjustment, composition, liquidation,disability, dissolution or lack of power of any Issuer, Guarantor or any other Personat any time liable for the payment of all or part of the GuaranteedObligations; or any dissolution of any Issuer or Guarantor, or any sale, leaseor transfer of any or all of the assets of any Issuer or Guarantor, or anychanges in the shareholders, partners or members of any Issuer or Guarantor; orany reorganization of any Issuer or Guarantor.

 

**2.4  Invalidity ofGuaranteed Obligations.  **The invalidity, illegality or unenforceability of allor any part of the Guaranteed Obligations, or any document or agreementexecuted in connection with the Guaranteed Obligations, for any reasonwhatsoever, including without limitation the fact that (a) the GuaranteedObligations, or any part thereof, exceeds the amount permitted by law, (b) theact of creating the Guaranteed Obligations or any part thereof is ultravires,(c) the officers or representatives executing the Notes, the Indenture or theother Financing Documents or otherwise creating the Guaranteed Obligationsacted in excess of their authority, (d) the Guaranteed Obligations violateapplicable usury laws, (e) the Issuers have valid defenses, claims or offsets(whether at law, in equity or by agreement) which render the GuaranteedObligations wholly or partially uncollectible from Issuers (except for paymentand performance of the Guaranteed Obligations, and then only to the extent ofsuch payment and performance by Issuers), (f) the creation, performance orrepayment of the Guaranteed Obligations (or the execution, delivery andperformance of any document or instrument representing part of the GuaranteedObligations or executed in connection with the Guaranteed Obligations, or givento secure the repayment of the Guaranteed Obligations) is illegal,uncollectible or unenforceable, or (g) the Notes, the Indenture or any of theother Financing Documents have been forged or otherwise are irregular or notgenuine or authentic, it being

 

5

----

 

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

 

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

 

**2.6  OtherCollateral.  **The taking or accepting of any other security,collateral or guaranty, or other assurance of payment, for all or any part ofthe Guaranteed Obligations.

 

**2.7  IntentionallyOmitted.**

 

**2.8  Release ofCollateral.  **Any release, surrender, exchange, subordination,deterioration, waste, loss or impairment (including without limitationnegligent, willful, unreasonable or unjustifiable impairment) of anycollateral, property or security at any time existing in connection with, orassuring or securing payment of, all or any part of the Guaranteed Obligations.

 

**2.9  Care andDiligence.  **The failure of Trustee, any Noteholder or any other Personto exercise diligence or reasonable care in the preservation, protection,enforcement, sale or other handling or treatment of all or any part of suchcollateral, property or security, including but not limited to any neglect,delay, omission, failure or refusal of Trustee or any Noteholder (a) to take orprosecute 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 oragreement 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 orgranted as security for the repayment of the Guaranteed Obligations, or anypart thereof, shall not be properly perfected or created, or shall prove to beunenforceable or subordinate to any other security interest or lien, it being recognizedand agreed by Guarantor that Guarantor is not entering into this Guaranty inreliance on, or in contemplation of the benefits of, the validity,enforceability, collectibility or value of any of the collateral for theGuaranteed Obligations.

 

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

 

6

----

 

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

 

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

 

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

 

**2.14  Other ActionsTaken or Omitted.  **Any other action taken or omitted to be taken withrespect to the Financing Documents, the Guaranteed Obligations, or the securityand collateral therefor, whether or not such action or omission prejudicesGuarantor or increases the likelihood that Guarantor will be required to paythe Guaranteed Obligations pursuant to the terms hereof, it is the unambiguousand unequivocal intention of Guarantor that Guarantor shall be obligated to paythe Guaranteed Obligations when due, notwithstanding any occurrence,circumstance, event, action, or omission whatsoever, whether contemplated oruncontemplated, and whether or not otherwise or particularly described herein,which obligation shall be deemed satisfied only upon the full and final paymentand satisfaction of the Guaranteed Obligations.

 

**ARTICLEIIIREPRESENTATIONS AND WARRANTIES**

 

To induce Trustee to enter into the Financing Documentsand to induce Initial Noteholder to purchase the Notes, Guarantor representsand 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, orwill receive, direct or indirect benefit from the making of this Guaranty withrespect to the Guaranteed Obligations.

 

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

 

**3.3  NoRepresentation By Trustee.**  Neither Trustee, any Noteholder nor anyother Person has made any representation, warranty or statement to Guarantor inorder to induce the Guarantor to execute this Guaranty.

 

**3.4  Guarantor’sFinancial Condition.**  As of the date hereof, and after giving effect to thisGuaranty and the contingent obligation evidenced hereby, Guarantor is, and willbe, solvent, and has and will have assets which, fairly valued, exceed itsobligations, liabilities (including contingent liabilities) and debts, and hasand will have property and assets sufficient to satisfy and repay itsobligations and liabilities.  Guarantorhereby represents and

 

7

----

 

warrants that its Net Worth (hereinafter defined) as September 30, 2004is $1,097,956,000.  Guarantor agreesthat, except for the payment of employee salaries and benefits and dividends inthe ordinary course, not to voluntary dispose of its assets other than on anarms-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 suchtime 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 andperformance by Guarantor of this Guaranty and the consummation of thetransactions contemplated hereunder do not, and will not, contravene orconflict with any applicable law, statute or regulation of any court orgovernmental agency or body having jurisdiction over the Guarantor (except forsuch violations that would not reasonably be expected to result in a materialadverse effect on the financial condition of Guarantor, any Issuer or theProperty), or constitute a default under, or result in the breach of, anyindenture, mortgage, deed of trust, charge, lien, or any contract, agreement orother instrument to which Guarantor is a party or which may be applicable toGuarantor (except for such violations that would not reasonably be expected toresult in a material adverse effect on the financial condition of Guarantor, anyIssuer or the Property).  This Guarantyis a legal and binding obligation of Guarantor and is enforceable in accordancewith its terms, except as limited by bankruptcy, insolvency, fraudulenttransfer, reorganization, moratorium or other rights and to general equityprinciples.

 

**3.6  Survival.  **All representations and warranties madeby Guarantor herein shall survive the execution hereof.

 

**ARTICLEIVSUBORDINATION OF CERTAIN INDEBTEDNESS**

 

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

 

**4.2  Claims inBankruptcy.**  Inthe event of receivership, bankruptcy, reorganization, arrangement, debtor’srelief, or other insolvency proceedings involving Guarantor as debtor, Trustee onbehalf of Noteholders shall have the right to prove its claim in any suchproceeding so as to establish its rights hereunder and receive directly fromthe receiver, trustee or other court custodian dividends and payments whichwould otherwise be payable upon

 

8

----

 

Guarantor Claims.  Guarantorhereby assigns such dividends and payments to Trustee for the benefit ofNoteholders.  Should Trustee for thebenefit of Noteholders receive, for application upon the GuaranteedObligations, any such dividend or payment which is otherwise payable toGuarantor, and which, as between Issuers and Guarantor, shall constitute acredit upon the Guarantor Claims, then upon payment to Trustee for the benefitof Noteholders in full of the Guaranteed Obligations, Guarantor shall becomesubrogated to the rights of Trustee to the extent that such payments to Trusteeon the Guarantor Claims have contributed toward the liquidation of theGuaranteed Obligations, and such subrogation shall be with respect to thatproportion of the Guaranteed Obligations which would have been unpaid if Trusteehad not received dividends or payments upon the Guarantor Claims.

 

**4.3  Payments Heldin Trust.**  Inthe event that, notwithstanding anything to the contrary in this Guaranty,Guarantor should receive any funds, payment, claim or distribution which isprohibited by this Guaranty, Guarantor agrees to hold in trust for Trustee forthe benefit of Noteholders an amount equal to the amount of all funds,payments, claims or distributions so received, and agrees that it shall haveabsolutely no dominion over the amount of such funds, payments, claims ordistributions so received except to pay them promptly to Trustee for thebenefit of Noteholders, and Guarantor covenants promptly to pay the same to Trusteefor the benefit of Noteholders.

 

**4.4  LiensSubordinate.**  Guarantoragrees that any liens, security interests, judgment liens, charges or otherencumbrances upon Issuers’ assets securing payment of the Guarantor Claimsshall be and remain inferior and subordinate to any liens, security interests,judgment liens, charges or other encumbrances upon Issuers’ assets securingpayment of the Guaranteed Obligations, regardless of whether such encumbrancesin favor of Guarantor or Trustee for the benefit of Noteholders presently existor 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 actionor proceedings (judicial or otherwise, including without limitation thecommencement 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 otherencumbrances on assets of Issuers held by Guarantor.

 

**ARTICLEVMISCELLANEOUS**

 

**5.1  Waiver.  **No failure to exercise, and no delay inexercising, on the part of Trustee for the benefit of Noteholders, any righthereunder shall operate as a waiver thereof, nor shall any single or partialexercise thereof preclude any other or further exercise thereof or the exerciseof any other right.  The rights of Trusteehereunder shall be in addition to all other rights provided by law.  Subject to the further provisions of Section5.5, no consent, or any modification or waiver of any provision of, thisGuaranty, nor any consent to departure therefrom, shall be effective unless inwriting and no such consent or waiver shall extend beyond the particular caseand purpose involved.  No notice ordemand given in any case shall constitute a waiver of the right to take otheraction in the same, similar or other instances without such notice or demand.

 

9

----

 

**5.2  IntentionallyOmitted.**

 

**5.3  Notices.  **All notices, consents, approvals andrequests required or permitted hereunder or under any other Financing Documentshall be given in writing and shall be effective for all purposes if hand deliveredor sent by (a) certified or registered United States mail, postageprepaid, return receipt requested or (b) expedited prepaid deliveryservice, either commercial or United States Postal Service, with proof ofattempted delivery, and by telecopier (with answer back acknowledged),addressed as follows (or at such other address and Person as shall bedesignated from time to time by any party hereto, as the case may be, in anotice to the other parties hereto in the manner provided for in this Section5.3:

 
|   | 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 ofdelivery; in the case of registered or certified mail, when delivered or thefirst attempted delivery on a Business Day; or in the case of expedited prepaiddelivery and telecopy, upon the first attempted delivery on a Business Day; orin the case of telecopy, upon sender’s receipt of a machine-generatedconfirmation of successful transmission after advice by telephone to recipientthat a telecopy notice is forthcoming.

 

**5.4  Governing Law.**  This Guaranty shall begoverned in accordance with the State of New York and the applicable law of theUnited States of America.

 

**5.5  InvalidProvisions.**  Ifany provision of this Guaranty is held to be illegal, invalid, or unenforceableunder present or future laws effective during the term of this Guaranty, suchprovision shall be fully severable and this Guaranty shall be construed andenforced as if such illegal, invalid or unenforceable provision had nevercomprised a part of this Guaranty, and the remaining provisions of thisGuaranty shall remain in full force and effect and shall not be affected by theillegal, invalid or unenforceable provision or by its severance from thisGuaranty, unless such continued effectiveness of this Guaranty, as modified,would be contrary to the basic understandings and intentions of the parties asexpressed herein.

 

**5.6  Amendments.**  This Guaranty may be amendedonly by an instrument in writing executed by the party or an authorizedrepresentative of the party against whom such amendment is sought to beenforced.

 

**5.7  Parties Bound;Assignment; Joint and Several.**  This Guaranty shall be binding upon andinure 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.  IfGuarantor consists of more than one person or entity, the obligations andliabilities of each such person or entity shall be joint and several.

 

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

 

11

----

 

**5.9  Recitals.  **The recital and introductory paragraphshereof are a part hereof, form a basis for this Guaranty and shall beconsidered *prima facie* evidence of the facts anddocuments referred to therein.

 

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

 

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

 

**5.12  **IntentionallyOmitted.****

 

**5.13  Other DefinedTerms.  **Any capitalized term utilized herein shall have the meaning asspecified in the Indenture, unless such term is otherwise specifically definedherein.

 

**5.14  Entirety.  THISGUARANTY EMBODIES THE FINAL AND ENTIRE AGREEMENT OF GUARANTOR AND TRUSTEE WITHRESPECT TO GUARANTOR’S GUARANTY OF THE GUARANTEED OBLIGATIONS AND SUPERSEDESANY 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 TRUSTEEAS A FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY, AND NO COURSEOF DEALING BETWEEN GUARANTOR AND TRUSTEE, NO COURSE OF PERFORMANCE, NO TRADEPRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORALAGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BEUSED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTYAGREEMENT.  THERE ARE NO ORAL AGREEMENTSBETWEEN GUARANTOR AND TRUSTEE.**

 

**5.15  Waiver ofRight To Trial By Jury.  EACH PARTY HERETO AND ALL PERSONSCLAIMING BY, THROUGH OR UNDER SUCH PARTY EACH HEREBY AGREE NOT TO ELECT A TRIALBY JURY OF ANY ISSUE TRIABLE OF**

 

12

----

 

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

 

**5.16  Reinstatementin Certain Circumstances**.  If at any time any payment of theprincipal of or interest under the Notes or any other amount payable by the Issuersunder the Financing Documents is rescinded or must be otherwise restored orreturned upon the insolvency, bankruptcy or reorganization of any Issuer orotherwise, the Guarantor’s obligations hereunder with respect to such paymentshall be reinstated as though such payment has been due but not made at suchtime.

 

**5.17  Cooperation**.  Guarantor acknowledges andagrees that Initial Purchaser (as defined in the Indenture) may assign all ofits rights under this Guaranty, the Notes and the other Financing Documents toInitial Noteholder on the date hereof. Guarantor further acknowledges that Initial Noteholder or its successorsor assigns may (i) sell this Guaranty, the Notes and other FinancingDocuments to one or more investors as a whole loan, (ii) participate theDebt secured in part by this Guaranty to one or more investors,(iii) deposit this Guaranty, the Notes and other Financing Documents witha trust, which trust may sell certificates to investors evidencing an ownershipinterest in the trust assets, or (iv) otherwise sell the indebtednessevidenced by the Notes or interest therein to investors (the transactionsreferred to in clauses (i) through (iv) are hereinafter each referred to as “**Secondary MarketTransaction**”).  Guarantorshall cooperate with Initial Noteholder or its successors or assigns ineffecting any such Secondary Market Transaction consistent with the terms andprovisions of the Securitization Cooperation Agreement (as defined in theIndenture).  It is understood that theinformation provided by Guarantor to Initial Purchaser or Initial Noteholder ortheir successors or assigns may ultimately be incorporated into the offeringdocuments for the Secondary Market Transaction and thus various investors mayalso see some or all of the information; provided that in no event shallsuch offering documents include financial information about Goldman other thana brief statement of the total amount of assets and liabilities of Goldman.

 

**[NO FURTHER TEXT ON THIS PAGE]**

 

13

----

 

**EXECUTED** as of the day and year first abovewritten.

 
|   | **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 |
|        |                                               |  |  |  |  |

 

----