REDUCING THE LIABILITY OF GUARANTOR 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 GUARANTOR, NEVERTHELESS, DECLARE THE GUARANTEED OBLIGATIONS DUE AND
PAYABLE AND ENFORCE ANY AND ALL OF ITS RIGHTS AND REMEDIES PROVIDED FOR HEREIN.
8.
GUARANTOR 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 AND (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.
THIS
GUARANTY SHALL TERMINATE UPON THE EARLIER TO OCCUR OF (I) COMPLETE PAYMENT OF
THE DEBT, OR (II) ISSUANCE OF A FINAL CERTIFICATE OF OCCUPANCY FOR ALL
COMPONENTS OF THE PROJECT AND PAYMENT OF ALL AMOUNTS THEN DUE AND OWING BY
GUARANTOR UNDER THIS GUARANTY.
9.
ANY INDEBTEDNESS OF BORROWER TO GUARANTOR NOW OR HEREAFTER
EXISTING (INCLUDING, WITHOUT LIMITATION, ANY RIGHTS OF SUBROGATION GUARANTOR MAY
HAVE AS A RESULT OF ANY PAYMENT UNDER THIS GUARANTY), TOGETHER WITH ANY INTEREST
THEREON, SHALL BE, AND SUCH
4
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 GUARANTOR
NOTWITHSTANDING ANY CONTRARY PRACTICE, CUSTOM OR RULING IN CASES UNDER THE
BANKRUPTCY CODE GENERALLY), GUARANTOR AGREES NOT TO ACCEPT ANY PAYMENT OR
SATISFACTION OF ANY KIND OF INDEBTEDNESS OF BORROWER TO GUARANTOR (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 DATED AUGUST
16, 2005 BETWEEN BORROWER AND KAPALUA LAND COMPANY) AND HEREBY ASSIGNS SUCH
INDEBTEDNESS TO LENDER, INCLUDING THE RIGHT TO FILE PROOF OF CLAIM AND TO VOTE
THEREON IN CONNECTION WITH ANY SUCH PROCEEDING UNDER THE BANKRUPTCY CODE,
INCLUDING THE RIGHT TO VOTE ON ANY PLAN OF REORGANIZATION.
10.
GUARANTOR 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.
GUARANTOR WILL UPON WRITTEN DEMAND PAY TO LENDER THE
AMOUNT