EFFECT OF REDUCING THE LIABILITY OF
PRINCIPAL HEREUNDER.
IT IS FURTHER UNDERSTOOD THAT IF BORROWER SHALL HAVE TAKEN
ADVANTAGE OF, OR BE SUBJECT TO THE PROTECTION OF, ANY PROVISION OF THE
BANKRUPTCY CODE, THE EFFECT OF WHICH IS TO PREVENT OR DELAY LENDER FROM TAKING
ANY REMEDIAL ACTION AGAINST BORROWER, INCLUDING THE EXERCISE OF ANY OPTION
LENDER HAS TO DECLARE THE DEBT DUE AND PAYABLE ON THE HAPPENING OF ANY DEFAULT
OR EVENT BY WHICH, UNDER THE TERMS OF THE LOAN DOCUMENTS, THE DEBT SHALL BECOME
DUE AND PAYABLE, LENDER MAY, AS AGAINST PRINCIPAL, NEVERTHELESS, DECLARE THE
Recourse Obligations due and payable and enforce any and all of its rights and
remedies provided for herein.
4.
PRINCIPAL FURTHER AGREES: (A) THAT THIS GUARANTY SHALL REMAIN AND
CONTINUE IN FULL FORCE AND EFFECT, NOTWITHSTANDING ANY MODIFICATION, EXTENSION
OR RENEWAL OF THE NOTE OR ANY OF THE OTHER LOAN DOCUMENTS; (B) THAT LENDER SHALL
NOT BE UNDER A DUTY TO PROTECT, SECURE OR INSURE ANY SECURITY OR LIEN PROVIDED
BY THE LOAN DOCUMENTS OR OTHER COLLATERAL FOR THE LOAN; AND (C) THAT OTHER
INDULGENCE OR FORBEARANCE MAY BE GRANTED UNDER ANY OR ALL OF THE LOAN DOCUMENTS,
WITHOUT NOTICE TO OR FURTHER CONSENT OF PRINCIPAL.
THIS GUARANTY SHALL
TERMINATE UPON THE COMPLETE PAYMENT OF THE DEBT AND FULFILLMENT OF ANY
OUTSTANDING OBLIGATIONS OF PRINCIPALS UNDER THIS GUARANTY.
5.
EXCEPT AS MAY BE PERMITTED UNDER THE LOAN AGREEMENT, PRINCIPAL
WILL NOT CONVEY, TRANSFER OR ASSIGN, DIRECTLY OR INDIRECTLY, ANY PORTION OF THE
MORTGAGED PROPERTY OF ANY NATURE, WHETHER REAL, PERSONAL OR MIXED, TANGIBLE OR
INTANGIBLE, OR ANY INTEREST THEREIN, FOR LESS THAN FULL AND FAIR CONSIDERATION.
NOTHING HEREIN SHALL BE CONSTRUED TO PROHIBIT ANY DIVIDEND OR DISTRIBUTION OF
EARNINGS IN THE ORDINARY COURSE OF PRINCIPAL'S BUSINESS.
6.
ANY INDEBTEDNESS OF BORROWER TO PRINCIPAL NOW OR HEREAFTER
EXISTING (INCLUDING, WITHOUT LIMITATION, ANY RIGHTS OF SUBROGATION PRINCIPAL MAY
HAVE AS A RESULT OF ANY PAYMENT BY PRINCIPAL UNDER THIS GUARANTY), TOGETHER WITH
ANY INTEREST THEREON, SHALL BE, AND SUCH INDEBTEDNESS IS HEREBY, DEFERRED,
POSTPONED AND SUBORDINATED TO THE PRIOR PAYMENT IN FULL OF THE DEBT.
UNTIL
PAYMENT IN FULL OF THE DEBT (AND INCLUDING INTEREST ACCRUING ON THE NOTE AFTER
THE COMMENCEMENT OF A PROCEEDING BY OR AGAINST BORROWER UNDER THE BANKRUPTCY
CODE WHICH INTEREST THE PARTIES AGREE SHALL REMAIN A CLAIM THAT IS PRIOR AND
SUPERIOR TO ANY CLAIM OF PRINCIPAL NOTWITHSTANDING ANY CONTRARY PRACTICE, CUSTOM
OR RULING IN CASES UNDER THE BANKRUPTCY CODE GENERALLY), PRINCIPAL AGREES NOT TO
ACCEPT ANY PAYMENT OR SATISFACTION OF ANY KIND OF INDEBTEDNESS OF BORROWER TO
PRINCIPAL, (EXCEPT UNDER THE MARKETING AGREEMENTS, THAT CERTAIN TECHNICAL
SERVICES AGREEMENT DATED SEPTEMBER 1, 2004, BETWEEN BORROWER AND RITZ-CARLTON,
THAT CERTAIN PROJECT DEVELOPMENT MANAGEMENT AGREEMENT DATED OCTOBER 1, 2004,
BETWEEN BORROWER AND RITZ-CARLTON AND THAT CERTAIN ENTITLEMENT SERVICES LETTER
AGREEMENT BETWEEN BORROWER AND KAPALUA LAND COMPANY DATED AUGUST 16, 2005).
FURTHER, IF PRINCIPAL SHALL NOW OR AT ANY TIME IN THE FUTURE COMPRISE MORE THAN
ONE PERSON, FIRM OR CORPORATION, PRINCIPAL