Document:

Exhibit
10.4

COMPLETION GUARANTY

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

W I T N E S S E T H:

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

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

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

WHEREAS, as a
material condition to making the Loan, Lender requires that Guarantor, and
Guarantor has agreed, to guaranty the Guaranteed Obligations (hereinafter
defined).

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

1.               Each
Guarantor, severally, hereby absolutely and unconditionally guarantees to
Lender that if Borrower fails to complete the Construction in accordance with
the terms and conditions of the Loan Agreement, or an Event of Default occurs,
Guarantor shall:

(a)           subject to the provisions of Section
3 below, cause to be performed, constructed, erected, installed and fully
completed, free and clear of liens for labor or materials, the Improvements and
all other work contemplated or required to be completed pursuant to the Loan
Documents, all in accordance with the terms and conditions of the Loan
Documents on or before the Completion Date, time being of the essence;

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(b)           fully reimburse Lender for any and
all sums actually expended by Lender to pay or discharge any liens for labor or
materials entered or filed against the Real Property or the Project, including,
without limitation, any and all costs, damages, expenses and reasonable
attorneys’ fees that Lender may suffer or incur by reason thereof;

(c)           fully reimburse Lender for any and
all sums actually expended by Lender for or toward the completion of the
Project (including Hard Costs and Soft Costs) in excess of the undisbursed
principal balance of the Loan in accordance with the terms and conditions of
the Loan Documents as a result of the failure by Borrower or Guarantor to
prosecute the Construction diligently and complete the same on or before the
Completion Date; and

(d)           fully indemnify, defend and hold
Lender harmless from and against any and all actual costs, claims, actions,
causes of action, liabilities, expenses or losses of whatsoever kind or nature,
including, without limitation, reasonable attorney’s fees and court costs,
resulting or arising from any failure by Borrower or Guarantor (1)  to prosecute the construction of the Project
pursuant to the Loan Agreement, or (2) to complete the Project on or before the
Completion Date (collectively, “Losses”).

The
liabilities of Guarantor under this Section shall not be limited by the amount
of the Loan, but shall be determined solely by the cost of completion of the
Construction and the performance of the other undertakings set forth in this
Section.

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

2.               If
Guarantor undertakes to complete the Improvements in accordance with the
provisions of Section 1(a) above, Lender shall make advances to
Guarantor of the undisbursed portion of the Loan allocated to the costs of
Construction, upon Guarantor’s satisfaction of the conditions to the making of
advances set forth in the Loan Agreement (including, without limitation, the
condition requiring that there be no Event of Default by Borrower) and delivery
of a Requisition executed by Borrower and Guarantor to Lender; provided,
however, that as a condition to making an advance to Guarantor, Guarantor shall
not be obligated to cure Events of Default other than (a) monetary Events of
Default (provided that failure to pay any amounts due after an acceleration
shall not be deemed a monetary Event of Default for this purpose), (b) Events
of Default set forth in clauses 20.1(g), (h), (j), (k), (l), and (m) of the
Loan Agreement, (c) due to a Guarantor’s or Borrower’s failure to provide
financial statements in accordance with the Loan Documents and (d) due to
fraud.  Guarantor shall not be obligated
to continue to pursue completion of the Improvements during any period that
Lender has stopped funding advances of the Loan, provided however that in no
event shall Guarantor’s liability under this Guaranty be deemed terminated or
waived until this Guaranty has been terminated in accordance with Section 8
hereof.  All Loan proceeds disbursed by
Lender shall be used only for the Budget Line Items for which such proceeds
were disbursed, and Guarantor shall not have the right to reallocate Budget
Line Items except as expressly permitted under the

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Loan Agreement.  If Guarantor undertakes to complete the
Improvements as provided above, Guarantor shall comply with all of the
requirements of the Loan Documents relating to the Construction, including,
without limitation, the obligation to make any Deficiency Deposit required
under the Loan Agreement.  If Guarantor
fails to comply with such requirements, after the expiration of any applicable
notice and cure periods set forth in the Loan Documents, Lender shall have no
further obligation to disburse to Guarantor the undisbursed portion of the Loan
allocated to the costs of Construction and if Lender then exercises its right
under Section 21.1 of the Loan Agreement to take possession of the Project and
complete the Construction, the provisions of Section 3 of this Guaranty
shall apply.  Any portion of the Loan
disbursed to Guarantor pursuant to this Section shall constitute an advance to
Borrower under the Note and become part of the Debt.

3.               Notwithstanding
the provisions of Section 2 above, if Lender exercises its right under
Section 21.1 of the Loan Agreement to take possession of the Project and
complete the Construction in accordance with the Loan Documents upon any
Guarantor’s failure to promptly comply with the provisions of Section 1(a)
above, subject to any changes to the Plans and Specifications that may be
required by applicable law or are otherwise defective, and to use the
undisbursed portion of the Loan (or, if the Loan has been discharged, an amount
equal to the undisbursed principal balance of the Loan as of the date Lender
takes possession), Guarantor shall not have the right to complete the
Improvements, but shall remain liable for all other obligations under this
Guaranty, including, without limitation, the obligation to make any Deficiency
Deposit.  Nothing contained in this
Section, however, shall require Lender to advance all of the undisbursed
portion of the Loan (or equivalent amount thereof if the Loan has been
discharged) before requiring Guarantor to pay to Lender any Deficiency Deposit
required hereunder.

4.               Guarantor
hereby absolutely and unconditionally guarantees to Lender that if at any time
the Loan is not “In Balance” as required under Section 12.1 of the Loan
Agreement, Guarantor shall pay to Lender the Deficiency Deposit required for
the Loan to be “In Balance” within twenty (20) days after written request for
such Deficiency Deposit has been made by Lender to Guarantor.  Guarantor’s obligation under this Section
4 to pay any Deficiency Deposit required to be paid under the Loan
Agreement shall be an obligation contemporaneous with Borrower’s obligation to
pay same, and Guarantor waives any right to receive notice demanding payment of
any Deficiency Deposit.  Guarantor waives
any right to require or compel Lender, prior to exercising its rights
hereunder, to first proceed against Borrower for payment of any Deficiency
Deposit.  The liabilities of Guarantor
under this Section 4 shall not be limited by the amount of the Loan, but
shall be determined solely by the amount of Deficiency Deposits required to
keep the Loan “In Balance” as determined by Lender in accordance with the Loan
Agreement.

5.               The
payment, compliance and performance obligations guaranteed by Guarantor
pursuant to Sections 1 through 4 above are hereinafter
collectively referred to as the “Guaranteed Obligations”.

6.               Guarantor
hereby waives: (a) notice of acceptance of this Guaranty by Lender and of
presentment, demand, protest, notice of protest and of dishonor, notice of
default and, except for the notices set forth herein, all other notices of
every kind or nature now or

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hereafter provided by agreement
or available at law; (b) the pleading of any statute of limitations as a
defense to the obligations hereunder; and (c) any right to require or compel
Lender, prior to exercising its rights hereunder to first proceed against
Borrower or any security for the Loan, or to pursue any other remedy available
to Lender.  Lender’s failure to exercise,
or delay in exercising, any right or power hereunder shall not operate as a
waiver thereof, nor shall any single or partial exercise by Lender of any
right, remedy or power hereunder preclude any other or future exercise of any
other right, remedy or power.  Guarantor
acknowledges that Lender may seek recovery of the Guaranteed Obligations from
Guarantor with the same force and effect as if Guarantor were primary obligor
under the Note and the other Loan Documents.

7.               Guarantor
further agrees that the validity of this Guaranty and the obligations of
Guarantor hereunder shall in no way be terminated, affected or impaired by
reason of: (a) the assertion by Lender of any rights or remedies which it may
have under or with respect to the Note or the other Loan Documents against any
Person obligated thereunder or against the owner of the Project; (b) any
failure to file or record any of the Loan Documents or to take or perfect any
security intended to be provided thereby; (c) the release or exchange of the
Real Property or any other collateral for the Loan; provided that this Guaranty
shall not, without the prior consent of the Principals, cover or pertain to any
Losses attributable to such released collateral and arising from and after the
release of such released or exchanged collateral; (d) the commencement of a
case under the Bankruptcy Code by or against any Person obligated under the
Note or the other Loan Documents; or (e) any payment made on the Debt or any
other indebtedness arising under the Note or the other Loan Documents, whether
made by Borrower or Guarantor or any other Person, which is required to be
refunded pursuant to any bankruptcy or insolvency law; it being understood that
no payment so refunded shall be considered as a payment of any portion of the
Debt, nor shall it have the effect of 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

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

11.             To induce Lender to execute the
Loan Documents and to make the Loan and perform its obligations thereunder,
each Guarantor, in respect of itself, severally, hereby represents and warrants
to Lender as follows:

(i)            Guarantor is and always has been a
duly organized and validly existing limited liability company or corporation,
as the case may be, duly organized or incorporated under the laws of the state
of its formation or incorporation, as the case may be.

(ii)           Guarantor has full power and
authority to execute, deliver and perform this Guaranty, and such execution,
delivery and performance have been duly authorized by all requisite action on
the part of Guarantor.

(iii)          No consent, approval or authorization
of or declaration, registration or filing with any Governmental Authority or
nongovernmental Person, including any creditor, partner, or member of
Guarantor, is required in connection with the execution, delivery and
performance of this Guaranty that has not been obtained or waived.

(iv)          The execution, delivery and
performance of this Guaranty will not constitute a breach or default under any
other material agreement to which Guarantor is a party or may be bound.

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(v)           There is no default under this
Guaranty, or any of the other Loan Documents, nor any condition which, after
notice or the passage of time or both, would constitute a default or an Event
of Default under said documents.

(vi)          Guarantor is solvent, and no
bankruptcy, reorganization, insolvency or similar proceeding under any state or
federal law with respect to Guarantor has been initiated.

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

(viii)        Guarantor has disclosed to Lender all
material facts and has not failed to disclose any material fact that could
cause any representation or warranty made herein to be materially misleading.

(ix)           Each of the representations and
warranties made by Guarantor herein or in any of the other Loan Documents is
true, complete and correct in all material respects as of the date made.

12.             [Intentionally Deleted].

13.             The provisions of Article 23 of the
Loan Agreement are hereby incorporated by reference, except that all references
to “Borrower” therein shall be deemed to be “Guarantor” and Guarantor’s address
set forth in the first paragraph of this Guaranty shall be its address for
service of process.  All notices under
this Guaranty shall be provided to all Guarantors and Lender.

14.             This Guaranty constitutes the
entire agreement between Guarantor and Lender with respect to the matters
referred to herein, and no modification or waiver of any of the terms hereof
shall be effective unless in writing, signed by all parties hereto.

15.             This Guaranty shall inure to the
benefit of Lender and any subsequent holder of the Loan Documents and shall
bind Guarantor and its respective heirs, successors and assigns.

16.             This Guaranty shall be governed by
the internal laws of the State of New York.

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17.           SUBMISSION TO JURISDICTION.  WITH RESPECT TO ANY SUIT, ACTION OR
PROCEEDINGS RELATING TO THIS GUARANTY (EACH, A “PROCEEDING”), GUARANTORS
IRREVOCABLY (A) SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY STATE COURT
SITTING IN THE ISLAND AND COUNTY OF MAUI, HAWAII, FEDERAL COURT SITTING IN THE
STATE OF HAWAII, OR STATE OR FEDERAL COURT SITTING IN NEW YORK COUNTY, NEW
YORK, AND (B) WAIVE ANY OBJECTION WHICH THEY MAY HAVE AT ANY TIME TO THE LAYING
OF VENUE OF ANY PROCEEDING BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY
PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER WAIVE THE
RIGHT TO OBJECT, WITH RESPECT TO SUCH PROCEEDING, THAT SUCH COURT DOES NOT HAVE
JURISDICTION OVER SUCH PARTY.  NOTHING IN
THIS GUARANTY SHALL PRECLUDE LENDER FROM BRINGING A PROCEEDING IN ANY OTHER
JURISDICTION NOR WILL THE BRINGING OF A PROCEEDING IN ANY ONE OR MORE
JURISDICTIONS PRECLUDE THE BRINGING OF A PROCEEDING IN ANY OTHER
JURISDICTION.  GUARANTORS FURTHER AGREE
AND CONSENT THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR
UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY PROCEEDING IN ANY STATE
COURT SITTING IN THE ISLAND AND COUNTY OF MAUI, HAWAII, FEDERAL COURT SITTING
IN THE STATE OF HAWAII, OR STATE OR FEDERAL COURT SITTING IN NEW YORK COUNTY,
NEW YORK, MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, DIRECTED TO GUARANTORS AT THE ADDRESSES INDICATED ABOVE, AND SERVICE
SO MADE SHALL BE COMPLETE UPON RECEIPT; EXCEPT THAT IF GUARANTORS SHALL REFUSE
TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED COMPLETE FIVE (5) DAYS AFTER THE
SAME SHALL HAVE BEEN SO MAILED.

18.           Non-Waiver.  Neither failure nor delay on Lender’s part in
insisting upon strict performance of any term, condition, covenant or agreement
or exercising any right, power, remedy or privilege hereunder, shall operate as
or constitute a waiver thereof, nor shall a single or partial exercise thereof
preclude any other future exercise, or the exercise of any other right, power,
remedy or privilege.  By way of example,
and not by way of limitation, by accepting payment after the due date of any
amount payable under this Guaranty, Lender shall not be deemed to have waived
any right either to require prompt payment when due of all other amounts due
under this Guaranty, or to declare a default for failure to effect prompt
payment of any such other amount.

19.           No consent by Borrower shall be
required for any assignment or reassignment of Lender’s rights under this
Guaranty to any assignee of Lender’s interest in the Note or any part
thereof.  All references to “Lender”
hereunder shall be deemed to include such successors and assigns of Lender.

20.           Wherever possible, each provision of
this Guaranty shall be interpreted in such manner as to be effective and valid
under applicable Laws, but if any provision of this Guaranty shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining provisions of this Guaranty.

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

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

[The next page is the signature page]

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

 

	
   

  	
   

  	
  MAUI LAND & PINEAPPLE
  COMPANY,

  INC.,

  
	
   

  	
   

  	
  a Hawaii
  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ ROBERT WEBBER

  
	
   

  	
   

  	
  Name:

  	
  R. WEBBER

  
	
   

  	
   

  	
  Title:

  	
         CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE RITZ-CARLTON DEVELOPMENT

  COMPANY, INC., a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ WILLIAM T. PHILLIPS

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  WILLIAM T. PHILLIPS

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  VICE-PRESIDENT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXCLUSIVE RESORTS DEVELOPMENT

  COMPANY, LLC, a Delaware limited

  liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ TODD HARRIS

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  TODD HARRIS

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  SVP Member Services

  

 

 9Exhibit 10.5

 

RECOURSE GUARANTY

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

W I T N E S S E T H:

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

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

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

WHEREAS,
Borrower is personally liable for the Recourse Obligations;

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

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

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

1.             Each Principal, severally, hereby absolutely and
unconditionally guaranties the prompt satisfaction and discharge of any and all
of the Recourse Obligations, without defense, offset, counterclaim or right of
subrogation, each of which is hereby waived.

 

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

 

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

2.             Principal hereby waives: (a) notice
of acceptance of this Guaranty by Lender and of presentment, demand, protest,
notice of protest and of dishonor, notice of default and, except for the
notices set forth herein, all other notices of every kind or nature now or hereafter
provided by agreement or available at law; (b) the pleading of any statute of
limitations as a defense to the obligations hereunder; and (c) any right to
require or compel Lender, prior to exercising its rights hereunder to first
proceed against Borrower or any security for the Loan, or to pursue any other
remedy available to Lender.  Lender’s
failure to exercise, or delay in exercising, any right or power hereunder shall
not operate as a waiver thereof, nor shall any single or partial exercise by Lender
of any right, remedy or power hereunder preclude any other or future exercise
of any other right, remedy or power. 
Principal acknowledges that Lender may seek recovery of the Recourse
Obligations from Principal with the same force and effect as if Principal were
primary obligor under the Note and the other Loan Documents.

3.             Principal further agrees that the validity of this
Guaranty and the obligations of Principal hereunder shall in no way be
terminated, affected or impaired by reason of: (a) the assertion by Lender of
any rights or remedies which it may have under or with respect to the Note or
the other Loan Documents against any person obligated thereunder or against the
owner of the Project; (b) any failure to file or record any of the Loan Documents
or to take or perfect any security intended to be provided thereby; (c) the
release or exchange of the Real Property or any other collateral for the Loan;
provided that this Guaranty shall not, without the prior consent of Principals,
cover or pertain to any Recourse Obligations that relate to such released or
exchanged portion of the collateral arising from and after the release of such
released or exchanged collateral; (d) the commencement of a case under the
Bankruptcy Code by or against any Person obligated under the Note or the other
Loan Documents; or (e) any payment made on the Debt, whether made by Borrower
or Principal or any other Person, which is required to be refunded pursuant to
the Bankruptcy Code; it being understood that no payment so refunded shall be
considered as a payment in reduction of the Debt, nor shall it have the effect
of reducing the liability of Principal hereunder.  It is further understood that if Borrower
shall have taken advantage of, or be subject to the protection of, any
provision of the Bankruptcy Code, the effect of which is to prevent or delay
Lender from taking any remedial action against Borrower, including the exercise
of any option Lender has to declare the Debt due and payable on the happening
of any default or event by which, under the terms of the Loan Documents, the
Debt shall become due and payable, Lender may, as against Principal,
nevertheless, declare the

 

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

4.             Principal further agrees: (a) that
this Guaranty shall remain and continue in full force and effect,
notwithstanding any modification, extension or renewal of the Note or any of
the other Loan Documents; (b) that Lender shall not be under a duty to protect,
secure or insure any security or lien provided by the Loan Documents or other
collateral for the Loan; and (c) that other indulgence or forbearance may be
granted under any or all of the Loan Documents, without notice to or further
consent of Principal.  This Guaranty
shall terminate upon the complete payment of the Debt and fulfillment of any
outstanding obligations of Principals under this Guaranty.

5.             Except as may be permitted under
the Loan Agreement, Principal will not convey, transfer or assign, directly or
indirectly, any portion of the Mortgaged Property of any nature, whether real,
personal or mixed, tangible or intangible, or any interest therein, for less
than full and fair consideration.  Nothing
herein shall be construed to prohibit any dividend or distribution of earnings
in the ordinary course of Principal’s business.

6.             Any indebtedness of Borrower to
Principal now or hereafter existing (including, without limitation, any rights
of subrogation Principal may have as a result of any payment by Principal under
this Guaranty), together with any interest thereon, shall be, and such
indebtedness is hereby, deferred, postponed and subordinated to the prior
payment in full of the Debt.  Until payment
in full of the Debt (and including interest accruing on the Note after the
commencement of a proceeding by or against Borrower under the Bankruptcy Code
which interest the parties agree shall remain a claim that is prior and
superior to any claim of Principal notwithstanding any contrary practice,
custom or ruling in cases under the Bankruptcy Code generally), Principal
agrees not to accept any payment or satisfaction of any kind of indebtedness of
Borrower to Principal, (except under the Marketing Agreements, that certain Technical Services Agreement
dated September 1, 2004, between Borrower and Ritz-Carlton, that certain
Project Development Management Agreement dated October 1, 2004, between
Borrower and Ritz-Carlton and that certain Entitlement Services Letter
Agreement between Borrower and Kapalua Land Company dated August 16, 2005).  Further, if Principal shall now or at any
time in the future comprise more than one person, firm or corporation,
Principal agrees that until such payment in full of the Debt: (a) no one of
them shall accept payment from the others by way of contribution on account of
any payment made hereunder by such party to Lender; (b) no one of them will
take any action to exercise or enforce any rights to such contribution; and (c)
if any one of them should receive any payment, satisfaction or security for any
indebtedness of Borrower to any Principal or for any contribution by the others
of them for payment made hereunder by the recipient to Lender, such payment,
satisfaction or security shall be delivered to Lender in the form received,
endorsed or assigned as may be appropriate for application on account of, or as
security for, the Debt and until so delivered shall be held in trust for Lender
as security for the Debt.

7.               Principal hereby indemnifies
Lender from and against any and all claims, losses, damages and liabilities
growing out of or resulting from this Guaranty (including, without limitation,
enforcement of this Guaranty), except claims, losses, damages or liabilities
resulting from Lender’s gross negligence and willful misconduct.  Principal will upon written

 

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

 

8.               To
induce Lender to execute the Loan Documents and to make the Loan and perform
its obligations thereunder, each Principal, in respect of itself, severally,
hereby represents and warrants to Lender in respect of itself as follows:

(i)            Principal is and always has been a
duly organized and validly existing limited liability company or corporation,
as the case may be, duly organized or incorporated under the laws of the state
of its formation or incorporation, as the case may be.

(ii)           Principal has full power and authority
to execute, deliver and perform this Guaranty, and such execution, delivery and
performance have been duly authorized by all requisite action on the part of
Principal.

(iii)          No consent, approval or authorization
of or declaration, registration or filing with any Governmental Authority or
nongovernmental Person, including any creditor, partner, or member of
Principal, is required in connection with the execution, delivery and
performance of this Guaranty that has not been obtained or waived.

(iv)          The execution, delivery and
performance of this Guaranty will not constitute a breach or default under any
other material agreement to which Principal is a party or may be bound.

(v)           There is no default under this
Guaranty, or any of the other Loan Documents, nor any condition which, after
notice or the passage of time or both, would constitute a default or an Event
of Default under said documents.

(vi)          Principal is solvent, and no
bankruptcy, reorganization, insolvency or similar proceeding under any state or
federal law with respect to Principal has been initiated.

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

 

(viii)        Principal has disclosed to Lender all
material facts and has not failed to disclose any material fact that could
cause any representation or warranty made herein to be materially misleading.

(ix)           Each of the representations and
warranties made by Principal herein or in any of the other Loan Documents is
true, complete and correct in all material respects as of the date made.

9.               [Intentionally Deleted].

 

10.             The provisions of Article 23 of the
Loan Agreement are hereby incorporated by reference, except that all references
to “Borrower” therein shall be deemed to be “Principal” and Principal’s address
set forth in the first paragraph of this Guaranty shall be its address for
service of process.  All notices under
this Guaranty shall be provided to all Principals and Lender.

11.             This Guaranty constitutes the
entire agreement between Principal and Lender with respect to the matters
referred to herein, and no modification or waiver of any of the terms hereof
shall be effective unless in writing, signed by all parties hereto.

12.             This Guaranty shall inure to the
benefit of Lender and any subsequent holder of the Loan Documents and shall
bind Principal and its respective heirs, successors and assigns.

13.             This Guaranty shall be governed by
the internal laws of the State of New York.

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

 

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

 

15.           [Intentionally Deleted].

 

16.           Process in any suit, action or
proceeding of the nature referred to in Section 14 hereof may be served:
(a) by registered or certified mail, postage prepaid, to Principal at the
address set forth above or to such other address of which Principal shall have
given Lender written notice; or (b) if Principal shall not have made an
appearance within twenty one (21) days after service in accordance with clause
(a) of this Section, by hand delivery to the agent identified in Section 15
hereof, or such successor agent as shall have been identified in accordance
with Section 15 hereof.  Nothing
in this Section shall affect the Lender’s right to serve process in any manner
permitted by law, or limit Lender’s right to bring proceedings against
Principal in the courts of any other jurisdiction.

17.           If Principal shall advance or become
obligated to pay any sums in respect of the Recourse Obligations as provided
herein, or if for any reason whatsoever Borrower or any subsequent owner of the
Real Property is now or shall hereafter become indebted to Principal, Principal
agrees that the amount of such sums and of such indebtedness and all interest
thereon shall at all times be subordinate as to lien, time of payment and in
all other respects to all sums, including principal and interest and other
amounts, at any time owing to Lender under the Loan Documents.  For so long as this Agreement shall remain in
force and effect, Principal shall not exercise any such right of subrogation in
or under the Loan Documents, or any right to participate in any way therein, or
in the right, title or interest of Lender in or to the Real Property.

18.           Non-Waiver.  Neither failure nor delay on Lender’s part in
insisting upon strict performance of any term, condition, covenant or agreement
or exercising any right, power, remedy or privilege hereunder, shall operate as
or constitute a waiver thereof, nor shall a single or partial exercise thereof
preclude any other future exercise, or the exercise of any other right, power,
remedy or privilege.  By way of example,
and not by way of limitation, by accepting payment after the due date of any
amount payable under this Guaranty, Lender shall not be deemed to have waived
any right either to require prompt payment when due of all other amounts due
under this Guaranty, or to declare a default for failure to effect prompt
payment of any such other amount.

19.           No consent by Borrower shall be
required for any assignment or reassignment of Lender’s rights under this
Guaranty to any assignee of Lender’s interest in the Note or any part
thereof.  All references to “Lender”
hereunder shall be deemed to include such successors and assigns of Lender.

20.           Wherever possible, each provision of
this Guaranty shall be interpreted in such manner as to be effective and valid
under applicable Laws, but if any provision of this Guaranty shall be
prohibited by or invalid under applicable law, such provision shall be

 

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

 

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

 

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

 

[The next page is the signature
page]

 

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

 

 

	
  

  	
  MAUI LAND & PINEAPPLE COMPANY, INC.,

  
	
   

  	
  a Hawaii corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ ROBERT WEBBER

  	
   

  
	
   

  	
  Name:

  	
  R. WEBBER

  	
   

  
	
   

  	
  Title:

  	
         CFO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE RITZ-CARLTON DEVELOPMENT

  COMPANY, INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ WILLIAM T. PHILLIPS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  WILLIAM T. PHILLIPS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  VICE-PRESIDENT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXCLUSIVE
  RESORTS DEVELOPMENT

  COMPANY, LLC, a Delaware limited liability

  company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ TODD HARRIS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  TODD HARRIS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  SVP Member Services

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