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                                  COMMON STOCK
                          REGISTRATION RIGHTS AGREEMENT

                            Dated as of June 3, 1998
                                 by and between

                              KENNEDY-WILSON, INC.
                                 as the Company,

                                       and

                        FBR ASSET INVESTMENT CORPORATION
                                as the Purchaser


         This Registration Rights Agreement (the "Agreement") is made and
entered into as of June 3, 1998, by and between Kennedy-Wilson, Inc., a Delaware
corporation (the "Company"), and FBR Asset Investment Corporation, a Virginia
corporation (the "Purchaser").

         This Agreement is made pursuant to the Loan and Warrant Agreement (the
"Loan and Warrant Agreement"), of even date herewith, between the Company and
the Purchaser. In order to induce the Purchaser to enter into the Purchase
Agreement, the Company has agreed to provide the registration rights provided
for in this Agreement to the Purchaser and its respective direct and indirect
transferees. The execution of this Agreement is a condition to the closing of
the transactions contemplated by the Loan and Warrant Agreement.

         The parties hereby agree as follows:

1.       Definitions

         As used in this Agreement, the following terms shall have the following
meanings:

         Affiliate: When used with reference to a specified person, (i) any
person that directly or indirectly controls or is controlled by or is under
common control with the specified person, (ii) any person that is an officer of,
partner in or trustee of, or serves in a similar capacity with respect to, the
specified person or of which the specified person is an officer, partner or
trustee, or with respect to which the specified person serves in a similar
capacity, and (iii) any person that, directly or indirectly, is the beneficial
owner of 5% or more of any class of equity securities of the specified person or
of which the specified person is directly or indirectly the beneficial owner of
5% or more of any class of equity securities.

         Agreement: This Registration Rights Agreement, as the same may be
amended, supplemented or modified from time to time in accordance with the terms
hereof.

         Business Day: With respect to any act to be performed hereunder, each
Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
banking institutions in New York, New York or other applicable place where such
act is to occur are authorized or obligated by applicable law, regulation or
executive order to close.
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         Closing Date: The Closing Date for the issuance of the Promissory Note.

         Commission: The Securities and Exchange Commission.

         Common Stock: Common stock, $0.01 per value per share, of the Company.

         Company: Kennedy-Wilson, Inc., a Delaware corporation, and any
successor corporation thereto.

         Controlling Person: As defined in Section 5(a) hereof.

         Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the Commission pursuant thereto.

         Form S-3. Such form under the Securities Act as is in effect on the
date hereof or any successor registration form under the Securities Act
subsequently adopted by the Commission that permits inclusion or incorporation
of substantial information by reference to other documents filed by the Company
with the Commission.

         Holder: Each registered holder of any Registrable Shares.

         Indemnified Party: As defined in Section 5(a) hereof.

         Loan and Warrant Agreement: The Loan and Warrant Agreement is as
defined in the preamble.

         Person: An individual, partnership, corporation, trust, unincorporated
organization, government or agency or political subdivision thereof, or any
other legal entity.

         Proceeding: An action, claim, suit or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or, to the knowledge of the person subject thereto,
threatened.

         Prospectus: The prospectus included in any Registration Statement,
including any preliminary prospectus, and all other amendments and supplements
to any such prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference, if any, in
such prospectus.

         Purchaser:  FBR Asset Investment Corporation.

         Registrable Shares: Each of the Shares, upon original issuance thereof,
until (i) the date on which it has been registered effectively pursuant to the
Securities Act and disposed of in accordance with the Registration Statement
relating to it, (ii) the date on which either it is distributed to the public
pursuant to Rule 144 (or any similar provisions then in effect) or is saleable
pursuant to Rule 144(k) promulgated by the Commission pursuant to the Securities
Act or (iii) the date on which it is saleable, without restriction, pursuant to
an available exemption from registration under the Securities Act, or (iv) the
date on which it is sold to the Company.


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         Registration Statement: Any registration statement of the Company,
including the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be
incorporated by reference, if any, in such registration statement.

         Rule 144: Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.

         Rule 144A: Rule 144A promulgated by the Commission pursuant to the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission as a replacement thereto
having substantially the same effect as such rule.

         Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated by the Commission thereunder.

         Shares: The shares of Common Stock being offered and sold pursuant to
the terms and conditions of the Purchase Agreement.

2.       Form S-3 Registration

         (a) In case the Company shall receive from the Holders of at least
fifty (50) percent of all outstanding Registrable Shares a written request or
requests that the Company effect a registration on Form S-3 and any related
qualification or compliance with respect to all or a part of the Registrable
Shares owned by such Holders, then the Company will:

                  (i) Notice. Promptly give written notice of the proposed
         registration and the Holders' request therefor, and any related
         qualification or compliance, to all other Holders of Registrable
         Shares; and

                  (ii) Registration. As soon as practicable, use its reasonable
         best efforts to effect such registration and all such qualifications
         and compliances as may be so requested and as would permit or
         facilitate the sale and distribution of all or such portion of such
         Holders' Registrable Shares as are specified in such request, together
         with all or such portion of the Registrable Shares of any other Holders
         joining in such request as are specified in a written request given
         within twenty (20) days after receipt of such written notice from the
         Company; provided, however, that the Company shall not be obligated to
         effect any such registration, qualification or compliance pursuant to
         this Section 2:

                           (1) if Form S-3 is not available for such offering by
                  the Holders;

                           (2) if the Holders, together with the holders of any
                  other securities of the Company entitled to inclusion in such
                  registration, propose to sell Registrable Shares and such
                  other securities (if any) at an aggregate price to the public
                  of less than $100,000;


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                           (3) if the Company shall furnish to the Holders a
                  certificate signed by the President or Chief Executive Officer
                  of the Company stating that in the good faith judgment of the
                  Board of Directors of the Company, it would be detrimental to
                  the Company and its shareholders for such Form S-3
                  registration to be effected at such time, in which event the
                  Company shall have the right to defer the filing of the Form
                  S-3 registration statement no more than once during any twelve
                  month period for a period of not more than 120 days after
                  receipt of the request of the Holders under this Section 2;

                           (4) in any particular jurisdiction in which the
                  Company would be required to qualify to do business as a
                  foreign corporation or to execute a general consent to service
                  of process in effecting such registration, qualification, or
                  compliance, unless the Company is already subject to service
                  or required to be so qualified in such jurisdiction and except
                  as may be required by the Securities Act; or

                           (5) if within 14 days after its receipt of a written
                  request to effect such registration, the Company causes to be
                  delivered to the Holders an opinion of counsel reasonably
                  acceptable to the Holders to the effect that the proposed
                  disposition of Registrable Shares by the Holders will not
                  require registration or qualification under the Securities
                  Act, it being specifically understood and agreed that the
                  Holders will promptly furnish to the Company and such counsel
                  all information such counsel may reasonably request in order
                  to enable such counsel to determine whether it would be able
                  to render such opinion.

                  (b) Expenses. The Company shall pay all expenses incurred in
         connection with each registration requested pursuant to this Section 2,
         (excluding underwriters' or brokers' discounts and commissions),
         including without limitation all filing, registration and
         qualification, printers' and accounting fees, the fees and
         disbursements of the Company, and the reasonable fees and disbursements
         of one counsel for the selling Holders.

                  (c) Number. Holders may exercise rights pursuant to this
         Section no more than twice.

3.       Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission that may at any time permit the
sale of the Registrable Shares to the public without registration, during any
such time as a public market exists for the Common Stock of the Company, the
Company agrees to:

                  (a) Make and keep public information available, as those terms
         are understood and defined in Rule 144 under the Securities Act, at all
         times after the effective date of the first registration under the
         Securities Act filed by the Company for an offering of its securities
         to the general public;

                  (b) File with the Commission in a timely manner all reports
         and other documents required of the Company under the Securities Act
         and the Exchange Act (at any time after it has become subject to such
         reporting requirements); and


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                  (c) So long as a Holder owns any Registrable Shares, to
         furnish to the Holder forthwith upon request a written statement by the
         Company as to its compliance with the reporting requirements of said
         Rule 144 and of the Securities Act and the Exchange Act (at any time
         during which it is subject to the reporting requirements of the
         Exchange Act), a copy of the most recent annual or quarterly report of
         the Company, and such other reports and documents of the Company as a
         Holder may reasonably request in availing itself of any rule or
         regulation of the Commission allowing a Holder to sell any such
         securities without registration (at any time after the Company has
         become subject to the reporting requirements of the Exchange Act).

4. Registration Procedures. In connection with the obligations of the Company
with respect to any registration pursuant to this Agreement, the Company shall
use its reasonable best efforts to effect or cause to be effected the
registration of the Registrable Shares under the Securities Act to permit the
sale of such Registrable Shares by the Holder or Holders in accordance with the
Holders' intended method or methods of distribution, and the Company shall:

                  (a) prepare and file with the Commission, as specified in this
         Agreement, a Registration Statement, which Registration Statement shall
         comply as to form in all material respects with the requirements of the
         applicable form and include all financial statements required by the
         Commission to be filed therewith, and use its reasonable best efforts
         to cause such Registration Statement to become effective and remain
         effective for the lesser of a period of ninety (90) days or until all
         such Registrable Shares are sold in accordance with the intended
         distribution of such Shares;
 
                 (b) subject to Section 4(i) hereof, prepare and file with the
         Commission such amendments and post-effective amendments to each such
         Registration Statement as may be necessary to keep such Registration
         Statement effective for the applicable period; cause each such
         Prospectus to be supplemented by any required prospectus supplement,
         and as so supplemented to be filed pursuant to Rule 424 or any similar
         rule that may be adopted under the Securities Act; and comply with the
         provisions of the Securities Act with respect to the disposition of all
         securities covered by each Registration Statement during the applicable
         period;

                  (c) furnish to the Holder of Registrable Shares, without
         charge, as many copies of each Prospectus, including each preliminary
         Prospectus, and any amendment or supplement thereto and such other
         documents as such Holder may reasonably request, in order to facilitate
         the public sale or other disposition of the Registrable Shares; the
         Company consents to the use of any such Prospectus, including each
         preliminary Prospectus, by the Holder of Registrable Shares, if any, in
         connection with the offering and sale of the Registrable Shares covered
         by any such Prospectus;

                  (d) use its reasonable best efforts to register or qualify, or
         obtain exemption for registration or qualification for, all Registrable
         Shares by the time the applicable Registration Statement is declared
         effective by the Commission under all applicable state securities or
         "blue sky" laws of such jurisdictions as the Holder of Registrable
         Shares covered by a Registration Statement shall reasonably request in
         writing, keep each such registration or qualification or 

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         exemption effective during the period such Registration Statement is
         required to be kept effective and do any and all other acts and things
         that may be reasonably necessary or advisable to enable such Holder to
         consummate the disposition in each such jurisdiction of such
         Registrable Shares owned by such Holder; provided, however, that the
         Company shall not be required to (i) qualify generally to do business
         in any jurisdiction or to register as a broker or dealer in such
         jurisdiction where it would not otherwise be required to qualify but
         for this Section 4(d), (ii) subject itself to taxation in any such
         jurisdiction, or (iii) submit to the general service of process in any
         such jurisdiction; provided, further, that if the Company fails to list
         the Registrable Shares on a national stock exchange or qualify for
         quotation on an automatic quotation system at or prior to the time the
         Registration Statement is declared effective by the Commission because
         it fails to meet requirements for such listing or quotation regarding
         the number of holders of its shares, the obligation in this Section
         4(d) shall not require the Company to register or qualify the
         Registrable Shares in any jurisdiction where the Company reasonably
         concludes, based upon the advice of securities counsel, that such
         registration or qualification would require unreasonable effort
         (including, without limitation, amendments to the Company's Articles of
         Incorporation or Bylaws) or expense;

                  (e) notify the Holder of Registrable Shares promptly and, if
         requested by such Holder, confirm such advice in writing (i) when a
         Registration Statement has become effective and when any post-effective
         amendments and supplements thereto become effective, (ii) of the
         issuance by the Commission or any state securities authority of any
         stop order suspending the effectiveness of a Registration Statement or
         the initiation of any proceedings for that purpose, and (iii) (x) the
         fact that or (y) the happening of, any event during the period a
         Registration Statement is effective as a result of which such
         Registration Statement or the related Prospectus contains any untrue
         statement of a material fact or omits to state any material fact
         required to be stated therein or necessary to make the statements
         therein not misleading, and (iv) at the request of any such Holder,
         promptly to furnish to such Holder a reasonable number of copies of a
         supplement to or an amendment of such Prospectus as may be necessary so
         that, as thereafter delivered to the purchaser of such securities, such
         Prospectus shall not include an untrue statement of a material fact or
         omit to state a material fact required to be stated therein or
         necessary to make the statements therein not misleading;

                  (f) upon request by the Holder, furnish to the Holder of
         Registrable Shares copies of any request by the Commission or any state
         securities authority of amendments or supplements to a Registration
         Statement and Prospectus or for additional information;

                  (g) make every reasonable best effort to avoid the issuance
         of, or if issued to obtain the withdrawal of, any enjoining order
         suspending the use or effectiveness of a Registration Statement or the
         lifting of any suspension of the qualification (or exemption from
         qualification) of any of the Registrable Shares for sale in any
         jurisdiction, at the earliest possible moment;

                  (h) upon request furnish to the Holder of Registrable Shares,
         without charge, at least one conformed copy of each Registration
         Statement and any post-effective amendment thereto (without documents
         incorporated therein by reference or exhibits thereto, unless
         requested);


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                  (i) upon the occurrence of any event contemplated by Section
         4(e)(iii) hereof, use its reasonable best efforts to prepare a
         supplement or post-effective amendment to a Registration Statement or
         the related Prospectus or any document incorporated therein by
         reference or file any other required document so that, as thereafter
         delivered to the purchasers of the Registrable Shares, such Prospectus
         will not contain any untrue statement of a material fact or omit to
         state a material fact required to be stated therein or necessary to
         make the statements therein, in the light of the circumstances under
         which they were made, not misleading;

                  (j) if requested by any Holders of Registrable Shares being
         sold in connection with such offering, (i) promptly incorporate in a
         prospectus supplement or post-effective amendment such information as
         such Holders indicate relates to them or otherwise reasonably request
         be included therein, and (ii) make all required filings of such
         prospectus supplement or such post-effective amendment as soon as
         practicable after the Company has received notification of the matters
         to be incorporated in such prospectus supplement or post-effective
         amendment; provided, however, that the Company shall not be required to
         take any action pursuant to this Section 4 that would or would likely,
         in the opinion of counsel for the Company, violate applicable law;

                  (k) make available to inspection by representatives of the
         Holder of the Registrable Shares participating in any disposition
         pursuant to a Registration Statement and any special counsel or
         accountant retained by such Holders, all financial and other records,
         pertinent corporate documents and properties of the Company and cause
         the respective officers, directors and employees of the Company to
         supply all information reasonably requested by any such
         representatives, the representative of the underwriters, the special
         counsel or accountants in connection with a Registration Statement;
         provided, however, that such records, documents or information that the
         Company determines, in good faith, to be confidential and notifies such
         representatives, special counsel or accountants are confidential shall
         not be disclosed by the representatives, representative of the
         underwriters, special counsel or accountants unless (i) the disclosure
         of such records, documents or information is necessary to avoid or
         correct a misstatement or omission in a Registration Statement, (ii)
         the release of such records, documents or information is ordered
         pursuant to a subpoena or other order from a court of competent
         jurisdiction, or (iii) such records, documents or information have been
         generally made available to the public;

                  (l) use its reasonable best efforts (including, without
         limitation, seeking to cure any deficiencies (within the Company's
         control) cited by the exchange or market in the Company's listing
         application) to list all Registrable Shares on the primary exchange on
         which the Company's Common Stock is then listed;

                  (m) provide a CUSIP number for all Registrable Shares, not
         later than the effective date of the Registration Statement;

                  (n) otherwise use its reasonable best efforts to comply with
         all applicable rules and regulations of the Commission and make
         generally available to its securityholders, as soon as reasonably
         practicable, earnings statements covering at least 12 months that
         satisfy the 

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         provisions of Section 1l(a) of the Securities Act and Rule 158 (or any
         similar rule promulgated under the Securities Act) thereunder;

                  (o) provide and cause to be maintained a transfer agent for
         all Registrable Shares covered by any Registration Statement from and
         after a date not later than the effective date of such Registration
         Statement; and

                  (p) in connection with any sale or transfer of the Registrable
         Shares that will result in such securities no longer being the
         Registrable Shares, cooperate with the Holders to facilitate the timely
         preparation and delivery of certificates representing the Registrable
         Shares to be sold, which certificates shall, subject to applicable laws
         and regulations not bear any restrictive legends and to enable such
         Registrable Shares to be in such denominations and registered in such
         names as the representative of the underwriters, if any, or Holders may
         request at least two Business Days prior to any sale of the Registrable
         Shares.

                  (q) The Company may require the Holder of Registrable Shares
         to furnish to the Company such information regarding the proposed
         distribution by such Holder of such Registrable Shares as the Company
         may from time to time reasonably request in writing or as shall be
         required to effect the registration of their Registrable Shares.

                  (r) The Holder agrees that, upon receipt of any notice from
         the Company of the happening of any event of the kind described in
         Section 4(e)(ii) or (iii) hereof, such Holder will immediately
         discontinue disposition of Registrable Shares pursuant to a
         Registration Statement until notice from the Company (in the case of an
         event described in Section 4(e)(ii) hereof) or such Holder's receipt of
         the copies of the supplemented or amended Prospectus (in the case of an
         event described in Section 4(e)(iii)). If so directed by the Company,
         such Holder will deliver to the Company (at the expense of the Company)
         all copies in its possession, other than permanent file copies then in
         such Holder's possession, of the Prospectus covering such Registrable
         Shares current at the time of receipt of such notice.


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5.       Black-Out Period.

         (a) Following the effectiveness of a Registration Statement (and the
filings with any state securities commissions), the Company may direct the
Holder to suspend sales of the Registrable Shares for such times as the Company
reasonably may determine is necessary and advisable, including the following
events: (i) an underwritten offering by the Company where the Company is advised
by the representative of underwriters for such Underwritten Offering that sale
of Registrable Shares under the Registration Statement would have a material
adverse effect on the primary offering, or (ii) pending negotiations relating
to, or consummation of, a transaction or the occurrence of an event (x) that
would require additional disclosure of material information by the Company in
the Registration Statement (or such filings), (y) as to which the Company has a
bona fide business purpose for preserving confidentiality, or (z) that renders
the Company unable to comply with Commission requirements, in each case under
circumstances that would make it impractical or inadvisable to cause the
Registration Statement (or such filings) to become effective or to promptly
amend or supplement the Registration Statement on a post-effective basis, as
applicable.

         (b) In the case of an event that causes the Commission, any applicable
state securities authority or the Company to suspend the effectiveness of a
Registration Statement (a "Suspension Event"), the Company may give notice (a
"Suspension Notice") to the Holders to suspend sales of the Registrable Shares
so that the Company may correct or update the Registration Statement (or such
filings); provided, however, that such suspension shall continue only for so
long as the Suspension Event or its effect is continuing. The Holders shall not
effect any sales of the Registrable Shares pursuant to such Registration
Statement (or such filings) at any time after it has received a Suspension
Notice from the Company. If so directed by the Company, the Holders will deliver
to the Company all copies of the Prospectus covering the Registrable Shares held
by them at file time of receipt of the Suspension Notice. The Holders may
recommence effecting sales of the Registrable Shares pursuant to the
Registration Statement (or such filings) following further notice to such effect
(an "End of Suspension Notice") from the Company, which End of Suspension Notice
shall be given by the Company promptly following the conclusion of any
Suspension Event.

         (c) Notwithstanding Section 4(a) hereof, if the Company shall give a
Suspension Notice pursuant to this Section 5, the Company agrees it shall extend
the period during which the Registration Statement shall be maintained effective
pursuant to this Agreement by the number of days during the period from the date
of the giving of the Suspension Notice to and including the date when the
Holders shall have received the End of Suspension Notice and copies of the
supplemented or amended Prospectus necessary to resume sales.

6.       Indemnification Contribution

         (a) Indemnification by the Company. The Company agrees to indemnify,
defend and hold harmless (i) the Purchaser, (ii) each Holder of the Registrable
Shares, (iii) each person, if any, who controls (within the meaning of the
Securities Act or the Exchange Act) any of the foregoing (any of the persons
referred to in this clause (iii) being hereinafter referred to as a "Controlling
Person"), and (iv) the respective officers, directors, partners, employees,

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representatives and agents of the Purchaser, each Holder of the Registrable
Shares, or any Controlling Person (any person referred to in clause (i), (ii),
(iii) or (iv) may hereinafter be referred to as an "Indemnified Party") from and
against any loss, expense, liability, damage or claim (including the reasonable
cost of investigation) which, jointly or severally, any Indemnified Party may
incur under the Securities Act, the Exchange Act or otherwise, insofar as such
loss, expense, liability, damage or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto) or in a Prospectus (or any
amendment thereto) pursuant to which Registrable Shares were registered under
the Securities Act including all documents incorporated therein by reference, or
arises out of or is based upon any omission or alleged omission to state a
material fact required to be stated in such Registration Statement or Prospectus
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that such indemnity
with respect to any Prospectus shall not inure to the benefit of any Indemnified
Party to the extent that any such loss, claim, liability, damage or expense
arises out of the failure of any Indemnified Party or its officers, directors,
partners, employees, representatives or agents or any Controlling Person thereof
to send or give a copy of the final Prospectus, as the same may be then
supplemented or amended, to the person asserting an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Shares to such person if such statement
or omission was corrected in such final Prospectus; and provided, further, that
such indemnity agreement does not apply to any Indemnified Party with respect to
any loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Holder or such Holder's directors, officers, partners, employees,
representatives and agents or any Controlling Person thereof expressly for use
in a Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto).

         (b) Indemnification by Holders. Each Holder severally agrees to
indemnify and hold harmless the Company, each of its directors and officers
(including each officer of the Company who signed the Registration Statement),
partners, employees, representatives and agents, each Controlling Person of the
Company, any underwriter and any Holder selling securities under such
Registration Statement or any of such other Holder's partners, directors,
officers or Controlling Persons, against any and all loss, liability, claim,
damage and expenses described in the indemnity contained in Section 8(a) hereof,
as incurred, but only with respect to such untrue statement or omission, or
alleged untrue statements or omissions, made in a Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by the Holder expressly for use in such Registration Statement (or any
amendment thereto) or such Prospectus (or any amendment or supplement thereto).

         (c) Conduct of Indemnification Proceedings. Each Indemnified Party
shall give reasonably prompt notice to each indemnifying party of any action or
proceeding commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve it
from any liability that it may have under this indemnity agreement except to the
extent that the indemnifying party is actually prejudiced by such failure to

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give notice. If the indemnifying party so elects within a reasonable time after
receipt of such notice, the indemnifying party may assume the defense of such
action or proceeding at such indemnifying party's own expense with counsel
chosen by the indemnifying party and approved by the Indemnified Party or
parties in such action or proceeding, which approval shall not be unreasonably
withheld; provided, however, that if such Indemnified Party or parties
reasonably determines that a conflict of interest exists where it is advisable
for such Indemnified Party or parties to be represented by separate counsel or
that, upon advice of counsel, there may be legal defenses available to them that
are different from or in addition to those available to the indemnifying party,
then the indemnifying party shall not be entitled to assume such defense and the
Indemnified Party or parties shall be entitled to one separate counsel at the
indemnifying party's expense. If an indemnifying party is not entitled to assume
the defense of such action or proceeding as a result of the proviso to the
preceding sentence, such indemnifying party's counsel shall be entitled to
conduct such indemnifying party's defense, and counsel for the Indemnified Party
or parties shall be entitled to conduct the defense of such Indemnified Party or
parties, it being understood that both such counsel will cooperate with each
other to conduct the defense of such action or proceeding as efficiently as
possible. If an indemnifying party is not so entitled to assume the defense of
such action or does not assume such defense, after having received the notice
referred to in the first sentence of this paragraph, the indemnifying party or
parties will pay the reasonable fees and expenses counsel for the Indemnified
Party or parties. In such event, however, no indemnifying party will be liable
for any settlement effected without the written consent of such indemnifying
party. No indemnifying party shall, without the consent of the Indemnified
Party, consent to entry of any judgment or enter into a settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such
claim or litigation. If an indemnifying party is entitled to assume, and
assumes, the defense of such action or proceeding in accordance with this
paragraph, such indemnifying party shall not be liable for any fees and expenses
for counsel for the Indemnified Parties incurred thereafter in connection with
such action or proceeding.

         (d) Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
this Section 6 is for any reason held to be unenforceable, unavailable or
insufficient although applicable in accordance with its terms, the Company and
Holder shall contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity agreement incurred by
the Company and the Holder in such proportion that the percentage of the
Holder's total contribution under this Section 6(d) shall correspond to the
percentage that the public offering price of the Holder's Registrable Shares
offered by and sold under the Registration Statement bears to the public
offering price of all securities offered by and sold under such Registration
Statement. Notwithstanding the foregoing, no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 6 each Controlling
Person of a Holder, if any, shall have the same rights to contribution as such
Holder, and each director of the Company, each officer of the Company who signed
the Registration Statement and each Controlling Person of the Company, if any,
shall have the same rights to contribution as the Company. Each party entitled
to contribution agrees that upon the service of a summons or other initial legal
process upon it in any action instituted against it in respect of 

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which contribution may be sought, it shall promptly give written notice of such
service to the party or parties from whom contribution may be sought, but the
omission so to notify such party or parties of any such service shall not
relieve the party from whom contribution may be sought from any obligation it
may have hereunder or otherwise.

         (e) Survival. The obligations of the Company and the Holders under this
Section 6 shall survive the completion of any offering of Registrable Shares in
a Registration Statement and otherwise.

7. Termination of the Company's Obligations. The Company shall have no
obligations pursuant to this Agreement with respect to: (a) any request or
requests for registration made by any Holder on a date more than two (2) years
after the issuance of the Warrant; or (b) any Registrable Shares proposed to be
sold by a Holder in a registration pursuant to this Agreement if, in the opinion
of counsel to the Company, all such Registrable Shares proposed to be sold by a
Holder may be sold in a three-month period without registration under the
Securities Act pursuant to Rule 144 under the Securities Act.

8. Miscellaneous

         (a) Remedies. In the event of a breach by the Company, or by a Holder
of the Registrable Shares, of any of their obligations under this Agreement,
each Holder of the Registrable Shares of the Company, in addition to being
entitled to exercise all rights granted by law, including recovery and damages,
will be entitled to seek specific performance of its rights under this
Agreement; provided, however, that no Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Agreement.

         (b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, except if the written consent of the Holders of a majority in aggregate
principal amount of the then outstanding Registrable Shares is obtained;
provided, however, that for the purposes of this Agreement, Registrable Shares
that are owned, directly or indirectly, by either the Company or an Affiliate of
the Company are not deemed outstanding. Notwithstanding the foregoing, a waiver
or consent to depart from the provisions hereof with, respect to a matter that
relates exclusively to the rights of Holders of the Registrable Shares whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect the rights of other Holders of the Registrable
Shares may be given by Holders of a majority of the Registrable Shares being
sold by such Holders pursuant to such Registration Statement; provided, however,
that the provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the immediately
preceding sentence.

         (c) Notices. All notices and other communications provided for herein
shall be made in writing by hand-delivery, next-day air courier, certified
first-class mail, return receipt requested, telex or telecopy;


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<PAGE>   13

                  (i) if to the Company, to 530 Wilshire Blvd., #101, Santa
         Monica, California 90401, ATTN: Freeman Lyle;

                  (ii) if to the Purchaser, to 1001 Nineteenth Street, North,
         Arlington, VA 22209, ATTN: Eric F. Billings;

                  (iii) if to any other person who is then the Holder of any
         Registrable Shares, to the address of such Holder as it appears in the
         Common Stock register of the Company.

         Except as otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given (v) when delivered by hand, if
personally delivered, (w) one Business Day after being timely delivered to a
next-day air courier, (x) five Business Days after being deposited in the mail,
postage prepaid, if mailed, (y) when answered back, if telexed, or (z) when
receipt is acknowledged by the recipient's telecopier machine or otherwise, if
telecopied.

         (d) Successors and Assigns. Notwithstanding anything herein to the
contrary, the registration rights of a Holder under Section 2 hereof will be
assigned to any party who acquires Registrable Shares from such Holder;
provided, however, that any such assignee shall receive such assigned rights
subject to all the terms and conditions of this Agreement, including without
limitation the provisions of this Section 8(d).

         (e) Counterparts. This Agreement may be executed in any number of
counterparts and by the 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 Agreement.

         (f) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, as applied to contracts made
and performed within the State of New York without regard to principles of
conflicts of law.

         (g) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.

         (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the terms of this
Agreement. All references made in this Agreement to "Section" refer to such
Section of this Agreement, unless expressly stated otherwise.

         (i) Costs and Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the 

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<PAGE>   14

prevailing party, as determined by the court, shall be entitled to recover its
reasonable costs and attorneys' fees in addition to any other available remedy.

         (j) Adjustment for Stock Splits, etc. Wherever in this Agreement there
is a reference to a specific number of shares, then upon the occurrence of any
subdivision, combination, or stock dividend of such shares, the specific number
of shares so referenced in this Agreement shall automatically be proportionally
adjusted to reflect the effect on the outstanding shares of such class or series
of stock by such subdivision, combination, or stock dividend.

         (k) Aggregation of Stock. All shares held or acquired by affiliated
entities or persons shall be aggregated together for the purpose of determining
the availability of any rights under this Agreement.

                             SIGNATURE PAGE FOLLOWS


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                  IN WITNESS WHEREOF, the parties have caused this Registration
Rights Agreement to be duly executed as of the date first written above.


THE COMPANY:                       KENNEDY-WILSON, INC.



                                   By:      /s/      Richard Mandell
                                         ---------------------------------------
                                         Name:       Richard Mandell
                                                 -------------------------------
                                         Title:      Managing Director
                                                 -------------------------------




THE PURCHASER:                     FBR ASSET INVESTMENT CORPORATION



                                   By:      /s/      William R. Swanson
                                         ---------------------------------------
                                         Name:       William R. Swanson
                                                 -------------------------------
                                         Title:      Chief Operating Officer
                                                 -------------------------------



                                       15