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                              KENNEDY-WILSON, INC.

                       12% SENIOR NOTE DUE JUNE 22, 2006


No. 1                                                        As of June 22, 2000

$10,000,000                                                           PPN 489399


        FOR VALUE RECEIVED, the undersigned, KENNEDY-WILSON, INC. (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to GATX CAPITAL CORP., or registered
assigns, the principal sum of TEN MILLION DOLLARS on June 22, 2006, with
interest (computed on the basis of a 360-day year and actual days elapsed) (a)
on the unpaid balance thereof at the rate of 12% per annum from the date
hereof, payable quarterly, on the last day of March, June, September and
December in each year, commencing with the June 30, 2000, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by
law on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of interest and any overdue payment of any Prepayment Premium
(as defined in the Note Purchase Agreements referred to below), payable
quarterly as aforesaid (or, at the option of the registered holder hereof, on
demand), at a rate per annum from time to time equal to 14%.

        Payments of principal of, interest on and any Prepayment Premium with
respect to this Note are to be made in lawful money of the United States of
America at 4 Embarcadero Center, Suite 2200, San Francisco, California 94111 or
at such other place as the Company shall have designated by written notice to
the holder of this Note as provided in the Note Purchase Agreements referred to
below.

        This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of June
22, 2000 (as from time to time amended, the "Note Purchase Agreements"),
between the Company and the respective Purchasers named therein and is entitled
to the benefits thereof. Each holder of this Note will be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 20 of the Note Purchase Agreements and (ii) to have made the
representation set forth in Section 6.2 of the Note Purchase Agreements.

        This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration or transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
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     This Note is subject to optional prepayment, in whole, at the times and on
the terms specified in the Note Purchase Agreements, but not otherwise.

     If an Event of Default, as defined in the Note Purchase Agreements, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Prepayment Premium) and with the effect provided in the Note Purchase
Agreements.

     This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.


                                        KENNEDY-WILSON, INC.



                                        By:  /s/ FREEMAN LYLE
                                            --------------------------------
                                             Name:  Freeman Lyle
                                             Title: Chief Financial Officer