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                                                                   EXHIBIT 10.46


                          THIRD MODIFICATION AGREEMENT


     The Third Modification Agreement ("Third Modification") is entered into as
of the 20th day of June, 2000 ("Agreement"), between Tokai Bank of California, a
California banking corporation (individually referred to as "Tokai" and a
"Lender" and in its capacity as Agent for Lenders, the "Agent"), and
Kennedy-Wilson, Inc., a Delaware corporation ("KW"), Kennedy-Wilson
International, Inc., a California corporation ("KWI"), Kennedy-Wilson
Properties, Ltd., a Delaware corporation ("KWPL"), and K-W Properties, Inc., a
California corporation ("KWP") (individually and collectively, "Borrower") with
reference to the following facts:

                                    RECITALS

     A.   Borrower, Lenders and Agent are parties to a certain Revolving Loan
Agreement dated as of July 2, 1999 (as amended, "Loan Agreement"), providing for
a line of credit in the aggregate principal sum of $15,000,000 ("Credit").

     B.   Borrower's obligations to Tokai, as a Lender under the Loan Agreement
are further evidenced by a certain Promissory Note dated July 2, 1999 ("Note"),
in the original principal sum of $10,000,000 ("Tokai's Commitment").

     The aforementioned Loan Agreement and Note and all other documents and
instruments executed in connection therewith are hereinafter individually and
collectively referred to as the "Loan Documents."

     C.   The Loan Agreement and the Note have heretofore been amended and/or
modified pursuant to the following:

          1.   That certain Modification Agreement dated as of November 15,
1999, by and among Tokai (acting as Agent and Lender), KW, KWI, KWPL and KWP.

          2.   That certain Second Modification Agreement dated as of February
28, 2000 by and among Tokai (acting as Agent and Lender), KW, KWI, KWPL and KWP.

     D.   Borrower has requested that Agent and Lenders amend the Loan Documents
to provide for, among other things, an extension of the Maturity Date, and to
permit Borrower to obtain additional credit from GATX and AON (collectively,
"Third Party Lender").

     E.   Agent and Lenders are willing to amend the Loan Documents subject to
the terms and conditions hereinafter set forth.


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     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

                                   AGREEMENT

     1.   Definitions. Capitalized terms used but not defined in this Agreement
shall have the meaning given to them in the Loan Agreement.

     2.   Amendments to Loan Agreement.

          2.1  In Section 1.1 of the Loan Agreement, the definition of "Maturity
Date" is amended in its entirety to read as follows:

               "Maturity Date" means the earlier of June 30, 2002 and the date
          on which a Change of Control occurs.

          2.2  Section 4.8(f) of the Loan Agreement is amended in its entirety
to read as follows:

               "(f) As soon as available, but in any event, within thirty (30)
          days of the end of each calendar year, projections by KW of the
          Financial Statements for KW and its subsidiaries, including
          projections for each business segment of such entities, for the
          succeeding calendar year on a quarterly basis, and on an annual basis
          for the following two (2) calendar years. These Financial Statements
          may be Borrower prepared."

          2.3  Section 4.8(m) of the Loan Agreement is amended to read as
follows:

               "(m) As soon as available, but in any event, within fifteen (15)
          days of the end of each calendar quarter, the following reports in
          format acceptable to Agent: (i) an acquisition report setting forth
          (x) the terms of each real estate and business acquisition, (y) income
          and expense projections for such acquisition, and (z) if applicable,
          the anticipated timing and amount for disposition of such asset; (ii)
          a budget variance report setting forth income, expense and
          income/expense ratios by business segment, and (iii) a report setting
          forth all investments by Borrower, including with Affiliates and other
          related parties and non-affiliates."

          2.4  The first full sentence of Section 4.13 of the Loan Agreement is
amended to read as follows:

          "Except as provided in this Section 4.13 or in Section 4.17 below,
          Borrower shall not have outstanding or incur any direct or contingent
          liabilities (other than to

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     Lenders), or become liable for the liabilities of others, without Lenders'
     written consent."

     2.5. Section 4.13(d) of the Loan Agreement is amended to read as follows:

          "(d) Liabilities and lines of credit in existence on the date of this
     Agreement disclosed in writing to Lenders and the Third Party Loan (as
     hereinafter defined) in accordance with Section 4.17, provided however,
     that, without the prior consent of Agent, at no time shall the aggregate
     amount of unsecured debt of KW and its subsidiaries exceed $33,000,000.00,
     including the lines of credit provided under this Agreement and by
     East-West Bank, plus the Third Party Loan.

     2.6  Article 4 of the Loan Agreement is amended to add a new Section 4.17
to read as follows:

          "4.17 Permitted Additional Debt. Notwithstanding anything to the
     contrary contained in Section 4.13, Borrower shall be permitted to obtain a
     loan ("Third Party Loan") from GATX and AON (collectively, "Third Party
     Lender"), subject to the satisfaction of each and all of the following
     conditions, any or all of which may be waived, in whole or in part by
     Agent, in its sole opinion and judgment, and all of which conditions must
     be satisfied (or waived by Agent) by no later than June 30, 2000:

                (a)  The Third Party Loan shall be in such amount and on such
          terms and conditions as are approved in writing by Agent, which
          approval may be given or withheld in Agent's sole opinion and
          judgment;

                (b)  Borrower, at its sole expense, delivers, deposits or causes
          to be delivered or deposited with Agent, true and complete copies of
          all loan documents and other documents to be executed or given by or
          on behalf of Borrower in connection with the Third Party Loan ("Third
          Party Loan Documents");

                (c)  The Third Party Loan Documents shall have been reviewed and
          approved in writing by Agent, which approval may be given or withheld
          in Agent's sole opinion and judgment, and the Third Party Loan
          Documents shall contain such revisions and modifications as Agent
          shall require, in its sole opinion and judgment;

                (d)  If requested by Agent, an intercreditor agreement in form
          and content satisfactory to Agent, in its sole opinion and judgment,
          shall be entered into by and among Third Party Lender, Lenders, Agent,


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                  Borrower and such other Persons as Agent shall require, in
                  its sole option and judgment; and

                        (e)   If any of the documents executed or given by or on
                  behalf of KW in connection with its line of credit with
                  East-West Bank ("East-West Loan Documents") are to be amended
                  or modified by reason of or in connection with the Third Party
                  Loan (including, without limitation, any amendments to or
                  modifications with respect to any financial covenants given by
                  Borrower to East-West Bank), then: (i) such proposed
                  amendments and any agreements relating thereto shall be
                  presented to Agent and shall be approved in writing by Agent,
                  which approval may be given or withheld in Agent's sole
                  opinion and judgment, and (ii) such proposed amendments and
                  any agreements relating thereto, if approved in writing by
                  Agent, shall be executed prior to or concurrently with this
                  Third Modification."

            2.7   Article 4 of the Loan Agreement is amended to add a new
Section 4.18 to read as follows:

                  "4.18 Additional Provisions Regarding Third Party Loan. If the
            Third Party Loan is obtained by Borrower in accordance with Section
            4.17, then each of the following shall apply:

                        (a)   Borrower shall, in addition to the financial
                  covenants set forth in Section 4.11 and any other covenants or
                  requirements under this Agreement, comply with each and all of
                  the financial covenants contained in the Third Party Loan
                  Documents.

                        (b)   If any of the financial covenants contained in the
                  East-West Loan Documents are amended or modified by reason of
                  or in connection the Third Party Loan, then Borrower shall, in
                  addition to the financial covenants set forth in Section 4.11
                  and any other covenants or requirements under this Agreement,
                  comply with each and all of the financial covenants contained
                  in the East-West Loan Documents, as amended or modified."

            2.8   Article 5 of the Loan Agreement is amended to add a new
Section 5.1(r) to read as follows:

                        "(r)  If the Third Party Loan shall be obtained by
                  Borrower, (i) KW shall fail to pay any principal of, premium
                  or interest on or any other amount payable to Third Party
                  Lender under the Third Party Loan when the same becomes due
                  and payable (whether at scheduled maturity, or by



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                    required prepayment, acceleration, demand or otherwise); or
                    (ii) any other event shall occur or condition shall exist
                    under any of the Third Party Loan Documents if the effect of
                    such event or condition is to permit the acceleration of the
                    maturity of amounts owed under the Third Party Loan (whether
                    or not such acceleration occurs)."

     3.   Amendment to Note.

               3.1  In Section 1.7 of the Note, the term "two hundred (200)
Basis Points" is hereby amended and changed to "three hundred (300) Basis
Points."

               3.2  In Section 1.10 is amended in its entirety to read as
follows:

                    "1.10   "Maturity Date" means the earlier of June 30, 2002
                    and the date on which a Change of Control (as defined in the
                    Loan Agreement) occurs."

     4.   Representations and Warranties.  Borrower hereby represents and
warrants to Agent and Lenders that: (i) no default specified in the Loan
Agreement and no event which with notice or lapse of time, or both, would
become such a default has occurred and is continuing; (ii) the representations
and warranties of Borrower pursuant to the Loan Agreement are true on and as of
the date hereof as if made on and as of said date; (iii) the making and
performance by Borrower of this Agreement have been duly authorized by all
necessary action; (iv) no consent, approval, authorization, permit or license
is required in connection with the making or performance of the Loan Agreement
as amended hereby; and (v) not less than $5,000,000.00 of the proceeds from the
Third Party Loan shall be paid to Lender to reduce the amount outstanding under
the Credit.

     5.   Conditions Precedent. This Amendment will be effective when Agent
receives the following items, in form and content acceptable to Agent in its
sole opinion and judgment:

          5.1  Evidence that Borrower has authority to carry out the
transactions contemplated by this Agreement.

          5.2  Lenders shall have received from Borrower, an amount equal to
all attorneys' fees and out-of-pocket expenses incurred by Lenders in
connection with the negotiation, preparation, execution, delivery, and
administration of this Agreement and any matter related thereto.

          5.3  Such other documents as may be required by Agent.




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     6.   Effect of Agreement. Except as provided in this Agreement, all of the
terms and conditions of the Loan Agreement shall remain in full force and
effect, and are hereby reaffirmed and ratified in their entirety.

     7.   No Further Advances. The parties agree that Lender will not make any
further advances under the Credit until such time as the parties agree to
further modifications to the Loan Agreement, including, but not limited, to
making certain covenants in the Third Party Loan Documents and East-West Loan
Documents consistent with those contained in the Loan Agreement.

          This Agreement is executed as of the date first above written.


                                     "Lender" and "Agent"

                                          Tokai Bank of California, a California
                                          banking corporation

                                          By: /s/ RICHARD FLORES
                                              ----------------------------------
                                          Name: Richard Flores
                                                --------------------------------
                                          Title: Regional Vice President
                                                 -------------------------------

                                     "Borrower"

                                          Kennedy-Wilson, Inc., a Delaware
                                          corporation

                                          By: /s/ FREEMAN LYLE
                                              ----------------------------------
                                          Name: Freeman Lyle
                                                --------------------------------
                                          Title: EVP CFO
                                                 -------------------------------

                                          Kennedy-Wilson, International, Inc., a
                                          California corporation

                                          By: /s/ FREEMAN LYLE
                                              ----------------------------------
                                          Name:
                                                --------------------------------
                                          Title: Director
                                                 -------------------------------

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                                        Kennedy-Wilson Properties, Ltd., a
                                        Delaware corporation



                                        By:    /s/ FREEMAN LYLE
                                               ----------------------------
                                        Name:
                                               ----------------------------
                                        Title: Director
                                               ----------------------------



                                        K-W Properties, Inc., a California
                                        corporation



                                        By:    /s/ FREEMAN LYLE
                                               ----------------------------
                                        Name:
                                               ----------------------------
                                        Title: Director
                                               ----------------------------

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