Document:

Exhibit 10.107

 

REPAYMENT GUARANTY

 

This REPAYMENT GUARANTY (this “Guaranty”) is
made as of September 4, 2007, by KENNEDY-WILSON, INC., a Delaware
corporation (“Guarantor”) in favor of WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking association, as agent for the “Lenders”
pursuant to the Loan Agreement described below (in such capacity, “Administrative
Agent”) and in favor of each party that now or hereafter is bound under the
Loan Agreement as a “Lender” (referred to herein individually as a “Lender”
and collectively as the “Lenders”).

 

1.                                   Except as
otherwise provided in this Guaranty, initially capitalized terms used in this
Guaranty without definition are defined in.that certain Loan Agreement of even
date herewith by and between One Baxter Way, L.P., a Delaware limited
partnership, and KW Portfolio XIII LLC, a Delaware limited liability company
(collectively, “Borrower”), Administrative Agent and Lenders (the “Loan Agreement”).

 

2.                                   In order to
induce Administrative Agent and Lenders to enter into the Loan Agreement and to
induce Lenders to loan to Borrower (whether acting on behalf of itself or any
estate created by the commencement of a case under Title 11 United States Code
or any successor statute thereto (the “Bankruptcy Code”) or
any other insolvency, bankruptcy, reorganization or liquidation proceeding, or
by any trustee under the Bankruptcy Code, liquidator, sequesirator or receiver
of Borrower or Borrower’s property or similar Person duly appointed pursuant to
any law generally governing any insolvency, bankruptcy, reorganization,
liquidation, receivership or like proceeding) the sum of $7,028,960.00 (the “Loan”),
evidenced by one or more secured promissory notes (collectively, the “Notes”),
in the aggregate principal amount of $7,028,960.00, each now or hereafter
executed by Borrower and payable to the order of one or more Lenders, Guarantor
hereby unconditionally and irrevocably guarantees to Administrative Agent and
Lenders and to their successors, endorsees and/or assigns, the Ml and prompt
payment of(a) the principal sum of the Notes in accordance with their
terms when due, by acceleration or otherwise, together with all interest
accrued thereon, when due under the terms of the Notes, and any and all other
sums of money that become owing by Borrower to Lenders under the Notes, Loan
Agreement or any other “Loan Document” as such term is defined in the Loan
Agreement (which Notes, Loan Agreement and other “Loan Documents” are also
collectively referred to herein as the “Loan Documents”) and (b) any
and all sums owing under any “Swap Contract” as such term is defined in the
Loan Agreement (“Swap Contract”). The obligations guaranteed pursuant to
this Section 2 are hereinafter referred to as the “Guaranteed
Obligations.”

 

3.                                   In accordance
with California Civil Code (“CC”) Section 2856:

 

(a)                              Guarantor
waives any and all rights of subrogation, reimbursement, indemnification and
contribution, and any other rights and defenses that are or may become
available to Guarantor by reason of CC Sections 2787 to 2855, inclusive, 2899 and 3433, including, without limitation,
any and all rights or defenses Guarantor may have by reason o. protection
afforded to the principal with respect to any of the Guaranteed Obligations or
to any other guarantor of any of the Guaranteed Obligations with respect to
such guarantor’s obligations

 

 

under its guaranty, in
either case, pursuant to the antideficiency or other laws of this state limiting or
discharging the principal’s indebtedness or such other guarantor’s obligations,
including, without limitation, California Code of Civil Procedure (“CC”)
Sections 580a, 580b, 580d or 726; and

 

(b)                             Guarantor
waives all rights and defenses that Guarantor may have because Borrower’s debt
is secured by real property. This means, among other things:

 

(i)                                Administrative
Agent and Lenders may collect from Guarantor without first foreclosing on any
real or personal property collateral pledged by Borrower

 

(ii)                             If
Administrative Agent or any Lender forecloses on any real property collateral
pledged by Borrower:

 

(A)                            The amount of
the debt may be reduced only by the price for which that collateral is sold at
the foreclosure sale, even if the collateral is worth more than the sale price;

 

(B)                              Administrative
Agent and Lenders may collect from Guarantor even if Administrative Agent or
any Lender, by foreclosing on the real property collateral, has destroyed any
right Guarantor may have to collect from Borrower.

 

This
is an unconditional and irrevocable waiver of any rights
and defenses Guarantor may have because Borrower’s debt is secured by real
property. These rights and defenses include, but are not limited
to, any rights or defenses based upon CCP Sections 580a, 580b, 580d, or 726; and

 

(c)                              Guarantor
waives all rights and defenses arising out of an election of remedies by
Administrative Agent or Lenders, even though that election of remedies, such as
a nonjudicial foreclosure with respect to security for the Guaranteed
Obligations, has destroyed Guarantor’s rights of subrogation and reimbursement
against Borrower by the operation of CCP Section 580d or otherwise, and
even though that election of remedies by Administrative Agent or Lenders has
destroyed Guarantor’s rights of contribution against another guarantor of any
of the Guaranteed Obligations.

 

No other provision of this
Guaranty shall be construed as limiting the generality of any of the covenants
and waivers set forth in this Section 3.

 

4.                                   Guarantor
represents and warrants to Administrative Agent and Lenders that Guarantor has
a finaneial interest in Borrower or is otherwise affiliated with Borrower. In
that regard, Guarantor agrees that Administrative Agent’s and Lenders’ entering
into the Loan Agreement and Lenders’ agreement to make the Loan to Borrower is
of substantial and material benefit to Guarantor and further agrees as follows:

 

 

(a)          Guarantor
shall continue to be liable under this Guaranty and the provisions hereof will
remain in full force and effect notwithstanding (i) any modification,
agreement or stipulation between Borrower and Administrative Agent or their
respective successors and assigns, with respect to the Loan Documents or the
Swap Contracts or the obligations encompassed thereby, including, without
limitation, the Guaranteed Obligations, (ii) Administrative Agent’s waiver
of or failure to enforce any of the terms, covenants or conditions contained in
the Loan Documents or the Swap Contracts or in any modification thereof; (iii) any discharge or release of
Borrower or any other guarantor from any liability with respect to the
Guaranteed Obligations, (iv) any discharge, release, exchange or
subordination of any real or personal property then held by Administrative
Agent or any Lender as security for the performance of the Guaranteed
Obligations, (v) any additional security taken for the Guaranteed
Obligations, whether real or personal property, (vi) any foreclosure or
other realization on any security for the Guaranteed Obligations, regardless of
the effect upon Guarantor’s subrogation, contribution or reimbursement rights
against Borrower or any other guarantor, (vii) any additional loans or
financial accommodations to Borrower or (viii) the manner or order by
which payments are applied to principal, interest or other obligations under
the Loan Documents and the Swap Contracts. Without limiting the generality of
the foregoing, Guarantor hereby waives the rights and benefits under CC Section 2819,
and agrees that by doing so Guarantor’s liability shall continue even if
Administrative Agent or any Lender alters any obligations under the Loan
Documents or the Swap Contracts in any respect or Administrative Agent’s or
Lenders’ remedies or rights against Borrower are in any way impaired or
suspended without Guarantor’s consent.

 

(b)                             Guarantor’s liability under this Guaranty
shall continue until all sums due under the Notes have been paid in full and
until all Guaranteed Obligations to Administrative Agent and Lenders have been
satisfied, and shall not be reduced by virtue of any payment by Borrower of any
amount due under the Notes or under any of the Loan Documents or Swap Contracts
or by Administrative Agent’s and Lenders’ recourse to any collateral or
security.

 

(c)                              Guarantor
represents and warrants to Administrative Agent and Lenders that Guarantor now
has and will continue to have full and complete access to any and all
information concerning the transactions contemplated by the Loan Documents or
Swap Contracts or referred to therein, the value of the assets owned or to be
acquired by Borrower, Borrower’s financial status and its ability to pay and
perform the Guaranteed Obligations owed to Administrative Agent and Lenders.
Guarantor further represents and warrants that Guarantor has reviewed and
approved copies of the Loan Documents and Swap Contracts and is fully informed
of the remedies Administrative Agent and Lenders may pursue, with or without
notice to Borrower, in the event of default under the Notes or other Loan
Documents or Swap Contracts. So long as any of the
Guaranteed Obligations remains unsatisfied or owing to Administrative Agent or
Lenders, Guarantor shall keep fully informed as to all aspects of Borrower’s
financial condition and the performance of the Guaranteed Obligations.

 

(d)                             Guarantor
acknowledges and agrees that Guarantor may be required to perform the
Guaranteed Obligations in accordance with the terms hereof notwithstanding the
fact 

 

 

that
the Loan has fully matured, that the outstanding principal balance thereof is
fully due and payable and that Borrower is in default of its obligation to pay
the full amount due under the Notes on the maturity thereof.

 

5.            The liability
of Guarantor under this Guaranty is a guaranty of payment and performance and
not of collectibility, and is not conditioned or contingent upon the
genuineness, validity; regularity or enforceability of the Loan Documents, Swap
Contracts or other instruments relating to the creation or performance of the
Guaranteed Obligations or the pursuit by Administrative Agent or any Lender of
any remedies which any now has or may hereafter have with respect thereto under
the Loan Documents or Swap Contracts, at law, in equity or otherwise. Guarantor
hereby waives any and all benefits and defenses under CC Section 2810 and
agrees that by doing so Guarantor shall be liable even if Borrower had no liability
at the time of execution of any of the Loan Documents or Swap Contracts or
thereafter ceases to be liable. Guarantor hereby waives any and all benefits
and defenses under CC Section 2809 and agrees that by doing so Guarantor’s
liability may be larger in amount and more burdensome than that of Borrower.
Guarantor’s liability hereunder shall not be limited or affected in any way by
any impairment or any diminution or loss of value of any security or collateral
for the Loan, whether caused by hazardous substances or otherwise,
Administrative Agent’s or any Lender’s failure to perfect a security interest
in such security or collateral or any disability or other defense of Borrower
or any other guarantor.

 

6.            Guarantor
hereby waives to the extent permitted by law: (i) all notices to
Guarantor, to Borrower, or to any other Person, including without limitation
notices of the acceptance of this Guaranty or the creation, renewal, extension,
modification, accrual of any of the Guaranteed Obligations owed to Administrative
Agent and Lenders, enforcement of any right or remedy with respect thereto and
notice of any other matters relating thereto; (ii) diligence and demand of
payment, presentment, protest, dishonor and notice of dishonor; (iii) any
statute of limitations affecting Guarantor’s liability hereunder or the
enforcement thereof and (iv) all principles or provisions of law which
conflict with the terms of this Guaranty. Guarantor further agrees that
Administrative Agent and Lenders may enforce this Guaranty upon the occurrence
of an event of default under the Notes or the other Loan Documents or Swap
Contracts (as event of default is described therein), notwithstanding the
existence of any dispute between Borrower and Administrative Agent or any
Lender with respect to the existence of said event of default or performance of
the Guaranteed Obligations or any counterclaim, set-off or other claim which
Borrower may allege against Administrative Agent or any Lender with respect
thereto. Moreover, Guarantor agrees that Guarantor’s obligations shall not be
affected by any circumstances which constitute a legal or equitable discharge
of a guarantor or surety.

 

7.            Guarantor
agrees that Administrative Agent and Lenders may enforce this Guaranty without
the necessity of resorting to or exhausting any security or collateral
(including, without limitation, pursuant to a judicial or nonjudicial
foreclosure) and without the necessity of proceeding against Borrower or any
other guarantor. Guarantor hereby waives any and all benefits under CC Sections
2845, 2849 and 2850, including,
without limitation, the right to require Administrative Agent or Lenders to
proceed against Borrower, to proceed against any other guarantor, to foreclose
any lien on any real or personal property, to exercise any right or remedy
under the Loan Documents and Swap Contracts, to draw upon any letter of credit
issued in connection herewith, or to pursue any other remedy or to enforce any
other right.

 

 

8.                                               (a)                            Guarantor agrees that nothing contained herein
shall prevent Administrative Agent and Lenders from suing on the Notes or from
exercising any rights. available to them under the Notes or under any of the
other Loan Documents or Swap Contracts and that the exercise of any of the
aforesaid rights will not constitute a legal or equitable discharge of
Guarantor. Guarantor understands that the exercise by Administrative Agent and
Lenders of certain rights and remedies contained in the Swap Contracts and Loan
Documents (such as a nonjudicial foreclosure) may affect or eliminate Guarantor’s
right of subrogation against Borrower and that Guarantor may therefore incur a
partially or totally non-reimbursable liability hereunder nevertheless,
Guarantor hereby authorizes and empowers Administrative Agent to exercise, in
its sole discretion, any rights and remedies, or any combination thereof, which
may then be available to Administrative Agent and Lenders, since it is the
intent and purpose of Guarantor that the obligations hereunder are absolute,
independent and unconditional under any and all circumstances. Guarantor
expressly waives any defense (which defense, if -Guarantor had not given this
waiver, Guarantor might otherwise have) to a judgment against Guarantor by
reason of a nonjudicial foreclosure sale. Without limiting the generality of
the foregoing, Guarantor hereby expressly waives any and all benefits and
defenses under (i) CCP Section 580a (which
Section, if Guarantor had not given this waiver, would otherwise limit
Guarantor’s liability after a nonjudicial foreclosure sale to the difference
between the obligations guaranteed herein and the fair market value of the
property or interests sold at such nonjudicial foreclosure sale), (ii) CCP
Sections 580b and 580d (which Sections, if Guarantor had not given this waiver,
would otherwise limit Lender’s right to recover a deficiency judgment with
respect to purchase money obligations and after a nonjudicial foreclosure sale,
respectively), and (iii) CCP Section 726 (which Section, if Guarantor
had not given this waiver, among other things, would otherwise require Lender
to exhaust all of its security before a personal judgment may be obtained for a
deficiency). Notwithstanding any foreclosure of the lien of any deed of trust
or security agreement with respect to any or all of the real or personal
property secured thereby, whether by the exercise of the power of sale
contained therein, by an action
for judicial foreclosure or by an acceptance of a deed in lieu of foreclosure, Guarantor shall remain bound under this
Guaranty. 

(b)                             Guarantor waives all benefits and
defenses under CC Sections 2847, 2848 and 2849 and agrees that Guarantor shall
have no right of subrogation against Borrower or against any collateral or
security provided for in the Loan Documents or Swap Contracts and no right of
reimbursement or contribution against any other guarantor unless and until all
Guaranteed Obligations have been indefeasibly paid and satisfied in full, and
Administrative Agent and Lenders have released, transferred or disposed of all
of their rights, title and interest in any collateral or security. To the
extent the waiver of Guarantor’s rights of subrogation, reimbursement and
contribution as set forth herein is found by a court of competent jurisdiction
to be void or voidable for any reason, Guarantor further agrees that Guarantor’s
rights of subrogation and reimbursement against Borrower and Guarantor’s rights
of subrogation against any collateral or security shall be junior and
subordinate to any rights Administrative Agent or Lenders may have against
Borrower and to all rights, title and interest Administrative Agent or Lenders
may have in such collateral or security, and Guarantor’s rights of contribution
against any other guarantor shall be junior and subordinate to any rights
Administrative Agent or Lenders may have against such other guarantor.
Administrative Agent and Lenders may use, sell or dispose of any item of
collateral or security as it sees fit without regard to Guarantor’s subrogation
and contribution rights, and upon disposition or sale of any item, Guarantor’s
rights 

 

 

with respect to such item
will terminate. Guarantor understands that Guarantor may record a Request for
Notice of Default pursuant to CC Section 2924(b) and thereby receive
notice of any proposed foreclosure of any real property collateral then
securing the Guaranteed Obligations. With respect to the foreclosure of any
security interest in any personal property collateral then securing the
Guaranteed Obligations, Administrative Agent and Lenders agree to give
Guarantor five (5) days’
prior written notice, in the manner set forth in Section 11 hereof, of any
sale or disposition of any such personal property collateral, other than
collateral which is perishable, threatens to decline speedily in value, is of a
type customarily sold on a recognized market, or is cash, cash equivalents,
certificates of deposit or the like.

 

(c)                              Guarantor’s
sole right with respect to any such foreclosure of real or personal property
collateral shall be to bid at such sale in accordance with applicable law.
Guarantor acknowledges and agrees that Administrative Agent or any Lender may
also bid at any such sale and in the event such collateral is sold to
Administrative Agent or any Lender in whole or in partial satisfaction of the
Guaranteed Obligations (or any portion thereof), Guarantor shall have no
further right or interest with respect thereto. Notwithstanding anything to the
contrary contained herein, no provision of this Guaranty shall be deemed to
limit, decrease, or in any way to diminish any rights of set-off Administrative
Agent and Lenders may have with respect to any cash, cash equivalents,
certificates of deposit, letters of credit or the like which may now or
hereafter be deposited with Administrative Agent or any Lender by Borrower.

 

(d)                              To the extent
any dispute exists at any time between or among Guarantor and any other
guarantor of the Guaranteed Obligations as to Guarantor’s or any other
guarantor’s right to contribution or otherwise, Guarantor agrees to indemnify,
defend and hold Administrative Agent and Lenders harmless from and against any
loss, damage, claim, demand, cost or any other liability (including, without
limitation, reasonable attorneys’ fees and costs) Administrative Agent and
Lenders may suffer as a result of such dispute;

 

(e)                              So long as any
of the Guaranteed Obligations are owing to Administrative Agent or any Lender,
Guarantor shall not, without the prior written consent of Administrative Agent,
commence or join with any other party in commencing any bankruptcy,
reorganization or insolvency proceedings of or against Borrower. The
obligations of Guarantor under this Guaranty shall not be altered, limited or
affected by any case, voluntary or involuntary, involving the bankruptcy,
insolvency, receivership, reorganization, liquidation or arrangement of
Borrower or by any defense which Borrower may have by reason of the order,
decree or decision of any court or administrative body resulting from any such
case. Administrative Agent shall have the sole right to accept or reject any
plan on behalf of Guarantor proposed in such case and to take any other action
which Guarantor would be entitled to take, including, without limitation, the
decision to file or not file a claim. Guarantor acknowledges and agrees that
any interest on the Guaranteed Obligations which accrues after the commencement
of any such proceeding (or, if interest on any portion of the Guaranteed
Obligations ceases to accrue by operation of law by reason of the commencement
of said proceeding, such interest as would have accrued on any such portion of
the Guaranteed Obligations if said proceedings had not been commenced) will be
included in the Guaranteed Obligations because it is the intention of the
parties that the Guaranteed Obligations should be determined without regard to
any rule or law or order which may relieve Borrower of any portion of such
Guaranteed Obligations. Guarantor hereby permits 

 

 

any trustee in bankruptcy, receiver, debtor
in possession, assignee for the benefit of creditors oi similar Person to pay
Administrative Agent and Lenders, or allow the claim of Administrative Agent
and Lenders in respect of, any such interest accruing after the date on which
such proceeding is commenced. Guarantor hereby assigns to Administrative Agent
(for the benefit of Lenders) Guarantor’s right to receive any payments from any
trustee in bankruptcy, receiver, debtor in possession, assignee for the benefit
of creditors or similar Person by way of dividend, adequate protection payment
or otherwise. If all or any portion of the Guaranteed Obligations are paid or
performed by Borrower, the obligations of Guarantor hereunder shall continue
and remain in full force and effect in the event that all or any part of such
payment(s) or performance(s) is avoided or recovered directly or
indirectly from Administrative Agent or Lenders as a preference, fraudulent
transfer or otherwise in such case irrespective of payment in full of all
obligations under the Loan Documents and Swap Contracts. 

 

9.                (a)         Guarantor
represents and warrants that any financial statements, tax returns or other
documents of Guarantor heretofore delivered to Administrative Agent are true
and correct in all material respects. Such statements were prepared in
accordance with generally accepted accounting principles, consistently applied
and fairly present the financial position of” Guarantor as of the date thereof.
Guarantor further represents and warrants that no material adverse change has
occurred in Guarantor’s financial position since the date of such statements.

 

(b)          Guarantor
covenants and agrees to provide Administrative Agent with any and all financial
information required by Administrative Agent pursuant to the Loan Agreement.
Guarantor further covenants and agrees to immediately notify Administrative
Agent of any material adverse change in Guarantor’s financial status.

 

10.          All notices,
requests and demands to be made hereunder to the parties hereto must be in
writing and given as provided in the notice provisions of the Loan Agreement
(at the addresses set forth below). 

	
  To
  Administrative Agent:

  	
   

  	
  Wachovia
  Bank, National Association

  
	
   

  	
   

  	
  Real
  Estate Financial Services 

  
	
   

  	
   

  	
  Mail
  Code: CA 6500

  
	
   

  	
   

  	
  l800Century
  Park East, Suite 500

  
	
   

  	
   

  	
  Los
  Angeles, CA 90067

  
	
   

  	
   

  	
  Attn:
  Real Estate Financial Services

  
	
   

  	
   

  	
  Telephone:
  (310) 789-8936

  
	
   

  	
   

  	
  Facsimile:
  (310) 789-8994

  
	
  To
  Guarantor:

  	
   

  	
  Kennedy-Wilson, Inc.

  
	
   

  	
   

  	
  9601
  Wilshire Boulevard, Suite 220

  
	
   

  	
   

  	
  Beverly
  Hills, California 90210

  
	
   

  	
   

  	
  Attention:
  Mary Ricks & John Prabhu

  
	
   

  	
   

  	
  Telephone:
  (310) 887-6437

  
	
   

  	
   

  	
  Facsimile:
  (310) 887-6409

  

 

11.                             Guarantor
represents and warrants to Administrative Agent and Lenders as follows:

 

(a)                                  No consent of
any other Person, including, without limitation, any 

 

 

creditors of Guarantor, and no license,
permit, approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority is
required by Guarantor in connection with this Guaranty or the execution,
delivery, performance, validity or enforceability of this Guaranty and all
obligations required hereunder. This Guaranty has been duly executed and
delivered by Guarantor, and constitutes the legally valid and binding
obligation of Guarantor enforceable against Guarantor in accordance with its
terms.

 

(b)                             The execution,
delivery and performance of this Guaranty will not violate any provision of any
existing law or regulation binding on Guarantor, or any order, judgment, award
or decree of any court, arbitrator or governmental authority binding on
Guarantor, or of any mortgage, indenture, lease, contract or other agreement,
instrument or undertaking to which Guarantor is a party or by which Guarantor
or any of its assets may be bound, and will not result in, or require, the
creation or imposition of any lien on any of Guarantor’s property, assets or
revenues pursuant to the provisions of any such mortgage, indenture, lease,
contract or other agreement, instrument or undertaking.

 

12.                                  Guarantor’s
performance of a portion, but not all, of the Guaranteed Obligations will in no way limit, affect, modify or abridge
Guarantor’s liability for that portion of the Guaranteed Obligations that is
not performed. Without in any way limiting the generality of the foregoing, in
the event that Administrative Agent or any Lender is awarded a judgment in any  suit brought to
enforce Guarantor’s covenant to perform a portion of the Guaranteed Obligation,
such judgment will in no way be deemed to release Guarantor from its covenant
to perform any portion of the Guaranteed Obligation which is not the subject of
such suit. 

 

13.                                    Guarantor
covenants and agrees to furnish to Administrative Agent, with sufficient copies
for each Lender which Administrative Agent shall distribute to the Lenders:

 

(a)                              as soon as the
same are available, and in any event within ninety (90) days after the end of
each fiscal year and sixty (60) days after the end of each interim quarterly
accounting period of the subject, a copy of the current financial statements of
Guarantor, which shall consist of (a) a balance sheet as of the end of the
relevant fiscal period, (b) statements of income and expenses of Guarantor
for such fiscal period (together, in each case, with the comparable figures for
the corresponding period of the previous fiscal year), (c) contingent
liabilities of Guarantor, and (d) cash flow statements of Guarantor. All
such financial statements of Guarantor shall be audited by a certified public
accountant satisfactory to Administrative Agent;

 

(b)                             copies of filed
federal income tax returns of Guarantor for each taxable year (with all K-ls
and other forms and supporting schedules attached), within thirty (30) days
after filing but in any event not later than one hundred twenty (120) days
after the close of each such taxable year (subject to extension); and

 

(c)                              Such other
information concerning Guarantor, and the assets, business, financial
condition, operations, property, prospects, and results of operations of
Guarantor, as Administrative Agent reasonably requests from time to time.

 

14.                                    Guarantor shall
at all times maintain a combined net worth of at least Fifteen

 

 

Million Dollars ($1 5,000,000) As used
herein, “net worth” shall mean an amount equal to the gross fair market value
of all of Guarantor’s assets (excluding any value for goodwill, trademarks,
patents, copyrights and other similar intangible items), less an amount equal
to all of Guarantor’s liabilities (including guaranties and other contingent
liabilities), all as reasonably determined by Administrative Agent.

 

15.           Guarantor shall
at all times maintain combined unencumbered liquid assets equal to at least
Seven Million Five Hundred Thousand Dollars ($7,500,000) “Liquid assets” means
the following assets of Guarantor: (i) Cash; (ii) certificates of
deposit or time deposits with terms of six (6) months or less; (iii) commercial
paper with a term of three (3) months or less; (iv) U.S. treasury bills and other
obligations of the federal government, all with terms of six (6) months or
less; (v) readily marketable securities (excluding “margin stock” (within
the meaning of Regulation U of the Board of Governors of the Federal Reserve
System), restricted stock and stock subject to the provisions of Rule 144
of the Securities and Exchange Commission); (vi) bankers’ acceptances
issued for terms of six (6) months
or less by financial institutions; (vii) repurchase agreements with terms
of six (6) months or less
covering U.S. government securities; (viii) unfunded capital commitments in Guarantor; and (ix) the
undrawn amounts under credit lines available for disbursement to Guarantor.

 

16.         This Guaranty is solely for the benefit of
Administrative Agent and Lenders and is not intended to nor may it be deemed to
be for the benefit of any third party, including Borrower.

 

17.          Guarantor
represents and warrants to Administrative Agent and Lenders as follows: 

 

(a)          Guarantor is a
corporation duly formed, validly existing and in good standing under the laws
of the State of Delaware, has the power to own its assets and to transact the
business in which it is now
engaged and is in good standing under the laws of each jurisdiction where its
ownership or lease of property or the conduct of its business requires such
qualification.

 

(b)          Guarantor has the power, authority and legal right
to execute, deliver and perform this Guaranty and all obligations required
hereunder and has taken all necessary action to authorize its execution,
delivery and performance of this Guaranty and all obligations required
hereunder. The execution, delivery and performance of this Guaranty will not
violate any of the formation or governing documents of Guarantor or of any laws
pursuant to which Guarantor has

been
formed.

 

18.         Guarantor hereby grants Administrative
Agent and Lenders a security interest in any personal property of Borrower in
which Guarantor hereafter acquires any right, title or interest. Guarantor
agrees that such security interest is additional security for the obligations
hereby guaranteed. Such security interest is superior to any right of Guarantor
in such personal property until all sums due under the Notes or other Loan
Documents and Swap Contracts have been repaid in full and all Guaranteed
Obligations have been fully satisfied.

 

19.          Administrative
Agent may assign this Guaranty with any Loan Document or Swap Contracts,
without in any way affecting Guarantor’s liability hereunder. Any married
person executing this Guaranty agrees that recourse may be had against
community property and 

 

 

separate property for the satisfaction of all
obligations hereby guaranteed. This Guaranty shall be binding upon-Guarantor,
Guarantor’s heirs, representatives, administrators, executors, successors and
assigns and shall inure to the benefit of and shall be enforceable by
Administrative Agent and Lenders, and their successors, endorsees and assigns.
As used herein, the singular includes the plural, and the masculine includes
the feminine and neuter and vice versa, if the context so requires.

 

20.             In the event of
any dispute or litigation regarding the enforcement or validity of this
Guaranty, Guarantor shall be obligated to pay all charges, costs and expenses
(including, without limitation, reasonable attorneys’ fees) incurred by
Administrative Agent and Lenders, whether or not any action or proceeding is
commenced regarding such dispute and whether or not such litigation is
prosecuted to judgment.

 

21.             THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA.

 

22.             To the maximum extent permitted by law, Guarantor,
Administrative Agent and Lenders hereby voluntarily, knowingly and
intentionally WAIVE ANY AND ALL RIGHTS TO TRIAL BY JURY in any legal action or proceeding arising under or in connection
with this Guaranty or any other Loan Document or Swap Contract or concerning
the Guaranteed Obligations and/or any collateral therefore or pertaining to any
transaction related to or contemplated in any Loan Document or Swap Contract,
regardless of whether such action or proceeding concerns any contractual or
tortious or other claim. Guarantor acknowledges that this waiver of jury trial
is a material inducement to Administrative Agent and Lenders entering into the
Loan Agreement and to Lenders in extending credit to Borrower, that
Administrative Agent and Lenders would not have entered into the Loan Agreement
and Lenders would not have extended such credit without this jury trial waiver,
and that Guarantor has been represented by an attorney or has had an
opportunity to consult with an attorney regarding this Guaranty and understands
the legal effect of this jury trial waiver.

 

23.             Guarantor hereby submits to the
jurisdiction of the state and federal courts in the State of California and
State of California for purposes of any action arising from or growing out of
this Guaranty, and further agrees that the venue of any such action may be laid
in King County, California, or Los Angeles County, California, and that (in
addition to any other method provided by law for service of process) service of
process in any such action may be made on Guarantor by the delivery of the
process to Kent Mouton, Esq., whose present address is 15303 Ventura
Boulevard, Suite 1400, Sherman Oaks, California 91403, whom Guarantor
hereby appoints as Guarantor’s agent for service of process. Nothing contained
in this Guaranty, however, shall be deemed to constitute, or to imply the
existence of, any agreement by Administrative Agent or Lenders to bring any
such action only in said courts or to restrict in any way any of Administrative
Agent’s and Lenders’ remedies or rights to enforce the terms of this Guaranty
as, when and where Administrative Agent shall deem appropriate, in its sole
discretion.

 

24.             No provision of this
Guaranty may be changed, waived, revoked or amended 

 

 

without Administrative Agent’s
prior written consent. Every provision of this Guaranty is intended to be
severable. If any term or provision hereof is declared to be illegal or invalid for any reason whatsoever
by a court of competent jurisdiction, such illegality or invalidity will not
affect the balance of the terms and provisions hereof, which terms and
provisions will remain binding and enforceable.

 

25.                               This Guaranty
may be executed in any number of counterparts each of which shall be deemed an
original and all of which shall constitute one and the same guaranty with the
same effect as if all parties had signed the same signature page. Any signature
page of this Guaranty may be detached from any counterpart of this
Guaranty and reattached to any other counterpart of this Guaranty identical in
form hereto but having attached to it one or more additional signature pages. 

 

26.                               No failure or
delay on the part of Administrative Agent or Lenders to exercise any power,
right or privilege under this Guaranty will impair any such power, right or
privilege, or be construed to be a waiver of any default or an acquiescence therein,
nor will any single or partial exercise of such power, right or privilege
preclude other or further exercise thereof or of any other right, power or
privilege.

 

27.                               This Guaranty
embodies the entire agreement among the parties hereto with respect to the
matters set forth herein, and supersedes all prior agreements among the parties
with respect to the matters set forth herein. No course of prior dealing among
the parties, no usage of trade, and no part or extrinsic evidence of any nature
may be used to supplement, modify or vary any of the terms hereof. There are no
conditions to the full effectiveness of this Guaranty.

 

28.                               This Guaranty
is in addition to all other guaranties of Guarantor and any other guarantors of
Borrower’s obligations to Administrative Agent and Lenders.

 

29.          GUARANTOR ACKNOWLEDGES THAT GUARANTOR
HAS BEEN AFFORDED THE OPPORTUNITY TO READ
THIS DOCUMENT CAREFULLY AND TO REVIEW IT WITH AN ATTORNEY OF GUARANTOR’S CHOICE BEFORE SIGNING
IT. GUARANTOR ACKNOWLEDGES HAVING READ AND UNDERSTOOD THE MEANING AND
EFFECT OF THIS DOCUMENT BEFORE SIGNING IT.

 

30.                               When two or
more persons or entities have executed this Guaranty, unless the context
clearly indicates otherwise, all references herein to “Guarantor” shall
mean the guarantors hereunder or either or any of them. All of the obligations
and liabilities of said guarantors under this Guaranty (and the obligations of
other guarantors under any similar or other guaranties of part or all of the
Guaranteed Obligations) shall be joint and several. Suit may be brought against
said guarantors, jointly and severally, or against any one or more of them
(even if less than all), without impairing the rights of Administrative Agent
and Lenders against the other or others of said guarantors; and Administrative
Agent may settle with any one or more of said guarantors for such sums or sum
as it may see fit and/or Administrative Agent may release any of said
guarantors from all further liability to Administrative Agent and Lenders for
such indebtedness without impairing the right of Administrative Agent and 

 

 

Lenders to demand and collect the balance of such indebtedness from the
other or others of said guarantors not so released; but it is agreed among said
guarantors themselves, however, that such settlement and release shall in no
way impair the rights of said guarantors as among themselves. 

 

(Signatures on Following Page]

 

 

IN WITNESS WHEREOF, Guarantor has executed this
Guaranty as of the date first above written.

 

	
  “Guarantor”

  	
   

  
	
   

  	
   

  
	
  KWI
  PROPERTY FUND I., L.P.

  	
   

  
	
  a
  Delaware limited partnership

  	
   

  
	
   

  	
   

  
	
  By:
  

  	
  Kennedy
  Wilson Property Services, Inc.

  	
   

  
	
   

  	
  a
  Delaware corporation,

  	
   

  
	
   

  	
  its
  sole general partner

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  John C. Prabu

  	
   

  
	
   

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  KWI
  PROPERTY FUND II., L.P.

  	
   

  
	
  a
  Delaware limited partnership

  	
   

  
	
   

  	
   

  
	
  By:
  

  	
  Kennedy
  Wilson Property Services, Inc.

  	
   

  
	
   

  	
  a
  Delaware corporation,

  	
   

  
	
   

  	
  its
  sole general partner

  	
   

  
	
   

  	
   

  
	
  By:
  

  	
  /s/
  John C. Prabu

  	
   

  
	
   

  	
  Vice
  PresidentExhibit 10.108

 

COMMERCIAL
GUARANTY

 

	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No.

  	
   

  	
  Call / Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  7-10

  	
   

  	
  Initials

  
	
   

  
	
  References in the boxes above are for Lender’s use only and do not
  limit the applicability of this document to any particular loan or lie An
  item above containing **** has been omitted due to text length limitations

  

 

	
  Borrower:

  	
  Windscape Village LLC, a California limited 

  	
   

  	
   

  	
   

  
	
   

  	
  liability company

  	
   

  	
   

  	
   

  
	
   

  	
  9601 Wilshire Boulevard, Suite 220

  	
   

  	
  Lender:

  	
  Pacific Western Bank 

  
	
   

  	
  Beverly Hills, CA 90210

  	
   

  	
   

  	
  Beverly Hills Office

  
	
   

  	
   

  	
   

  	
   

  	
  9454 Wilshire Boulevard 

  
	
  Guarantor: 

  	
  Kennedy-Wilson, Inc., a Delaware corporation

  9601 Wilshire Boulevard, Suite 220

  	
   

  	
   

  	
  Beverly Hills, CA 90212

  
	
   

  	
  Beverly Hills, CA 90210

  	
   

  	
   

  	
   

  

 

CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE.
For good and valuable consideration, Guarantor absolutely and unconditionally
guarantees full and punctual payment and satisfaction of the Indebtedness of
Borrower to Lender, and the performance and discharge of all Borrower’s
obligations under the Note and the Related Documents. This is a guaranty of
payment and performance and not of collection, so Lender can enforce this
Guaranty against Guarantor even when Lender has not exhausted Lender’s remedies
against anyone else obligated to pay the Indebtedness or against any collateral
securing the Indebtedness, this Guaranty or any other guaranty of the
Indebtedness. Guarantor will make any payments to Lender or its order, on
demand, in legal tender of the United States of America, in same-day funds,
without set-off or deduction or counterclaim, and wilt otherwise perform
Borrower’s obligations under the Note and Related Documents. Under this
Guaranty, Guarantor’s liability is unlimited and Guarantor’s obligations are
continuing.

 

INDEBTEDNESS.
The word “indebtedness” as used in this Guaranty means all of the principal
amount outstanding from time to time and at any one or more times, accrued
unpaid interest thereon and all collection costs and legal expenses related
thereto permitted by law, attorneys’ fees, arising from any and all debts,
liabilities and obligations of every nature or form, now existing or hereafter
arising or acquired, that Borrower individually or collectively or
interchangeably with others, owes or will owe Lender. “Indebtedness” includes,
without limitation, loans, advances, debts, overdraft indebtedness, credit card
indebtedness, lease obligations, liabilities and obligations under any interest
rate protection agreements or foreign currency exchange agreements or commodity
price protection agreements, other obligations, and liabilities of Borrower,
and any present or future judgments against Borrower, future advances, loans or
transactions that renew, extend, modify, refinance, consolidate or substitute
these debts, liabilities and obligations whether: voluntarily or involuntarily
incurred; due or to become due by their terms or acceleration; absolute or
contingent; liquidated or unliquidated; determined or undetermined; direct or
indirect; primary or secondary in nature or arising from a guaranty or surety;
secured or unsecured; joint or several or joint and several; evidenced by a
negotiable or non-negotiable instrument or writing; originated by Lender or
another or others; barred or unenforceable against Borrower for any reason
whatsoever; for any transactions that may be voidable for any reason (such as
infancy, insanity, ultra vires or otherwise); and originated then reduced Of
extinguished and then afterwards increased or reinstated.

 

If Lender presently holds one or more
guaranties, or hereafter receives additional guaranties from Guarantor, Lender’s
rights under all guaranties shall be cumulative. This Guaranty shall not
(unless specifically provided below to the contrary) affect or invalidate any
such other guaranties. Guarantor’s liability will be Guarantor’s aggregate
liability under the terms of this Guaranty and any such other unterminated
guaranties.

 

CONTINUING GUARANTY.
THIS IS A “CONTINUING GUARANTY” UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE
FULL AND PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE INDEBTEDNESS OF
BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR ACQUIRED, ON AN OPEN
AND CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE INDEBTEDNESS WILL
NOT DISCHARGE OR DIMINISH GUARANTOR’S OBLIGATIONS AND LIABILITY UNDER THIS
GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN WHEN ALL OR PART OF
THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME TO TIME.

 

DURATION OF GUARANTY.
This Guaranty will take effect when received by Lender without the necessity of
any acceptance by Lender, or any notice to Guarantor or to Borrower, and will
continue in full force until all the Indebtedness incurred or contracted before
receipt by Lender of any notice of revocation shall have been fully and finally
paid and satisfied and all of Guarantor’s other obligations under this Guaranty
shall have been performed in full. If Guarantor elects to revoke this Guaranty,
Guarantor may only do so in writing. Guarantor’s written notice of revocation
must be mailed to Lender, by certified mail, at Lender’s address listed above
or such other place as Lender may designate in writing. Written revocation of
this Guaranty will apply only to new Indebtedness created after actual receipt
by Lender of Guarantor’s written revocation. For this purpose and without
limitation, the term “new Indebtedness” does not include the Indebtedness which
at the time of notice of revocation is contingent, unliquidated, undetermined
or not due and which later becomes absolute, liquidated, determined or due. For
this purpose and without limitation, “new Indebtedness” does not include all or
part of the Indebtedness that is: incurred by Borrower prior to revocation;
incurred under a commitment that became binding before revocation; any
renewals, extensions, substitutions, and modifications of the Indebtedness.
This Guaranty shall bind Guarantor’s estate as to the Indebtedness created both
before and after Guarantor’s death or incapacity, regardless of Lender’s actual
notice of Guarantor’s death. Subject to the foregoing, Guarantor’s executor or
administrator or other legal representative may terminate this Guaranty in the
same manner in which Guarantor might have terminated it and with the same
effect. Release of any other guarantor or termination of any other guaranty of
the Indebtedness shall not affect the liability of Guarantor under this
Guaranty. A revocation Lender receives from any one or more Guarantors shall
not affect the liability of any remaining Guarantors under this Guaranty.
Guarantor’s obligations under this Guaranty shall be in addition to any of
Guarantor’s obligations, or any of them, under any other guaranties of the
Indebtedness or any other person heretofore or hereafter given to Lender unless
such other guaranties are modified or revoked in writing; and this Guarantor
shall not, unless provided in this Guaranty, affect, invalidate, or supersede
any such other guaranty. It is anticipated that fluctuations may occur in the
aggregate amount of the Indebtedness covered by this Guaranty, and Guarantor
specifically acknowledges and agrees that reductions in the amount of the
Indebtedness, even to zero dollars ($0.00), shall not constitute a termination
of this Guaranty, This Guaranty is binding upon Guarantor and Guarantor’s
heirs, successors and assigns so long as any of the Indebtedness remains unpaid
and even though the Indebtedness may from time to time be zero dollars 450.00).

 

GUARANTOR’S AUTHORIZATION TO LENDER.
Guarantor authorizes Lender, either before or after any revocation hereof,
without notice or demand and without lessening Guarantor’s liability under this
Guaranty, from time to time: (A) prior to revocation as set forth above,
to make one or more additional secured or unsecured loans to Borrower, to lease
equipment or other goods to Borrower, or otherwise to extend additional credit
to Borrower; (B) to alter, compromise, renew, extend, accelerate, or
otherwise change one or more times the time for payment or other terms of the
Indebtedness or any part of the Indebtedness, including increases and decreases
of the rate of interest on the Indebtedness; extensions may be repeated and may
be for longer than the original loan term; (C) to take and hold security
for the payment of this Guaranty or the Indebtedness, and exchange, enforce,
waive, subordinate, fail or decide not to perfect, and release any such
security, with or without the substitution of new collateral; (D) to
release, substitute, agree not to sue, or deal with any one or more of Borrower’s
sureties, endorsers, or other guarantors on any terms or in any manner Lender
may choose; (E) to
determine how, when and what application of payments and credits shall be made
on the Indebtedness; (F) to apply such security and direct the order or
manner of sale thereof, including

 

 

	
  Loan No:
  99185256449

  	
   

  	
   

  	
   

  	
   

  

 

without limitation, any nonjudicial sale
permitted by the terms of the controlling security agreement or deed of trust,
as Lender in its discretion may determine; (G) to sell, transfer, assign
or grant participations in all or any part of the Indebtedness; and (H) to
assign or transfer this Guaranty in whole or in part.

 

GUARANTOR’S REPRESENTATIONS AND WARRANTIES.
Guarantor represents and warrants to Lender that (A) no representations or
agreements of any kind have been made to Guarantor which would limit or qualify
in any way the terms of this Guaranty; (B) this Guaranty is executed at
Borrower’s request and not at the request of Lender; (C) Guarantor has
full power, right and authority to enter into this Guaranty; (D) the provisions
of this Guaranty do not conflict with or result in a default under any
agreement or other instrument binding upon Guarantor and do not result in a
violation of any taw, regulation, court decree or order applicable to
Guarantor; (E) Guarantor has not and will not without the prior written
consent of Lender, sell, lease, assign, encumber, hypothecate, transfer, or
otherwise dispose of all or substantially all of Guarantor’s assets, or any
interest therein; (F) upon Lender’s request, Guarantor will provide to
Lender financial and credit information in form acceptable to Lender, and all
such financial information which currently has been, and all future financial
information which will be provided to Lender is and will be true and correct in
all material respects and fairly present Guarantor’s financial condition as of
the dates the financial information is provided; (G) no material adverse
change has occurred in Guarantor’s financial condition since the date of the
most recent financial statements provided to Lender and no event has occurred
which may materially adversely affect Guarantor’s financial condition; (H) no
litigation, claim, investigation, administrative proceeding or similar action
(including those for unpaid taxes) against Guarantor is pending or threatened; (I) Lender
has made no representation to Guarantor as to the creditworthiness of Borrower;
and (J) Guarantor has established adequate means of obtaining from
Borrower on a continuing basis information regarding Borrower’s financial condition.
Guarantor agrees to keep adequately informed from such means of any facts,
events, or circumstances which might in any way affect Guarantor’s risks under
this Guaranty, and Guarantor further agrees that, absent a request for
information, Lender shall have no obligation to disclose to Guarantor any
information or documents acquired by Lender in the course of its relationship
with Borrower.

 

GUARANTOR’S FINANCIAL STATEMENTS.
Guarantor agrees to furnish Lender with the following:

 

Additional
Requirements.

 

ANNUAL STATEMENTS. Guarantor to provide Lender with, as soon as
available, but in no event later than ninety (90) days after the end of each
fiscal year end, a self-prepared consolidated balance sheet and income
statement for the period ended in form satisfactory to Lender. Statements may
be due more often if requested by Lender.

 

All financial reports required to be provided
under this Guaranty shall be prepared in accordance with GAAP, applied on a
consistent basis, and certified by Guarantor as being true and correct.

 

GUARANTOR’S WAIVERS.
Except as prohibited by applicable law, Guarantor waives any right to require
Lender to (A) make any presentment, protest, demand, or notice of any kind,
including notice of change of any terms of repayment of the Indebtedness,
default by Borrower or any other guarantor or surety, any action or nonaction
taken by Borrower, Lender, or any other guarantor or surety of Borrower, or the
creation of new or additional Indebtedness; (B) proceed against any
person, including Borrower, before proceeding against Guarantor; (C) proceed
against any collateral for the Indebtedness, including Borrower’s collateral,
before proceeding against Guarantor; (D) apply any payments or proceeds
received against the Indebtedness in any order; (E) give notice of the terms,
time, and place of any sale of the collateral pursuant to the Uniform
Commercial Code or any other law governing such sale; (F) disclose any
information about the Indebtedness, the Borrower, the collateral, or any other
guarantor or surety, or about any action or nonaction of Lender; or (G) pursue
any remedy or course of action in Lender’s power whatsoever.

 

Guarantor also waives any and all rights or
defenses arising by reason of (H) any disability or other defense of
Borrower, any other guarantor or surety or any other person; (l) the
cessation from any cause whatsoever, other than payment in full, of the
Indebtedness; (J) the application of proceeds of the indebtedness by
Borrower for purposes other than the purposes understood and intended by
Guarantor and Lender; (K) any act of omission or commission by Lender
which directly or indirectly results in or contributes to the discharge of
Borrower or any other guarantor or surety, or the Indebtedness, or the loss or
release of any collateral by operation of law or otherwise; (L) any
statute of limitations in any action under this Guaranty or on the
Indebtedness; or (M) any modification or change in terms of the
Indebtedness, whatsoever, including without limitation, the renewal, extension,
acceleration, or other change in the time payment of the Indebtedness is due
and any change in the interest rate, and including any such modification or
change in terms after revocation of this Guaranty on the Indebtedness incurred
prior to such revocation.

 

Guarantor waives all rights of subrogation,
reimbursement, indemnification, and contribution and any other rights and
defenses that are or may become available to Guarantor by reason of California
Civil Code Sections 2787 to 2855, inclusive.

 

Guarantor waives all rights and any defenses
arising out of an election of remedies by Lender even though that the election
of remedies, such as a non-judicial foreclosure with respect to security for a
guaranteed obligation, has destroyed Guarantor’s rights of subrogation and
reimbursement against Borrower by operation of Section 580d of the
California Code of Civil Procedure or otherwise.

 

Guarantor waives all rights and defenses that
Guarantor may have because Borrower’s obligation is secured by real property.
This means among other things: (N) Lender may collect from Guarantor
without first foreclosing on any real or personal property collateral pledged
by Borrower. (0) If Lender forecloses on any real property collateral pledged
by Borrower: (1) the amount of Borrower’s obligation may be reduced only
by the price for which the collateral is sold at the foreclosure sale, even if
the collateral is worth more than the sale price. (2) Lender may collect
from Guarantor even if Lender, by foreclosing on the real property collateral,
has destroyed any right Guarantor may have to collect from Borrower. This is an
unconditional and irrevocable waiver of any rights and defenses Guarantor may
have because Borrower’s obligation is secured by real property. These rights
and defenses include, but are not limited to, any rights and defenses based
upon Section 580a, 580b, 580d, or 726 of the Code of Civil Procedure.

 

Guarantor understands and agrees that the
foregoing waivers are unconditional and irrevocable waivers of substantive
rights and defenses to which Guarantor might otherwise be entitled under state
and federal law. The rights and defenses waived include, without limitation,
those provided by California laws of suretyship and guaranty, anti-deficiency
laws, and the Uniform Commercial Code. Guarantor acknowledges that Guarantor
has provided these waivers of rights and defenses with the intention that they
be fully relied upon by Lender. Guarantor further understands and agrees that
this Guaranty is a separate and independent contract between Guarantor and
Lender, given for full and ample consideration, and is enforceable on its own
terms. Until all of the Indebtedness is paid in full, Guarantor waives any
right to enforce any remedy Guarantor may have against the Borrower or any
other guarantor, surety, or other person, and further, Guarantor waives any
right to participate in any collateral for the Indebtedness now or hereafter
held by Lender.

 

Guarantor’s Understanding With Respect To
Waivers. Guarantor warrants and agrees that each of the waivers sat forth above
is made with Guarantor’s full knowledge of its significance and consequences
and that, under the circumstances, the waivers are reasonable and not contrary
to public policy or law. If any such waiver is determined to be contrary to any
applicable law or public policy, such waiver shall be effective only to the
extent permitted by law or public policy.

 

Subordination of Borrower’s Debts to Guarantor.
Guarantor agrees that the Indebtedness, whether now existing or hereafter
created, shall be superior to any claim that Guarantor may now have or
hereafter acquire against Borrower, whether or not Borrower becomes insolvent.

 

2

 

Guarantor hereby expressly subordinates any
claim Guarantor may have against Borrower, upon any account whatsoever, to any
claim that Lender may now or hereafter have against Borrower. in the event of
insolvency and consequent liquidation of the assets of Borrower, through
bankruptcy, by an assignment for the benefit of creditors, by voluntary
liquidation, or otherwise, the assets of Borrower applicable to the payment of
the claims of both Lender and Guarantor shall be paid to Lender and shall be
first applied by Lender to the Indebtedness. Guarantor does hereby assign to
Lender all claims which it may have or acquire against Borrower or against any assignee or trustee in bankruptcy of
Borrower; provided however, that such assignment shall be effective only for
the purpose of assuring to Lender full payment in legal tender of the
Indebtedness. If Lender so requests, any notes or credit agreements now or
hereafter evidencing any debts or obligations of Borrower to Guarantor shall be
marked with a legend that the same are subject to this Guaranty and shall be
delivered to Lender. Guarantor agrees, and Lender is hereby authorized, in the
name of Guarantor, from time to time to file financing statements and
continuation statements and to execute documents and to take such other actions
as Lender deems necessary or appropriate to perfect, preserve and enforce its
rights under this Guaranty.

 

Miscellaneous Provisions.
The following miscellaneous provisions are a part of this Guaranty:

 

AMENDMENTS.
This Guaranty, together with any Related
Documents, constitutes the entire understanding and agreement of the parties as
to the matters set forth in this Guaranty. No alteration of or amendment to
this Guaranty shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or amendment.

 

ATTORNEYS FEES; EXPENSES. Guarantor agrees to pay upon demand all of
Lender’s costs and expenses, including Lender’s attorneys’ fees and Lender’s
legal expenses, incurred in connection with the enforcement of this Guaranty.
Lender may hire or pay someone else to help enforce this Guaranty, and
Guarantor shall pay the costs and expenses of
such enforcement. Costs and expenses include Lender’s attorneys’ fees and legal
expenses whether or not there is a lawsuit, including attorneys’ fees and legal
expenses for bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated post-judgment
collection services. Guarantor also shall pay all court costs and such additional
fees as may be directed by the court.

 

CAPTION HEADINGS. Caption headings in this Guaranty are for
convenience purposes only and are not to be used to interpret or define the
provisions of this Guaranty.

 

GOVERNING LAW. This Guaranty will be governed by federal law
applicable to Lender end, to the extent not preempted by federal law, the laws
of the State of California without regard to its conflicts of law provisions.

 

CHOICE OF VENUE. if there is a lawsuit, Guarantor agrees upon
Lender’s request to submit to the jurisdiction of the courts of Los Angeles
County, State of California.

 

INTEGRATION.
Guarantor further agrees that Guarantor has read and fully understands the
terms of this Guaranty; Guarantor has had the opportunity to be advised by Guarantor’s
attorney with respect to this Guaranty; the Guaranty fully reflects Guarantor’s
intentions and parol evidence is not required to interpret the terms of this
Guaranty. Guarantor hereby indemnifies and holds Lender harmless from all
losses, claims, damages, and costs (including Lender’s attorneys’ fees)
suffered or incurred by Lender as a result of any breach by Guarantor of the
warranties, representations and agreements of this paragraph.

 

INTERPRETATION.
In all cases where there is more than one Borrower or Guarantor, then all words
used in this Guaranty in the singular shall be deemed to have been used in the
plural where the context and construction so require; and where there is more
than one Borrower named in this Guaranty or when this Guaranty is executed by
more than one Guarantor, the words “Borrower” and “Guarantor” respectively
shall mean all and any one or more of them. The words “Guarantor,” “Borrower,”
and “Lender” include the heirs, successors, assigns, and transferees of each of
them. If a court finds that any provision of this Guaranty is not valid or
should not be enforced, that fact by itself will not mean that the rest of this
Guaranty will not be valid or enforced. Therefore, a court will enforce the
rest of the provisions of this Guaranty even if a provision of this Guaranty
may be found to be invalid or unenforceable. If any one or more of Borrower or
Guarantor are corporations, partnerships, limited liability companies, or
similar entities, it is not necessary for Lender to inquire into the powers of
Borrower or Guarantor or of the officers, directors, partners, managers, or
other agents acting or purporting to act on their behalf, and any indebtedness
made or created in reliance upon the professed exercise of such powers shall be
guaranteed under this Guaranty.

 

NOTICES.
Any notice required to be given under this Guaranty shall be given in writing,
and, except for revocation notices by Guarantor, shall be effective when
actually delivered, when actually received by telefacsimiie (unless otherwise
required by law}, when deposited with a nationally recognized overnight
courier, or, if mailed, when deposited in the United States mail, as first
class, certified or registered mail postage prepaid, directed to the addresses
shown near the beginning of this Guaranty. All revocation notices by Guarantor
shall be in writing and shall be effective upon delivery to Lender as provided
in the section of this Guaranty entitled “DURATION OF GUARANTY.” Any party may
change its address for notices under this Guaranty by giving formal written
notice to the other parties, specifying that the purpose of the notice is to
change the party’s address. For notice purposes, Guarantor agrees to keep
Lender informed at all times of Guarantor’s current address. Unless otherwise
provided or required by law, if there is more than one Guarantor, any notice
given by Lender to any Guarantor is deemed to be notice given to all
Guarantors.

 

NO WAIVER BY LENDER.  Lender
shall not be deemed to have waived any rights under this Guaranty unless such
waiver is given in writing and signed by Lender. No delay or omission on the
part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by
Lender of a provision of this Guaranty shall not prejudice or constitute a
waiver of Lender’s right otherwise to demand strict compliance with that
provision or any other provision of this Guaranty. No prior waiver by Lender,
nor any course of dealing between Lender and Guarantor, shall constitute a
waiver of any of Lender’s rights or of any of Guarantor’s obligations as to any
future transactions. Whenever the consent of Lender is required under this
Guaranty, the granting of such consent by Lender in any instance shall not
constitute continuing consent to subsequent instances where such consent is
required and in all cases such consent may be granted or withheld in the sole
discretion of Lender.

 

SUCCESSORS AND ASSIGNS.
Subject to any limitations stated in this Guaranty on transfer of Guarantor’s interest,
this Guaranty shall be binding upon and inure to the benefit of the parties,
their successors and assigns.

 

Definitions.
The following capitalized words and terms shall have the following meanings
when used in this Guaranty. Unless specifically stated to the contrary, all
references to dollar amounts shall mean amounts in lawful money of the United
States of America. Words and terms used in the singular shall include the
plural, and the plural shall include the singular, as the context may require.
Words and terms not otherwise defined in this Guaranty shall have the meanings
attributed to such terms in the Uniform Commercial Code:

 

BORROWER.
The word “Borrower” means Windscape Village LLC, a California limited liability
company and includes all co-signers and co-makers signing the Note and all
their successors and assigns.

 

GAAP. The word “GAAP” means generally accepted
accounting principles.

 

GUARANTOR.
The word “Guarantor” means everyone signing this Guaranty, including without
limitation Kennedy-Wilson, Inc., a Delaware corporation, and in each case,
any signer’s successors and assigns.

 

3

 

GUARANTY.
The word ‘Guaranty” means this guaranty from Guarantor to Lender.

 

INDEBTEDNESS.
The word “Indebtedness’ means Borrower’s indebtedness to Lender as more
particularly described in this Guaranty, LENDER. The
word ‘Lender” means Pacific Western Bank, its successors and assigns.

 

NOTE. The word “Note” means and includes without limitation all
of Borrower’s promissory notes and/or credit agreements evidencing Borrower’s
loan obligations in favor of Lender, together with all renewals of, extensions
of, modifications of, refinancings of, consolidations of and substitutions for
promissory notes or credit agreements.

 

RELATED
DOCUMENTS. The words “Related
Documents” mean all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds of
trust, security deeds, collateral mortgages, and all other instruments,
agreements and documents, whether now or hereafter existing, executed in
connection with the Indebtedness.

 

EACH
UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR
UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR’S EXECUTION AND
DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL
TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED “DURATION OF
GUARANTY”. NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS
DATED SEPTEMBER 13, 2007.

 

	
  GUARANTOR:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  KENNEDY-WILSON,
  INC., A DELAWARE CORPORATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Wiliam J. McMorrow

  	
   

  	
  /s/ Freeman A. Lyle

  
	
   

  	
  William .1. McMorrow, CEO of Kennedy-Wilson, Inc.,

  	
   

  	
  Freeman A. Lyle,
  CFO/Secretary of Kennedy-Wlson, Inc.,

  
	
   

  	
  a Delaware
  corporation

  	
   

  	
  a Delaware
  corporation

  

 

4

 

NOTICE OF FINAL AGREEMENT

 

	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No.

  	
   

  	
  Call / Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  7-10

  	
   

  	
  Initials

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  References in the boxes above are for Lender’s use only and do not
  limit the applicability of this document to any particular loan or lie An
  item above containing **** has been omitted due to text length limitations

  

 

	
  Borrower:

  	
  Windscape Village LLC,
  a California limited 

  	
   

  	
  Lender:

  	
  Pacific Western Bank

  
	
   

  	
  liability company

  	
   

  	
   

  	
  Beverly Hills
  Office

  
	
   

  	
  9601 Wilshire
  Boulevard, Suite 220

  	
   

  	
   

  	
  9454 Wilshire
  Boulevard

  
	
   

  	
  Beverly Hills,
  CA 90210

  	
   

  	
   

  	
  Beverly Hi/Is,
  CA 90212

  

 

BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT:
(A) THE WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES, (B) THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THE WRITTEN LOAN AGREEMENT
MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.

 

As used in this
Notice, the following terms have the following meanings:

 

Loan.
The term “Loan means the following described loan: a Variable Rate
Nondisclosable Draw Down Line of Credit Loan to a Limited Liability Company for
$1,200,000.00 due on September 13, 2008. The reference rate (Lender’s Base
Rate, currently 8.250%), resulting in an initial rate of 8.250.

 

Loan
Agreement. The term “Loan Agreement” means one or more
promises, promissory notes, agreements, undertakings, security agreements,
deeds of trust or other documents, or commitments, or any combination of those
actions or documents, relating to the Loan, including without limitation the
following:

 

LOAN
DOCUMENTS

 

	
  Corporate
  Resolution: Kennedy-Wilson, Inc., a Delaware corporation

  	
   

  	
  LLC
  Resolution: Windscape Village LLC, a California limited liability company

  
	
  Resolution
  of Corporate LLC Member: KW Windscape Village Corp, a California corporation 

  	
   

  	
  Business
  Loan Agreement

  Promissory Note 

  
	
  CA
  Commercial Guaranty: Kennedy-Wilson, Inc., a Delaware corporation 

  	
   

  	
  List
  of Loan Documents - List of Documents Sent

  Disbursement
  Request and Authorization  

  
	
  Notice
  of Final Agreement

  	
   

  	
   

  

 

Parties. The term
“Parties” means Pacific Western Bank and any and all entities or individuals
who are obligated to repay the loan or have pledged property as security for
the Loan, including without limitation the following:

 

	
  Borrower:

  	
  Windscape
  Village LLC, a California limited liability company

  
	
  Guarantor 1:

  	
  Kennedy-Wilson, Inc.,
  a Delaware corporation

  

 

Each Party who signs
below, other than Pacific Western Bank, acknowledges, represents, and warrants
to Pacific Western Bank that it has received, read and understood this Notice
of Final Agreement. This Notice is dated September 13, 2007.

 

BORROWER:

 

W1NDSCAPE
VILLAGE LLC, A CALIFORNIA LIMITED LIABILITY COMPANY

 

KW
WINDSCAPE VILLAGE CORP, A CALIFORNIA CORPORATION, Manager of Windscape Village
LLC, a California ‘ted liability company

 

	
  By:

  	
  /s/ Robert E.
  Hart

  	
   

  	
  By:

  	
  /s/ Freeman A.
  Lyle

  
	
  Robert E. Hart,
  President/CEO of KW Windscape

  	
   

  	
  Freem
  an A Lyle, CFO/Secretary of KW Windscape

  
	
  Village Corp, a
  California corporation

  	
   

  	
  Village
  Coa California corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GUARANTOR:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  KENNEDY-WILSON,
  INC., A DELAWARE CORPORATION

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Wiliam J.
  McMorrow

  	
   

  	
  By:

  	
  /s/
  Freeman A. Lyle

  
	
   

  	
  William
  J. McMorrow, CEO of Kennedy-Wilson, inc.,

  a Delaware corporation

  	
   

  	
  Freernan A Lyle,
  CFO/Secretary of Kennedy- 

  Wilson, 146., a Delaware corporation

  

 

 

	
  Loan No: 99185256449

  	
   

  	
   

  	
   

  	
   

  

 

LENDER:

 

 

PACIFIC WESTERN BANK

 

 

	
  X

  	
   

  	
   

  
	
   

  	
  Authorized
  Signer

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