Document:

Exhibit 10.85

 

FIRST AMENDMENT TO EMPLOYMENT
AGREEMENT

 

This First Amendment to
Employment Agreement (the “First Amendment”) is made and entered into as of
August 1, 2006 by and between KW Multi-Family Management Group, Ltd. a Delaware
corporation (“the Company”), having an address of 9601 Wilshire Boulevard,
Suite 220, Beverly Hills, California 90210 and Robert E. Hart (“Employee”).

 

RECITALS

 

WHEREAS,
Company and
Employee have entered into that certain Employment Agreement dated as of
January 1, 2006 (the “Agreement”)
providing for the employment of Employee by Company pursuant to the terms of
such Agreement; and

 

WHEREAS,
Company and
Employee have agreed that the terms of the Employment Agreement should be
modified to change the Compensation.

 

AMENDMENT TO
AGREEMENT

 

NOW,
THEREFORE, for
good and valuable consideration the receipt and sufficiently of which are
hereby acknowledged, the parties hereby amend the Agreement, effective as of
August 1, 2006 as follows:

 

1.                                       Section 5 (a) Compensation is
deleted in its entirety and the following is added in lieu thereof:

 

Section 5 (a) Compensation.
The Company shall pay Employee a salary equal to $19,230.77 per pay period
($500,000.00 annualized) payable in equal installments every two weeks (based
on 26 pay periods per year) and subject to such deductions and withholdings as
Company may from time to time be required to make pursuant to applicable law,
governmental regulation or order.

 

Subject to the foregoing,
the Employment Agreement remains in full force and effect, and Company and
Employee hereby ratify and affirm the Employment Agreement in each and every
respect.

 

IN
WITNESS WHEREOF, the
undersigned have executed this Amendment as of the date first written above.

 

 

	
  COMPANY:

  	
   

  	
  EMPLOYEE:

  
	
  KW
  Multi-Family Management Group, Ltd.

  	
   

  	
   

  
	
  a Delaware corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: 

  	
  /s/ William J. McMorrow

  	
   

  	
  /s/ Robert E. HartExhibit
10.86

 

SECOND AMENDMENT TO EMPLOYMENT
AGREEMENT

 

This Second Amendment to
Employment Agreement (the “Second Amendment”) is made and entered into as of January
1, 2007 by and between KW Multi-Family Management Group, Ltd. a Delaware
corporation (“The Company”), and Robert E. Hart (“Employee”).

 

RECITALS

 

WHEREAS, Company and
Employee have entered into that certain Employment Agreement dated as of January
1, 2006 and amended August 1, 2006 (the “Agreement”), providing
for the employment of Employee by Company pursuant to the terms of such
Agreement; and

 

WHEREAS, Company and
Employee have agreed that the terms of the Employment Agreement should be
modified to change the Term.

 

AMENDMENT
TO AGREEMENT

 

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

 

1.               The term of this Agreement
is extended to December 31, 2007. Therefore, Section 3 of the Agreement is
amended such that the termination date of “December 31, 2006” is deleted and
the termination date of “December 31, 2007” is inserted in lieu thereof:

 

Subject to the foregoing,
the Employment Agreement remains in full force and effect, and Company and
Employee hereby ratify and affirm the Employment Agreement in each and every
respect.

 

IN WITNESS WHEREOF, the
undersigned have executed this Amendment as of the date first above written.

 

 

	
  COMPANY:

  	
   

  	
  EMPLOYEE:

  
	
  KW
  Multi-Family Management Group, Ltd.

  	
   

  	
   

  
	
  a Delaware corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: 

  	
  /s/ William J. McMorrow

  	
   

  	
  /s/ Robert E. HartExhibit
10.87

 

THIRD AMENDMENT TO EMPLOYMENT  AGREEMENT

 

This
Third Amendment to Employment Agreement (the “Third Amendment”) is made and
entered into as of January 1, 2008 by and between KW Multi-Family Management
Group, Ltd. a Delaware corporation (“The Company”), and Robert E. Hart (“Employee”).

 

RECITALS

 

WHEREAS, Company and Employee have
entered into that certain Employment Agreement dated as of January 1, 2006 and amended August 1,  2006,
and January 1, 2007 (the “Agreement”), providing for the employment of Employee
by Company pursuant to the terms of such Agreement; and

 

WHEREAS, Company. and
Employee have agreed that the terms of the Employment Agreement should be
modified to change the Term and Compensation.

 

AMENDMENT TO AGREEMENT

 

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

 

1.              The term of
this Agreement is extended to December 31, 2008. Therefore, Section 3
of the Agreement is amended such that the termination date of “December 31,
2007” is deleted and the termination date of “December 31, 2008” is inserted in
lieu thereof:

 

2.                Section 5 (a) Compensation
is deleted in its entirety and the following is added in lieu thereof:

 

Section 5 (a) Compensation. The Company shall
pay Employee a salary equal to $23,076.93 per pay period ($600,000.00
annualized) payable in equal installments every two weeks (based on 26 pay
periods per year) and subject to such deductions and withholdings as Company
may from time to time be required to make pursuant to applicable law,
governmental regulation or order.

 

Subject
to the foregoing, the Employment Agreement remains in full force and effect,
and Company and Employee hereby ratify and affirm the Employment Agreement in
each and every respect.

 

IN WITNESS WHEREOF, the undersigned have
executed this Amendment as of the date first above written.

 

	
  COMPANY:

  	
   

  	
  EMPLOYEE:

  
	
  KW
  Multi-Family Management Group, Ltd.

  	
   

  	
   

  
	
  a Delaware corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  /s/
  William J. McMorrow

  	
   

  	
  /s/
  Robert E. HartExhibit 10.88

 

FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT

 

This
Fourth Amendment to Employment Agreement (the “Fourth Amendment”) is made and
entered into as of January 1, 2009 by and between KW Multi-Family Management
Group, Ltd. a Delaware corporation (“The Company”), and Robert E. Hart (“Employee”).

 

RECITALS

 

WHEREAS, Company
and Employee have entered into that certain Employment Agreement dated as of January 1,
2006 and amended August 1, 2006, January 1, 2007, and January 1, 2008 (the “Agreement”),
providing for the employment of Employee by Company pursuant to the
terms of such Agreement; and

 

WHEREAS, Company and Employee have
agreed that the terms of the Employment Agreement should be modified to change
the Term.

 

AMENDMENT TO AGREEMENT

 

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

 

1.                The term of
this Agreement is extended to December 31, 2009. Therefore, Section 3 of the
Agreement is amended such that the termination date of “December 31, 2008” is
deleted and the termination date of “December 31, 2009” is inserted in lieu
thereof:

 

Subject
to the foregoing, the Employment Agreement remains in full force and effect,
and Company and Employee hereby ratify and affirm the Employment Agreement in
each and every respect.

 

IN WITNESS WHEREOF, the undersigned have
executed this Amendment as of the date first above written.

 

 

	
  COMPANY:

  	
   

  	
  EMPLOYEE:

  
	
  KW
  Multi-Family Management Group, Ltd.

  	
   

  	
   

  
	
  a Delaware corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: 

  	
  /s/ William J. McMorrow

  	
   

  	
  /s/ Robert E. HartExhibit 10.89

 

PROMISSORY NOTE

 

	
  $3,543,127.00

  	
   

  	
  Beverly Hills, California

  	
   

  	
  April 10, 2006

  

 

The undersigned promises to pay to Kennedy-Wilson, Inc.,
a Delaware corporation (“Holder”) at 9601 Wilshire Boulevard, Suite 220,
Beverly Hills, California 90210, the principal sum of Three Million Five
Hundred Forty Three Thousand One Hundred Twenty Seven Dollars ($3,543,127.00)
together with simple interest thereon at the rate of 7.5% per annum from and
after the date hereof.  Principal and
accrued interest shall be due and payable in full on April 9, 2011 (the “Maturity
Date”).  Principal and accrued interest
may be prepaid in whole or in part without penalty.  The principal amount of this loan together
with accrued interest thereon shall be forgiven in full if, prior to the
Maturity Date, the undersigned dies, becomes disabled or is involuntarily
terminated as Holder’s CEO or upon any “change in control” of Holder as defined
in the Tenth Amendment to the undersigned’s employment contract with Holder.

 

Executed as of the day and year first above written.

 

 

	
   

  	
  /s/
  William J. McMorrow

  
	
   

  	
  William
  J. McMorrowExhibit
10.90

 

BUSINESS LOAN AGREEMENT

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No

  	
   

  	
  Call / Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  	
   

  	
  Initials

  
	
  $28,000,000.00

  	
   

  	
  07-29-2009

  	
   

  	
  08-12-2014

  	
   

  	
  406268713

  	
   

  	
   

  	
   

  	
  Port #115131

  	
   

  	
  710

  	
   

  	
   

  

 

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 item. Any item above containing **** has been omitted due to text
length limitations.

 

	
  Borrower:

  	
   

  	
  Kennedy-Wilson, Inc., a Delaware corporation

  9601 Wilshire Boulevard, Suite 220

  Beverly Hills, CA 90210

  	
   

  	
  Lender:

  	
   

  	
  Pacific Western Bank

  Beverly Hills Office

  9454 Wilshire Boulevard

  Beverly Hills, CA 90212

  

 

THIS
BUSINESS LOAN AGREEMENT dated July 29, 2009, is made and executed between Kennedy-Wilson, Inc.,
a Delaware corporation (“Borrower”) and Pacific Western Bank (“Lender”) on the
following terms and conditions. Borrower has received prior commercial loans
from Lender or has applied to Lender for a commercial loan or loans or other
financial accommodations, including those which may be described on any exhibit
or schedule attached to this Agreement. Borrower understands and agrees that: (A) in
granting, renewing. or extending any Loan, Lender is relying upon Borrower’s
representations, warranties, and agreements as set forth In this Agreement; (B) the
granting, renewing. or extending of any Loan by Lender at all times shall be
subject to Lenders sole judgment and discretion; and (C) all such Loans
shall be and remain subject to the terms and conditions of this Agreement

 

TERM. This Agreement shall be effective as of July 29,
2009, and shall continue in full force and effect until such time as all of
Borrowers Loans in favor of Lender have been paid in full, including principal,
Interest, costs, expenses, attorneys’ fees, and other fees and charges, or
until such time as the parties may agree in writing to terminate this
Agreement.

 

CONDITIONS
PRECEDENT TO EACH ADVANCE. Lender’s obligation to make the initial Advance and each subsequent
Advance under this Agreement shall be subject to the fulfillment to Lenders
satisfaction of all of the conditions set forth in this Agreement and in the
Related Documents.

 

Loan Documents. Borrower shall provide to Lender the
following documents for the Loan: (1) the Note: (2) together with all
such Related Documents as Lender may require for the Loan, all in form and
substance satisfactory to Lender and Lenders counsel.

 

Borrower’s Authorization. Borrower shall have provided in form
and substance satisfactory to Lender properly certified resolutions, duly
authorizing the execution and delivery of this Agreement, the Note and the
Related Documents, In addition, Borrower shall have provided such other
resolutions, authorizations, documents and instruments as Lender or its
counsel, may require.

 

Payment of Fees and Expenses. Borrower shell have paid to Lender all
fees, charges, and other expenses which are then due and payable as specified
in this Agreement or any Related Document.

 

Representations and Warranties. The representations and warranties set
forth in this Agreement, in the Related Documents, and in any document or
certificate delivered to Lender under this Agreement are true and correct.

 

No Event of Default. There shall not exist at the time of any
Advance a condition which would constitute an Event of Default under this
Agreement or under any Related Document.

 

REPRESENTATIONS
AND WARRANTIES.
Borrower represents and warrants to Lender, as of the date of this Agreement,
as of the date of each disbursement of loan proceeds, as of the date of any
renewal, extension or modification of any Loan, and at all times any
indebtedness exists:

 

Organization. Borrower is a corporation for profit
which is, and at all times shall be, duly organized, validly existing, and in
good standing under and by virtue of the laws of the State of Delaware.
Borrower is duly authorized to transact business in all other states in which
Borrower is doing business, having obtained all necessary filings, governmental
licenses and approvals for each state in which Borrower Is doing business.
Specifically, Borrower is, and at all times shall be, duly qualified as a
foreign corporation in all states in which the failure to so qualify would have
a material adverse effect on its business or financial condition. Borrower has
the full power and authority to own its properties and to transact the business
in which it is presently engaged or presently proposes to engage. Borrower
maintains an office at 9601 Wilshire Boulevard, Suite 220, Beverly Hills,
CA 90210. Unless Borrower has designated otherwise in writing, the principal
office is the office at which Borrower keeps its books and records including
its records concerning the Collateral. Borrower will notify Lender prior to any
change in the location of Borrower’s state of organization or any change in
Borrower’s name. Borrower shall do all things necessary to preserve and to keep
in full force and effect its existence, rights and privileges, and shall comply
with all regulations, rules, ordinances, statutes, orders and decrees of any
governmental or quasi-governmental authority or court applicable to Borrower
and Borrowers business activities.

 

Assumed Business Names. Borrower has filed or recorded all
documents or filings required by law relating to all assumed business names
used by Borrower. Excluding the name of Borrower, the following is a complete
list of all assumed business names under which Borrower does business: None.

 

Authorization. Borrower’s execution, delivery, and
performance of this Agreement and all the Related Documents have been duly
authorized by all necessary action by Borrower and do not conflict with, result
In a violation of, or constitute a default under (I) any provision of (a) Borrower’s
articles of incorporation or organization, or bylaws, or (b) any agreement
or other instrument binding upon Borrower or (2) any law, governmental
regulation, court decree, or order applicable to Borrower or to Borrower’s
properties.

 

 

	
  Loan No. 406268713

  	
   

  	
   

  

 

Financial Information. Each of Borrower’s financial statements
supplied to Lender truly and completely disclosed Borrower’s financial
condition as of the date of the statement, and there has been no material
adverse change in Borrower’s financial condition subsequent to the dale of the
most recent financial statement supplied to Lender. Borrower has no material
contingent obligations except as disclosed in such financial statements.

 

Legal Effect. This Agreement constitutes, and any
instrument or agreement Borrower is required to give under this Agreement when
delivered will constitute legal, valid, and binding obligations of Borrower
enforceable against Borrower in accordance with their respective terms.

 

Properties. Except as contemplated by this
Agreement or as previously disclosed in Borrower’s financial statements or in
writing to Lender and as accepted by Lender, and except for properly tax liens
for taxes not presently due and payable, Borrower owns and has good title to
all of Burrower’s properties Free and clear of all Security Interests, and has
not executed any security documents or financing statements relating to such
properties. All of Borrower’s properties are titled in Borrower’s legal name,
and Borrower has not used or filed a financing statement under any other name
for at least the last five (5) years.

 

Hazardous Substances. Except as disclosed to and acknowledged
by Lender in writing, Borrower represents and warrants that: (1) during
the period of Borrower’s ownership of the Collateral, there has been no use,
operation, manufacture, storage, treatment, and disposal. release or threatened
release of any Hazardous Substance by any person on, under, about or from arty
of the Collateral. (2) Borrower has no knowledge of, or reason to believe
that there has been (a) any breach or violation of any Environmental Laws;
(b) any use, generation, manufacture, storage, treatment, disposal,
release or threatened release of any Hazardous Substance on, under, about or
from the Collateral by any prior owners or occupants of any of the Collateral;
or (c) any actual or threatened litigation or claims of any kind by any
person relating to such  matters, (3) Neither Borrower
nor any tenant, contractor, agent or other authorized user of any of the
Collateral shall use,  generate, manufacture, store,
treat, dispose of or release any Hazardous Substance on, under, about or from
any of the Collateral; and any such activity shall be conducted in compliance
with all applicable federal, state, and local laws, regulations. And
ordinances, including without imitation all Environmental Laws, Borrower
authorizes Lender and its agents to enter upon the collateral to make such
inspections and tests as Lender may deem appropriate to determine compliance of
the Collateral with this section of the Agreement. Any inspections or tests
made by Lender shall be at Borrowers expense and for Lender’s purposes only and
shall not be construed to create any responsibility or liability on the part of
Lender to Borrower or to any other person. The representations and warranties
contained herein are based on Borrower’s due diligence in investigating the
Collateral for hazardous waste and Hazardous Substances. Borrower hereby (1) releases
and waives any future claims against Lender for indemnity or contribution in
the event Borrower becomes liable for cleanup or other costs under any such
laws, and (2) agrees to indemnify, defend, and hold harmless Lender
against any and all claims, losses, liabilities, damages, penalties, and
expenses which Lender may directly or indirectly sustain or suffer resulting
from a breach of this section of the Agreement or as a consequence of any use,
generation, manufacture, storage, disposal, release or threatened release of a
hazardous waste or substance on the Collateral. The provisions of this section
of the Agreement, including the obligation to indemnify and defend, shall
survive the payment of the Indebtedness and the termination, expiration or
satisfaction of this Agreement and shall not be affected by Lender’s
acquisition of any interest in any of the Collateral, whether by foreclosure or
otherwise.

 

Litigation and Claims. No litigation, claim, investigation,
administrative proceeding or similar action (including those for unpaid taxes)
against Borrower is pending or threatened, and no other event has occurred
which may materially adversely affect Borrower’s financial condition or
properties, other than litigation, claims, or other events, if any, that have
been disclosed to and acknowledged by Lender in writing.

 

Taxes. To the best of Borrower’s knowledge, all
of Borrower’s tax returns and reports that are or were required to be titled,
have been filed, and all taxes, assessments and other governmental charges have
been paid in full, except those presently being or to be contested by Borrower
in good faith in the ordinary course of business and for which adequate
reserves have been provided.

 

Lien Priority. Unless otherwise previously disclosed
to Lender in writing, Borrower has not entered Into or granted any Security
Agreements, or permitted the filing or attachment of any Security Interests on
or affecting any of the Collateral directly or indirectly securing repayment of
Borrower’s Loan and Note, that would be prior or that may in any way be
superior to Lenders Security interests and rights in and to such Collateral.

 

Binding Effect. This Agreement, the Note, all Security
Agreements (if any), and all Related Documents are binding upon the signers
thereof, as well as upon their successors, representatives and assigns, and are
legally enforceable in accordance with their respective terms,

 

AFFIRMATIVE
COVENANTS.
Borrower covenants and agrees with Lender that, so long as this Agreement
remains in effect, Borrower will:

 

Notices of Claims and Litigation. Promptly inform Lender in writing of (1) all
material adverse changes in Borrower’s financial condition. and (2) all
existing and all threatened litigation, claims, investigations, administrative
proceedings or similar actions affecting Borrower or any Guarantor which could
materially affect the financial condition of Borrower or the financial
condition of any Guarantor.

 

Financial Records. Maintain its books and records in
accordance with GAAP, applied on a consistent basis, and permit Lender to
examine and audit Borrower’s books and records at all reasonable times.

 

Financial Statements. Furnish Lender with the following:

 

Additional Requirements.

 

BORROWER’S FINANCIAL
REQUIREMENTS:

 

(I)    Financial Statements:

 

ANNUAL STATEMENTS. Borrower shall provide to Lender, as
soon as available, but in no event later than one hundred fifty (150) days
after the end of each fiscal year end, a consolidated balance sheet and income
statement for the period ended in form satisfactory to Lender, audited by a CPA
acceptable to Lender. Statements may be due more often if requested by Lender.

 

2

 

INTERIM STATEMENTS. Borrower shall provide to Lender, as
soon as available, but in no event later than sixty (60) days after the end of
each fiscal quarter (including fiscal year end), a self-prepared consolidated balance
sheet and income statement for the period ended in form satisfactory to Lender
to include Detailed Asset and Expense Schedules and Reconciliation of Net
Worth. Statements may be due more often if requested by Lender.

 

TAX RETURNS. Borrower shall provide to Lender, as
soon as available, but in no event later than fifteen (15) days after the
applicable filing date for the tax reporting period ended. Federal and other
governmental tax returns. If extensions are flied, copies of such extensions
are to be provided immediately upon filing.

 

(ii)   Financial Covenants/Ratios:

 

MINIMUM LIQUIDITY. Borrower shall maintain a Minimum
Liquidity of $2,600,000.00. The term “Liquidity” means the unencumbered
aggregate of cash, U.S. Government obligations, bonds rated BBB or better plus
marketable securities with minimum $5 per share values which are traded on
national exchanges. This required Minimum Liquidity must be maintained at all
times and may be evaluated quarterly.

 

ADJUSTMENT. Unrestricted liquid assets to be maintained
at the greater of $2,800,000.00 or an amount that would be necessary to cover
the shortfall if any, between adjusted EBITDA and Debt Service.

 

EFFECTIVE TANGIBLE NET WORTH. Borrower to maintain a minimum Effective
Tangible Net Worth of $70,000,000.00. The term “Effective Tangible Net Worth”
means Borrower’s total assets excluding all intangible assets (i.e. goodwill,
trademarks, patents, copyrights. organization expenses, and similar intangible
items) arid excluding duo from related entities (e.g. affiliates, employees,
subsidiaries, shareholders, etc.), less total liabilities excluding debt
subordinated to Lender, This amount must be maintained at all times and may be
evaluated quarterly.

 

DEBT/WORTH RATIO. Borrower to maintain a maximum ratio of
Debt/Worth of 2.50 to 1.00. The ratio “Debt/Worth” means Borrower’s total
liabilities. excluding debt subordinated to Lender, and divided by Borrowers
Effective Tangible Net Worth This ratio must be maintained at all times and may
be evaluated quarterly. The term “Effective Tangible Net Worth means Borrowers
total assets excluding all intangible assets (I.e. goodwill, trademarks.
patents, copyrights, organization expenses, and similar intangible items) and
excluding due from related entities (eg. affiliates, employees, subsidiaries,
shareholders. etc.). less total liabilities excluding debt subordinated to
Lender.

 

PROFITABILITY. Borrower must be profitable each fiscal
year end. if annual profitability is required, no more than one quarterly loss
per fiscal year is allowed.

 

DEBT/EBITDA RATIO. Borrower to maintain a maximum ratio
ofDebt/EBITDA of 0.80 to 1.00, this ratio must be maintained at. all times and
may be evaluated quarterly. The ratio “Debt/EBITDA” means Borrower’s prepared
Proforma Consolidated income of Operation statement as follows:

 

*DSCR=(a) divided by
(b)

 

(a)   Defined as Total Revenues,

 

(b)   Defined as Total Operating Expenses including
Distributions, Dividends, Stock Repurchases, Interest Expense including Joint
Venture Interest Expense as detailed in the Year to Date income Recap.

 

The DSCR shall be
maintained at all times and may be evaluated on a quarterly basis,

 

(ill) Reports/Schedules Statements:

 

PRO FORMA AND YEAR TO DATE. Borrower agrees to provide to Lender
within sixty (60) days of each calendar quarter-end, copies of its self
prepared Pro Forma Consolidated Statement of Operations and its Year to Date
Income Recap.

 

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

 

Additional Information. Furnish such additional information and
statements, as Lender may request from time to time.

 

Insurance. Maintain fire and other risk insurance,
public liability insurance, and such other insurance as Lender may require with
respect to Borrower’s properties and operations. in form, amounts, coverages
and with insurance companies acceptable to Lender. Borrower, upon request of
Lender, will deliver to Lender from time to time the policies or certificates
of insurance in form satisfactory to Lender, including stipulations that
coverages will not be cancelled or diminished without at least ten (10) days
prior written notice to Lender. Each insurance policy also shall Include an
endorsement providing that coverage in favor of Lender will not be impaired in
any way by any act, omission or default of Borrower or any other person. In
connection with all policies covering assets in which Lender holds or Is
offered a security interest for the Loans. Borrower will provide Lender with
such lender’s loss payable or other endorsements as Lender may require.

 

Insurance Reports. Furnish to Lender, upon request of
Lender, reports on each existing insurance policy showing such information as
Lender may reasonably request, including without limitation the following: (1) the
name of the insurer; (2) the risks Insured: (3) the amount of the
policy; (4) the properties Insured: (5) the then current property
values on the basis of which insurance has been obtained, and the manner of
determining those values; and (6) the expiration dale of the policy. In
addition, upon request of Lender (however not more often than annually).
Borrower will have an independent appraiser satisfactory to Lender determine,
as applicable, the actual cash value or replacement cost of any Collateral, The
cost of such appraisal shall be paid by Borrower.

 

3

 

Other Agreements. Comply with all terms and conditions of
all other agreements, whether now or hereafter existing, between Borrower  and any other party and notify Lender
immediately in writing of any default in connection with any other such
agreements.

 

Loan Proceeds. Use all Loan proceeds solely for
Borrower’s business operations, unless specifically consented to the contrary
by Lender in writing.

 

Taxes, Charges and Liens. Pay and discharge when due all of its
indebtedness and obligations, including without limitation all assessments.
taxes, governmental charges, levies and liens, of every kind and nature,
imposed upon Borrower or Its properties. income, or profits, prior to the dale
on which penalties would attach, and all lawful claims that, if unpaid, might
become a lien or charge upon any of Borrower’s properties, income, or profits.
Provided however, Borrower will not be required 
to pay and discharge any such assessment, lax, charge, levy, lien or
claim so long as (I) the legality of the same shall be contested in good
faith by appropriate proceedings, and (2) Borrower shall have established
on Borrower’s books adequate reserves with respect to such contested
assessment, tax, charge, levy, lien, or claim in accordance with GAAP.

 

Performance. Perform and comply. in a timely manner,
with all terms, conditions, and provisions set forth in this Agreement, in the
Related Documents, and in all other instruments and agreements between Borrower
and Lender, Borrower shall notify Lender immediately in writing of any default
In connection with any agreement.

 

Operations. Maintain executive and management
personnel with substantially the same qualifications and experience as the
present executive and management personnel provide written notice to Lender of
any change in executive and management personnel; conduct Its business affairs
in a reasonable and prudent manner.

 

Environmental Studies, Promptly conduct and complete, at
Borrowers expense, all such investigations, studies, samplings and testing as
may be requested by Lender or any governmental authority relative to any
substance, or any waste or by-product of any substance defined as toxic or a
hazardous substance under applicable federal, state, or local law, rule,
regulation, order or directive, at or affecting any property or any facility
owned, leased or used by Borrower.

 

Compliance with Governmental
Requirements.
Comply with all laws, ordinances, and regulations, now or thereafter in effect,
of all governmental authorities applicable to the conduct of Borrower’s
properties, businesses and operations, and to the use or occupancy of the
Collateral, including without limitation, the Americans With Disabilities Act.
Borrower may contest in good faith any such law, ordinance, or regulation and
withhold compliance during any proceeding, 
including appropriate appeals, so long as Borrower has notified Lender
in writing prior to doing so and so long as, in Lender’s sole opinion, Lender’s
interests in the Collateral are not jeopardized. Lender may require Borrower to
post adequate security or a surety bond, reasonably satisfactory to Lender, to
protect Lenders interest.

 

Inspection.
Permit employees or agents of Lender at any reasonable time to inspect any and
all Collateral for the Loan or Loans and Borrower’s other properties and to
examine or audit Borrower’s books, accounts, and records and to make copies and
memoranda of Borrower’s books, accounts. and records. If Borrower now or at any
time hereafter maintains any records (including without limitation computer
generated records and computer software programs for the generation of such
records) in the possession of a third party. Borrower, upon request of Lender,
shall notify such party to permit Lender free access to such records at all
reasonable times and to provide Lender with copies or any records it may
request, all at Borrower’s expense.

 

Compliance Certificates. Unless waived in writing by Lender,
provide Lender within sixty (60) days after the end of each fiscal quarter,
with a certificate executed by Borrower’s chief financial officer, or other
officer or person acceptable to Lender, certifying that time representations
and warranties set forth in this Agreement are true and correct as of the date
of the certificate and further certifying that, 
as if the date of the certificate, no Event of Default exists tinder
this Agreement.

 

Environmental Compliance and
Reports. Borrower
shall comply In all respects with any and all Environmental Laws: not cause or
permit to exist, as a result of an intentional or unintentional action or
omission on Borrower’s part or on the part of any third party, on property
owned and/or occupied by Borrower, any environmental activity where damage may
result to the environment, unless such environmental activity is pursuant to
and in compliance with the conditions of a permit issued by the appropriate
federal, state or local governmental authorities: shall furnish to Lender
promptly and in any event within thirty (30) days after receipt thereof a copy
of any notice, summons, lien, citation, directive, letter or ether
communication from any governmental agency or instrumentality concerning any
intentional or unintentional action or omission on Borrowers part in connection
with any environmental activity whether or not there is damage to the
environment and/or other natural resources.

 

Additional Assurances. Make, execute and deliver to Lender
such promissory notes, mortgages, deeds of trust, security agreements.
assignments, financing statements, instruments, documents and other agreements
as Lender or Its attorneys may reasonably request to evidence and secure the
Loans and to perfect all Security Interests.

 

RECOVERY
OF ADDITIONAL COSTS.
If the imposition of or any change in any law, rule, regulation or guideline,
or the interpretation or application of any thereof by any court or administrative
or governmental authority (including any request or policy not having the force
of law) shall impose, modify or make applicable any taxes (except federal.
state or local income or franchise taxes imposed on Lender), reserve
requirements. capital adequacy requirements or ether obligations which would (A) increase
the cost to Lender for extending or maintaining the credit facilities to which
this Agreement relates, (B) reduce the amounts payable to Lender under
this Agreement or the Related Documents, or (C) reduce the rate of return
on Lender’s  capital as a
consequence of Lender’s obligations with respect to the credit facilities to
which this Agreement relates, then Borrower agrees to pay Lender such
additional amounts as will compensate Lender therefore, within five (5) days
after Lenders written demand for such payment, which demand shall be
accompanied by an explanation of such imposition or charge and a calculation In
reasonable detail of the additional amounts payable by Borrower, which
explanation and calculations shall be conclusive in the absence of manifest
error.

 

LENDER’S
EXPENDITURES. If
any action or proceeding Is commenced that would materially affect Lenders
interest in the Collateral or if Borrower falls to comply with any provision of
this Agreement or any Related Documents, including but not limited to Borrower’s
failure to discharge or pay when due any amounts Borrower Is required to
discharge or pay under this Agreement or any Related Documents, Lender on
Borrower’s behalf may (but shall not be obligated to) take any action that
Lender deems appropriate, including but not limited to discharging or paying
all taxes, liens, security interests, encumbrances and other claims, at any
time levied or placed on any Collateral and paying all costs for insuring,
maintaining and preserving any Collateral. All such expenditures incurred or
paid by Lender for such purposes will then bear interest at the rate charged
under the Note from the date incurred or paid by Lender to the date of
repayment by Borrower. All such expenses will become a part of the Indebtedness
and, at Lender’s option, will (A) be payable on demand; (B) be added
to the balance of the Note and be 

 

4

 

apportioned among and be
payable with any installment payments to become due during either (1) the
term of any applicable insurance policy; or (2) the remaining term of the
Note; or (C) be treated as a balloon payment which will be due and payable
at the Note’s maturity.

 

NEGATIVE
COVENANTS.
Borrower covenants and agrees with Lender that while this Agreement is In
effect, Borrower shall not, without the prior written consent of Lender:

 

Indebtedness and Liens. (1) Except for trade debt incurred
in the normal course of business and indebtedness to Lender contemplated by
this Agreement, create, incur or assume indebtedness for borrowed money.
including capital leases. (2) sell, transfer, mortgage, assign. pledge,
lease, grant a security Interest in, or encumber any of Borrower’s assets
(except as allowed as Permitted Liens), or (3) sell with recourse any of
Borrower’s accounts, except to Lender.

 

Continuity of Operations. (1) Engage in any business
activities substantially different than those in which Borrower is presently
engaged, (2) cease operations, liquidate, merge, transfer, acquire or
consolidate with any other entity, change its name, dissolve or transfer or
sell Collateral out of the ordinary course of business, or (3) pay any
dividends on Borrower’s stock (other than dividends payable In Its stock),
provided. however that notwithstanding the foregoing, but only so long as no
Event of Default has occurred and is continuing or would result from the
payment of dividends, if Borrower Is a “Subchapter S Corporation” (as defined
in the Internal Revenue Code of 1986, as amended), Borrower may pay cash
dividends on its stock to its shareholders from time to time in amounts
necessary to enable the shareholders to pay income taxes and make estimated
income tax payments to satisfy their liabilities under federal and state law
which arise solely from their status as Shareholders of a Subchapter S
Corporation because of their ownership or shares of Borrower’s stock, or
purchase or retire any of Borrower’s outstanding shares or allow or amend
Borrower’s capital structure,

 

Loans, Acquisitions and
Guaranties. (1) Loan,
invest in or advance money or assets to any other person, enterprise or entity,
(2) purchase, create or acquire any Interest in any other enterprise or
entity, or (3) incur any obligation as surety or guarantor other than in
the ordinary course of business,

 

Agreements. Borrower will not enter into any
agreement containing any provisions which would be violated or breached by the
performance of Borrower’s obligations under this Agreement or in connection
herewith.

 

CESSATION
OF ADVANCES. If
Lender has made any commitment to make any Loan to Borrower, whether under this
Agreement or under any other agreement, Lender shall have no obligation to make
Loan Advances or to disburse Loan proceeds if: (A) Borrower or any
Guarantor is in default under the terms of this Agreement or any of the Related
Documents or any other agreement that Borrower or any Guarantor has with
Lender; (B) Borrower or any Guarantor dies, becomes incompetent or becomes
insolvent, files a petition in bankruptcy or similar proceedings, or is
adjudged a bankrupt; (C) there occurs a material adverse change in
Borrower’s financial condition, in the financial condition of any Guarantor, or
in the value of any Collateral securing any Loan; or (D) any Guarantor
seeks, claims or otherwise attempts to limit, modify or revoke such Guarantor’s
guaranty of the Loan or any other loan with Lender; or (E) Lender in good
faith deems itself insecure, even though no Event of Default shall have occurred.

 

RIGHT OF
SETOFF. To the
extent permitted by applicable law, Lender reserves a right of setoff in all
Borrower’s accounts with Lender (whether checking, savings, or some ether
account). This includes all accounts Borrower holds jointly with someone else
and all accounts Borrower may open in the future. However, this does not
include any IRA or Keogh accounts, or any trust accounts for which setoff would
he prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the debt against any and
all such accounts.

 

DEFAULT. Each of the following shall constitute
an Event of Default under this Agreement:

 

Payment Default, Borrower fails to make any payment when
due under the Loan.

 

Other Defaults. Borrower falls to comply with or to
perform any other term, obligation, covenant or condition contained in this
Agreement or in any of the Related Documents or to comply with or to perform
any term, obligation, covenant or condition contained in any other agreement
between Lender and Borrower.

 

Default In Favor of Third Parties. Borrower or any Grantor defaults under
army loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person
that may materially affect any of Borrower’s or any Grantor’s property or
Borrower’s or any Grantor’s ability to repay the Loans or perform their
respective obligations under this Agreement or any of the Related Documents,

 

False Statements. Any warranty, representation or
statement made or furnished to Lender by Borrower or on Borrower’s behalf under
this Agreement or the Related Documents is false or misleading in any material
respect, either now or at the time made or furnished or becomes false or
misleading at any time thereafter.

 

Insolvency. The dissolution or termination of
Borrower’s existence as a going business, the insolvency of Borrower, the
appointment of a receiver for any part or Borrower’s property, any assignment
for the benefit of creditors, any type of creditor workout, or the commencement
of any proceeding under any bankruptcy or insolvency laws by or against
Borrower.

 

Defective Collateralization. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or lien)
at any time and for any reason.

 

Creditor or Forfeiture
Proceedings.
Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding,
self-help, repossession or any other method, by any creditor of Borrower or by
any governmental agency against any collateral securing the Loan. This includes
a garnishment of any of Borrower’s accounts, including deposit accounts, with
Lender. However, this Event of Default shall not apply if there is a good faith
dispute by Borrower as to the validity of reasonableness of the claim which is
the basis of the creditor or forfeiture proceeding and if Borrower gives Lender
written notice of the creditor or forfeiture proceeding and deposits with
Lender monies or a surety bond for the creditor or forfeiture proceeding, in an
amount determined by Lender, in its sole discretion, as being an adequate
reserve or bond for the dispute.

 

5

 

Events Affecting Guarantor. Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or any Guarantor dies or
becomes incompetent, or revokes or disputes the validity of, or liability under,
any Guaranty of the Indebtedness.

 

Change of Ownership. Any change in ownership of twenty-five
percent (25%) or more of the common stock of Borrower.

 

Adverse Change. A material adverse change occurs in
Borrower’s financial condition, or Lender believes the prospect of payment or
performance of the Loan is impaired.

 

Insecurity. Lender in good faith believes itself
insecure.

 

Right to Cure. If any default, other than a default on
indebtedness, is curable and if Borrower or Grantor, as the case may be, has
not been given a notice of a similar default within the preceding twelve (12)
months, it may be cured if Borrower or Grantor, as the case may be, after
receiving written notice from Lender demanding cure of such default: (1) cure
the default within fifteen (15) days; or (2) if the cure requires more
than fifteen (15) days, immediately initiate steps which Lender deems in Lender’s
sold discretion to be sufficient to cure the default and thereafter continue
and complete all reasonable and necessary steps sufficient to produce
compliance as soon as reasonably practical.

 

EFFECT OF
AN EVENT OF DEFAULT.
If any Event of Default shall occur, except where otherwise provided in this
Agreement or the Related Documents, all commitments and obligations of Lender
under this Agreement or the Related Documents or any other agreement
immediately will terminate (including any obligation to make further Loan
Advances or disbursements), and, at Lender’s option, all Indebtedness
immediately will become due and payable, all without notice of any kind to
Borrower, except that in the case of an Event of Default of the type described
in the “Insolvency” subsection above, such acceleration shall be automatic and
not optional. In addition, Lender shall have all the rights and remedies
provided in the Related Documents or available at law, in equity, or otherwise.
Except as may be prohibited by applicable law, all of Lenders rights and
remedies shall be cumulative and may be exercised singularly or concurrently.
Election by Lender to pursue any remedy shall not exclude pursuit of any other
remedy, and an election to make expenditures or to take action to perform an
obligation of Borrower or of any Grantor shall not affect Lender’s right to
declare a default and to exercise its rights and remedies.

 

INTEGRATION. The parties agree that (a) this
Agreement, together with all of the Related Documents, represents the final
agreement between the parties, and therefore incorporates all negotiations of
the panes hereto (b) there are no unwritten oral agreements between the
parties, and (c) this Agreement may not be contradicted by evidence of any
prior, contemporaneous, or subsequent oral agreements or understandings of the
parties.

 

COMPLIANCE
CERTIFICATES.
Notwithstanding anything to the contrary above, Borrower to provide a
Compliance Certification (provided by Lender) within sixty (60) days of
calendar quarter-end signed by the CEO and CFO. Certificate to include, but not
be limited to, confirmation that Borrower’s outstanding unsecured borrowings
with other Lender’s did not exceed $20,000,000.00 at anytime.

 

DISTRIBUTIONS
AND ADVANCES.
Borrower shall be prohibited from making distributions or advances to Officers
without prior consent from Lender. The conditions exclude bonuses paid to
Officers in the normal course of business.

 

COMPANY
COMMON STOCK.
Borrower shall not repurchase Company Common Stock in excess of $3,000,000.00
without Lender’s consent. Such repurchase will not cause the Borrower to be in
violation of the financial covenants prior to or after such action.

 

PREFERRED
DIVIDENDS.
Borrower shall distribute annual Preferred Dividends in an amount not to exceed
$3,700,000.00.

 

CROSS
DEFAULT. An Event
of Default under the Note shall also constitute a global Event of Default under
any and all Notes or obligations executed by Kennedy-Wilson, Inc., a
Delaware corporation or any other related entity or affiliate.

 

OUTSTANDING
COMMITMENT.
Borrower to comply with Lender’s covenant limiting outstandings under its US
Bank/East West Bank commitment to $20,000,000.00 at all times.

 

MISCELLANEOUS
PROVISIONS. The
following miscellaneous provisions are a part of this Agreement:

 

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

 

Attorneys’ Fees; Expenses. Borrower 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 Agreement.
Lender may hire or pay someone else to help enforce this Agreement, and
Borrower 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 end legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services.
Borrower also shall pay all court costs and such additional fees as may be
directed by the court.

 

Caption Headings. Caption headings in this Agreement are
for convenience purposes only and are net to be used to interpret or define the
provisions of this Agreement.

 

Consent to Loan Participation. Borrower agrees and consents to Lender’s
sale or transfer, whether nor later, of one or more participation interests in
the Loan to one or more purchasers, whether related or unrelated to Lender.
Lender may provide, without any limitation whatsoever, to any one or more
purchasers, or potential purchasers, any information or knowledge Lender may
have about Borrower or about any other matter relating to the Loan, and
Borrower hereby waives any rights to privacy Borrower may have with respect to
such matters. Borrower additionally waives any and all notices of sale of participation
interests, as well as all notices of any repurchase of such participation
interests. Borrower also agrees that the purchasers of any such participation
interests will be considered as the absolute owners of such interests in the
Loan and will have all the rights granted under the participation agreement or
agreements governing the sale of such participation interests. Borrower further
waives all rights of offset 

 

6

 

or counterclaim that it
may have now or later against Lender or against any purchaser of such a
participation interest and unconditionally agrees that either Lender or such
purchaser may enforce Borrower’s obligation under the Loan irrespective of the
failure or insolvency of any holder of any interest in the Loan. Borrower
further agrees that the purchaser of any such participation interests may
enforce its interests irrespective of any personal claims or defenses that
Borrower may have against Lender.

 

Governing Law. This Agreement
will be governed by federal law applicable to Lender and, to the extent not
preempted by federal law, the laws of the State of California without regard to
its conflicts of law  provisions. This Agreement has
been accepted by Lender In the State of California.

 

Choice of Venue. If there is a lawsuit. Borrower agrees
upon Lender’s request to submit to the jurisdiction of the courts of Los
Angeles County, State of California.

 

No Waiver by Lender. Lender shall not be deemed to have
waived any rights under this Agreement 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 Agreement 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 Agreement. No prior waiver by Lender,
nor any course of dealing between Lender and Borrower, or between Lender and any
Grantor, shall constitute a waiver of any of Lender’s rights or of any of
Borrower’s or any Grantor’s obligations as to any future transactions. Whenever
the consent of Lender is required under this Agreement, 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.

 

Notices. Any notice required to be given under
this Agreement shall be given in writing, and shall be effective when actually
delivered, when actually received by telefacsimile (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 mall postage prepaid, directed to the addresses shown near the
beginning of this Agreement. Any party may change its address for notices under
this Agreement 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, Borrower agrees to keep Lender informed at all times of Borrower’s
current address. Unless otherwise provided or required by law, if there is more
than one Borrower, any notice given by Lender to any Borrower is deemed to be
notice given to all Borrowers,

 

Severability. If a court of competent jurisdiction
finds any provision of this Agreement to be illegal, invalid, or unenforceable
as to any circumstance, that finding shall not make the offending provision
illegal, invalid, or unenforceable as to any other circumstance. If feasible,
the offending provision shall be considered modified so that it becomes legal,
valid and enforceable. If the offending provision cannot be so modified, it
shall be considered deleted from this Agreement Unless otherwise required by
law, the illegality, invalidity, or unenforceability of any provision of this
Agreement shall not affect the legality, validity or enforceability or any
other provision of this Agreement.

 

Subsidiaries and Affiliates of
Borrower. To the
extent the context of any provisions of this Agreement makes it appropriate,
including without limitation any representation, warranty or covenant, the word
“Borrower” as used in this Agreement shall include all of Borrower’s
subsidiaries and affiliates. Notwithstanding the foregoing however, under no
circumstances shall this Agreement be construed to require Lender to make any
Loan or other financial accommodation to any of Borrower’s subsidiaries or
affiliates.

 

Successors and Assigns. All covenants and agreements by or on
behalf of Borrower contained in this Agreement or any Related Documents shall
bind Borrower’s successors and assigns and shall inure to the benefit of Lender
and its successors and assigns. Borrower shall not, however, have the right to
assign Borrower’s rights under this Agreement or any interest therein, without
the prior written consent of Lender.

 

Survival of Representations and
Warranties.
Borrower understands and agrees that in making the Loan, Lender is relying on
all representations, warranties, and covenants made by Borrower in this
Agreement or in any certificate or other instrument delivered by Borrower to
Lender under this Agreement or the Related Documents. Borrower further agrees
that regardless of any investigation made by Lender, all such representations,
warranties and covenants will survive the making of the Loan and delivery to
Lender of the Related Documents, shall be continuing in nature, and shall
remain in full force and effect until such time as Borrower’s Indebtedness
shall be paid in full, or until this Agreement shall be terminated in the
manner provided above, whichever is the last to occur.

 

Time Is of the Essence. Time is of the essence in the
performance of this Agreement.

 

DEFINITIONS. The following capitalized words and
terms shall have the following meanings when used in this Agreement. 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 Agreement shall have the meanings attributed to such terms in the Uniform
Commercial Code. Accounting words and terms not otherwise defined in this
Agreement shall have the meanings assigned to them in accordance with generally
accepted accounting principles as in effect on the date of this Agreement:

 

Advance. The word “Advance” means a disbursement
of Loan funds made, or to be made, to Borrower or on Borrower’s behalf on a
line of credit or multiple advance basis under the terms and conditions of this
Agreement.

 

Agreement. The word “Agreement” means this
Business Loan Agreement, as this Business Loan Agreement may be amended or
modified from time to time, together with all exhibits and schedules attached
to this Business Loan Agreement from time to time.

 

Borrower. The word “Borrower” means Kennedy-Wilson, Inc.,
a Delaware corporation and includes all co-signers and co-makers signing the
Note and all their successors and assigns.

 

Collateral. The word “Collateral” means all
property and assets granted as collateral security for a Loan, whether real or
personal property, whether granted directly or indirectly, whether granted now
or in the future, and whether granted in the form of a security interest,
mortgage, collateral mortgage, deed of trust, assignment, pledge, crop pledge,
chattel mortgage, collateral chattel mortgage, chattel trust, manufacturer’s
lien, equipment trust, 

 

7

 

conditional sale, trust
receipt, lien, change, lien or title retention contract, lease or consignment
intended as a security device, or any other security or lien interest
whatsoever, whether created by law, contract, or otherwise.

 

Environmental Laws. The words “Environmental Laws” mean any
and all state, federal and local statutes, regulations and ordinances relating
to the protection of human health or the environment, including without
limitation the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. (“CERCLA”),
the Superfund Amendments and Reauthorization Act of 1986, Pub, L. No. 99-499
(“SARA”), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801,
et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901,
et seq., Chapters 6.5  through 7.7 of Division 20 of the
California Health and Safety Code, Section 25100, et seq., or other
applicable state or federal laws, rules, or regulations adopted pursuant
thereto.

 

Event of Default. The words “Event of Default” mean any of
the events of default set forth in this Agreement in the default section of
this Agreement.

 

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

 

Grantor. The word “Grantor” means each and all
of the persons or entities granting a Security Interest in any Collateral for
the Loan, including without limitation all Borrowers granting such a Security
Interest.

 

Guarantor. The word “Guarantor” means any
guarantor, surety, or accommodation party of any or all of the Loan.

 

Guaranty. The word “Guaranty” means the guaranty
from Guarantor to Lender, including without limitation a guaranty of all or
part of the Note.

 

Hazardous Substances. The words “Hazardous Substances” mean
materials that, because of their quantity, concentration or physical, chemical
or infectious characteristics, may cause or pose a present or potential hazard
to human health or the environment when improperly used, treated, stored,
disposed of, generated, manufactured, transported or otherwise handled. The
words “Hazardous Substances” are used in their very broadest sense and include
without limitation any and all hazardous or toxic substances, materials or
waste as defined by or listed under the Environmental Laws. The term “Hazardous
Substances” also includes, without limitation, petroleum and petroleum
by-products or any fraction thereof and asbestos.

 

Indebtedness. The word “Indebtedness” means the
indebtedness evidenced by the Note or Related Documents, including all
principal and interest together with all other indebtedness and costs and expenses
for which Borrower is responsible under this Agreement or under any of the
Related Documents.

 

Lender. The word “Lender” means Pacific Western
Bank, its successors and assigns.

 

Loan. The word “Loan” means any and all loans
and financial accommodations from Lender to Borrower whether now or hereafter
existing, and however evidenced, including without limitation those loans and
financial accommodations described herein or described on any exhibit or
schedule attached to this Agreement from time to time.

 

Note. The word “Note” means the Note executed
by Kennedy-Wilson, Inc., a Delaware corporation in the principal amount of
$28,000,000.00 dated July 29, 2009, together with all renewals of,
extensions of, modifications of, refinancings of, consolidations of, and
substitutions for the note or credit agreement.

 

Permitted Liens. The words “Permitted Liens” mean (1) liens
and security interests securing Indebtedness owed by Borrower to Lender; (2) liens
for taxes, assessments, or similar charges either not yet due or being
contested in good faith; (3) liens of materialmen, mechanics,
warehousemen, or carriers, or other like liens arising in the ordinary course
of business and securing obligations which are not yet delinquent; (4) purchase
money liens or purchase money security interests upon or in any property
acquired or held by Borrower in the ordinary course of business to secure
indebtedness outstanding on the date of this Agreement or permitted to be
incurred under the paragraph of this Agreement titled “Indebtedness and Liens”;
(5) liens and security interests which, as of the date of this Agreement,
have been disclosed to and approved by the Lender in writing; and (6) those
liens and security interests which in the aggregate constitute an immaterial
and insignificant monetary amount with respect to the net value of Borrower’s
assets.

 

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 Loan.

 

Security Agreement. The words ‘Security Agreement’ mean and
include without limitation any agreements. promises, covenants. arrangements,
understandings or other agreements, whether created by law, contract, or
otherwise, evidencing, governing. representing, or creating a Security
Interest,

 

Security Interest. The words “Security Interest” mean
without limitation, any and all types of collateral security, present and
future, whether in the form of a lien, charge, encumbrance, mortgage, deed of
trust, security deed, assignment, pledge, crop pledge, chattel mortgage,
collateral chattel mortgage, chattel trust, factor’s lien equipment trust,
conditional sale, trust receipt, lien or title retention contract, lease or
consignment intended as a security device, or any other security or lien
interest whatsoever whether created by law, contract, or otherwise.

 

8

 

BORROWER
ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT AND
BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED JULY 29,
2009.

 

	
  BORROWER:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Kennedy-Wilson, Inc., a Delaware corporation

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

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

  
	
  By:

  	
  /s/ William J. McMorrow

  	
   

  	
   

  	
  a Delaware corporation

  
	
   

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

  	
   

  	
   

  	
   

  
	
   

  	
  a Delaware corporation

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  LENDER:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PACIFIC WESTERN BANK

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signer

  	
   

  	
   

  	
   

  

 

9

 

	
  PROMISSORY
  NOTE

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No

  	
   

  	
  Call / Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  	
   

  	
  Initials

  	
   

  
	
  $28,000,000.00

  	
   

  	
  07-29-2009

  	
   

  	
  08-12-2014

  	
   

  	
  406268713

  	
   

  	
   

  	
   

  	
  Port #115131

  	
   

  	
  710

  	
   

  	
   

  	
   

  

 

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 item. Any item above containing “***” has been omitted due to text
length limitations.

 

	
  Borrower:

  	
   

  	
  Kennedy-Wilson, Inc.,
  a Delaware corporation

  9601
  Wilshire Boulevard, Suite 220  

  Beverly
  Hills, CA 90210

  	
   

  	
  Lender:

  	
   

  	
  Pacific
  Western Bank  

  Beverly
  Hills Office  

  9454
  Wilshire Boulevard  

  Beverly
  Hills, CA 90212

  

 

	
  Principal
  Amount: $28,000,000,00

  	
   

  	
  Date of Note: July 29, 2009

  

 

PROMISE
TO PAY.
Kennedy-Wilson. Inc., a Delaware corporation (“Borrower”) promises to pay to
Pacific Western Bank (“Lender”), or order, in lawful money of the United States
of America, the principal amount of Twenty-eight Million & 00/100
Dollars ($28,000,000.00), together with interest on the unpaid principal
balance from July 29, 2009, until paid in full.

 

PAYMENT. Subject to any payment changes
resulting from changes in the Index, Borrower will pay this loan in 59
principal payments of $466,667.00 each and one final principal and interest
payment of $468,254.34. Borrower’s first principal payment is due September 12,
2009, and all subsequent principal payments are due on the same day of each
month after that. In addition, Borrower will pay regular monthly payments of
all accrued unpaid interest due as of each payment date, beginning September 12,
2009, with all subsequent interest payments to be due on the same day of each
month after that. Borrower’s final payment due August 12, 2014,  will be for all principal and all accrued
Interest not yet paid. Unless otherwise agreed or required by applicable law,
payments will be
applied first to any accrued unpaid interest; then to principal; then to any
unpaid collection costs; and then to any late charges. Borrower will pay Lender
at Lender’s address shown above or at  such other place as Lender may designate
in writing.

 

VARIABLE
INTEREST RATE.
The interest rate on this Note is subject to change from time to
time based on
changes in an index which is the Lender’s Base Rate (the “Index”). The Index is
not necessarily the lowest rate charged by Lender on its loans and is set by
Lender in its sole discretion. If the Index becomes unavailable during the term
of this loan, Lender may designate a substitute index after notifying Borrower.
Lender will tell Borrower the current Index rate upon Borrower’s request. The
interest rate change will not occur more often than each day. Borrower
understands that Lender may make loans based on other rates as well. The Index
currently is 4.000% per annum. Interest on the unpaid principal balance of this
Note will be calculated as described in the “INTEREST CALCULATION METHOD” paragraph using a rate
equal to the Index, resulting in an initial rate of 4.000%. NOTICE: Under no
circumstances will the interest rate on this Note be more than the maximum rate
allowed by applicable law.

 

INTEREST
CALCULATION METHOD. Interest on this Note is computed on a 365/360 basis; that
is, by applying the ratio of the interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual
number of days the principal balance is outstanding. All interest payable under
this Note is computed using this method.

 

PREPAYMENT. Borrower may pay without penalty all or
a portion of the amount owed earlier than it is due. Early payments will not,
unless agreed to by Lender in writing, relieve Borrower of Borrower’s
obligation to continue to make payments under the payment schedule. Rather,
early payments will reduce the principal balance due and may result in Borrower’s
making fewer payments. Borrower agrees not to send Lender payments marked “paid
in full”, “without recourse”, or similar language. If Borrower sends such a
payment, Lender may accept it without losing any of Lender’s rights under this
Note, and Borrower will remain obligated to pay any further amount owed to
Lender. All written communications concerning disputed amounts, including any
check or other payment instrument that indicates that the payment constitutes “payment
in full” of the amount owed or that is tendered with other conditions or
limitations or as full satisfaction of a disputed amount must be mailed or
delivered to: Pacific Western Bank, Beverly Hills Office, 9454 Wilshire
Boulevard, Beverly Hills, CA 90212.

 

LATE
CHARGE. If a
payment is 10 days or more late, Borrower will be charged 5.000% of the
regularly scheduled payment or $10.00, whichever is greater.

 

INTEREST
AFTER DEFAULT.
Upon default, the interest rate on this Note shall, if permitted under
applicable law, immediately increase by adding a 5.000 percentage point margin
(“Default Rate Margin”). The Default Rate Margin shall also apply to each
succeeding interest rate change that would have applied had there been no
default.

 

DEFAULT. Each of the following shall constitute
an event of default (“Event of Default”) under this Note:

 

Payment Default. Borrower falls to make any payment when
due under this Note.

 

Other Defaults. Borrower falls to comply with or to
perform any other term, obligation, covenant or condition contained in this
Note or in any of the related documents or to comply with or to perform any
term, obligation, covenant or condition contained in any other agreement
between Lender and Borrower.

 

Default in Favor of Third Parties. Borrower or any Grantor defaults under
any loan, extension of credit, security agreement. purchase or safes agreement,
or any other agreement, in favor of any other creditor or person that may
materially affect any of Borrower’s property or Borrower’s ability to repay
this Note or perform Borrower’s obligations under this Note or any of the
related documents.

 

False Statements. Any warranty, representation or
statement made or furnished to Lender by Borrower or on Borrower’s behalf under
this Note or the related documents is false or misleading in any material
respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.

 

Insolvency. The dissolution or termination of
Borrower’s existence as a going business, the insolvency of Borrower, the
appointment of a receiver for any part of Borrower’s property, any assignment
for the benefit of creditors, any type of creditor workout, or the commencement
of any proceeding under any bankruptcy or insolvency laws by or against
Borrower.

 

 

Loan No. 406268713

 

Creditor or Forfeiture
Proceedings. Commencement
of foreclosure or forfeiture proceedings, whether by judicial proceeding,
self-help, repossession or any ether method, by any creditor of Borrower or by
any governmental agency against any collateral securing the loan. This includes
a garnishment of any of Borrower’s accounts, including deposit accounts, with
Lender. However, this Event of Default shall not apply if there is a good faith
dispute by Borrower as to the validity or reasonableness of the claim which is
the basis of the creditor or forfeiture proceeding and if Borrower
gives Lender written notice of the creditor or forfeiture proceeding and
deposits with Lender monies or a surety bond for the creditor or forfeiture
proceeding, in an amount determined by Lender, in its sole discretion, as being
an adequate reserve or bond for the dispute.

 

Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser,
surety, or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes
incompetent, or revokes or disputes the validity of, or liability under, any
guaranty of the indebtedness evidenced by this Note.

 

Change In Ownership. Any change in ownership of twenty-five
percent (25%) or more of the common stock of Borrower.

 

Adverse Change. A material adverse change occurs in
Borrower’s financial condition, or Lender believes the prospect of payment or
performance of this Note is impaired.

 

Insecurity. Lender in good faith believes itself
insecure.

 

Cure Provisions. If any default, other than a default in
payment is curable arid if Borrower has not been given a notice of a breach of
the same provision of this Note within the preceding twelve (12) months, it may
be cured if Borrower, after Lender sends written notice to Borrower demanding
cure of such default: (1) cures the default within fifteen (15) days, or (2) if
the cure requires more than fifteen (15) days, immediately initiates steps
which Lender deems in Lender’s sole discretion to be sufficient to cure the
default and thereafter continues and completes all reasonable and necessary
steps sufficient to produce compliance as soon as reasonably practical.

 

LENDER’S
RIGHTS. Upon
default, Lender may declare the entire unpaid principal balance under this Note
and all accrued unpaid interest immediately due, and then Borrower will pay
that amount.

 

ATTORNEYS’  FEES;
EXPENSES. Lender may hire or pay someone else to help collect this
Note if Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender’s attorneys’ fees
and Lender’s legal expenses, whether or not there is a lawsuit, including
attorneys’ fees, expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), and appeals. Borrower also
will pay any court costs, in addition to all other sums provided by law.

 

GOVERNING
LAW. This Note will be governed by federal law applicable to Lender and, to the extent not
preempted by federal law, the laws of the State of California without regard to
its conflicts of law provisions. This Note has been accepted by Lender In the
State of California.

 

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

 

RIGHT OF
SETOFF. To the
extent permitted by applicable law, Lender reserves a right of setoff in all
Borrower’s accounts with Lender (whether checking, savings, or some other
account). This includes all accounts Borrower holds jointly with someone else
and all accounts Borrower may open in the future. However, this does not
include any IRA or Keogh accounts, or any trust accounts for which setoff would
be prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the debt against any and
all such accounts.

 

CROSS
DEFAULT. An Event
of Default under the Note shall also constitute an Event of Default under any
and all Notes or obligations executed by Kennedy-Wilson, Inc., a Delaware
corporation or any other related entity or affiliate.

 

SUCCESSOR
INTERESTS. The
terms of this Note shall be binding upon Borrower, and upon Borrower’s heirs,
personal representatives, successors and assigns, and shall inure to the
benefit of Lender and its successors and assigns.

 

GENERAL
PROVISIONS. If
any part of this Note cannot be enforced, this fact will not affect the rest of
the Note. Lender may delay or forgo enforcing any of its rights or remedies
under this Note without losing them. Borrower and any other person who signs,
guarantees or endorses this Note, to the extent allowed by law, waive any
applicable statute of limitations, presentment, demand for payment, and notice
of dishonor. Upon any change in the terms of this Note, and unless otherwise
expressly stated in writing no party who signs this Note, whether as maker,
guarantor, accommodation maker or endorser, shall be released from liability.
All such parties agree that Lender may renew or extend (repeatedly and for any
length of time) this loan or release any party or guarantor or collateral; or
impair, fall to realize upon or perfect Lender’s security interest in the
collateral; and take any other action deemed necessary by Lender without the
consent of’ or notice to anyone. All such parties also agree that Lender may
modify this loan without the consent of or notice to anyone other than the
Party with whom the modification is made. The obligations under this Note are
joint and several.

 

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES
TO THE TERMS OF THE NOTE.

 

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

 

	
  BORROWER: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Kennedy-Wilson, Inc.,
  a Delaware corporation 

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

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

  
	
  By:  

  	
  /s/ William J. McMorrow 

  	
   

  	
   

  	
  a
  Delaware corporation

  
	
   

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

  	
   

  	
   

  
	
   

  	
  a
  Delaware corporation

  	
   

  	
   

  

 

2

 

	
  CORPORATE RESOLUTION TO BORROW

  
	
   

  
	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No

  	
   

  	
  Call / Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  	
   

  	
  Initials

  	
   

  
	
  $28,000,000.00

  	
   

  	
  07-29-2009

  	
   

  	
  08-12-2014

  	
   

  	
  406268713

  	
   

  	
   

  	
   

  	
  Port #115131

  	
   

  	
  710

  	
   

  	
   

  	
   

  

 

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 item. Any item above containing “***” has been omitted due to text
length limitations.

 

	
  Borrower:

  	
   

  	
  Kennedy-Wilson, Inc.,
  a Delaware corporation

  9601
  Wilshire Boulevard, Suite 220  

  Beverly
  Hills, CA 90210

  	
   

  	
  Lender:

  	
   

  	
  Pacific
  Western Bank  

  Beverly
  Hills Office  

  9454
  Wilshire Boulevard  

  Beverly
  Hills, CA 90212

  

 

I, THE
UNDERSIGNED. DO HEREBY CERTIFY THAT:

 

THE
CORPORATION’S EXISTENCE. The complete and correct name of the Corporation is Kennedy-Wilson.
Inc., a Delaware corporation (“Corporation”). The Corporation is a corporation
for profit which is, and at all times shall be, duly organized, validly
existing, and in good standing under and by virtue of the laws of the State of
Delaware. The Corporation is duly authorized to transact business in the State
of California and all other states in which the Corporation is doing business,
having obtained all necessary filings, governmental licenses and approvals for
each state in which the Corporation is doing business. Specifically, the
Corporation is, and at all times shall be, duly qualified as a foreign
corporation in all states in which the failure to so qualify would have a material
adverse effect on its business or financial condition. The Corporation has the
full power and authority to own its properties and to transact the business in
which it is presently engaged or presently proposes to engage. The Corporation
maintains an office at 9601 Wilshire Boulevard, Suite 220, Beverly Hills,
CA 90210. Unless the Corporation has designated otherwise in writing, the
principal office is the office at which the Corporation keeps its books and
records. The Corporation will notify Lender prior to any change in the location
of the Corporation’s state of organization or any change in the Corporation’s
name. The Corporation shall do all things necessary to preserve and to keep in
full force and effect its existence, rights and privileges, and shall comply
with all regulations, rules, ordinances, statutes, orders and decrees of any
governmental or quasi-governmental authority or court applicable to the
Corporation and the Corporation’s business activities.

 

RESOLUTIONS
ADOPTED. At a
meeting of the Directors of the Corporation, or if the Corporation is a close
corporation having no Board of Directors then at a meeting of the Corporation’s
shareholders, duly called and held on _______________, at which a quorum was
present and voting, or by other duly authorized action in lieu of a meeting,
the resolutions set forth in this Resolution were adopted.

 

OFFICERS. The following named persons are
officers of Kennedy-Wilson. Inc., a Delaware corporation:

 

	
  NAMES

  	
   

  	
  TITLES

  	
   

  	
  AUTHORIZED

  	
   

  	
  ACTUAL SIGNATURES

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  William
  J. McMorrow

  	
   

  	
  CEO

  	
   

  	
  Y

  	
   

  	
  X

  	
  /s/
  William J. McMorrow

  	
  (Seal)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Freeman
  A. Lyle

  	
   

  	
  CFO/Secretary

  	
   

  	
  Y

  	
   

  	
  X

  	
   

  	
  (Seal)

  

 

ACTIONS
AUTHORIZED. Any
two (2) of the authorized persons listed above may enter into any
agreements of any nature with Lender, and those agreements will bind the
Corporation. Specifically, but without limitation, any two (2) of such
authorized persons are authorized. empowered, and directed to do the following
for and on behalf of the Corporation:

 

Borrow Money. To borrow, as a cosigner or otherwise,
from time to time from Lender, on such terms as may be agreed upon between the
Corporation and Lender, such sum or sums of money as In their judgment should
be borrowed, without limitation.

 

Execute Notes. To execute and deliver to Lender the
promissory note or notes, or other evidence of the Corporation’s credit
accommodations, on Lender’s forms, at such rates of interest and on such terms
as may be agreed upon, evidencing the sums of money so borrowed or any of the
Corporation’s indebtedness to Lender, and also to execute and deliver to Lender
one or more renewals, extensions, modifications, refinancings, consolidations,
or substitutions for one or more of the notes, any portion of the notes, or any
other evidence of credit
accommodations.

 

Execute Security Documents. To execute and deliver to Lender the
forms of mortgage, deed of trust, pledge agreement, hypothecation agreement,
and other security agreements and financing statements which Lender may require
and which shall evidence the terms and conditions under and pursuant to which
such liens and encumbrances, or any of them, are given; and also to execute and
deliver to Lender any other written instruments, any chattel paper, or any
other collateral, of any kind or nature, which Lender may deem necessary or
proper in connection with or pertaining to the giving of the liens and
encumbrances. Notwithstanding the foregoing, any one of the above authorized
persons may execute, deliver, or record financing statements.

 

Negotiate Items. To draw, endorse, end discount with
Lender all drafts, trade acceptances, promissory notes. or other evidences of
indebtedness payable to or belonging to the Corporation or in which the
Corporation may have an interest, and either to receive cash for the same or to
cause such proceeds to be credited to the Corporation’s account with Lender, or
to cause such other disposition of the proceeds derived therefrom as they may
deem advisable.

 

Further Acts. In the case of lines of credit, to
designate additional or alternate individuals as being authorized to request
advances under such lines, and in all cases, to do and perform such other acts
and things, to pay any and all fees and costs, and to execute and deliver such
other documents and agreements as the officers may in their discretion deem
reasonably necessary or proper in order to carry into effect the provisions of
this Resolution.

 

 

Loan No. 406268713

 

ASSUMED
BUSINESS NAMES.
The Corporation has filed or recorded all documents or filings required by law
relating to all assumed business names used by the Corporation. Excluding the
name of the Corporation, the following is a complete list of all assumed
business names under which the Corporation does business: None.

 

NOTICES
TO LENDER. The
Corporation will promptly notify Lender in writing at Lender’s address shown
above (or such other addresses as Lender may designate from time to time) prior
to any (A) change in the Corporation’s name; (B) change in the Corporation’s
assumed business name(s); (C) change in the management of the Corporation;
(D) change in the authorized signer(s); (E) change in the Corporation’s
principal office address; (F) change in the Corporation’s state of
organization; (G) conversion of the Corporation to a new or different type
of business entity; or (H) change in any other aspect of the Corporation
that directly or indirectly relates to any agreements between the Corporation
and Lender. No change in the Corporation’s name or state of organization will
take effect until after Lender has received notice.

 

CERTIFICATION
CONCERNING OFFICERS AND RESOLUTIONS. The officers named above are duly elected,
appointed, or employed by or for the Corporation, as the case may be, and
occupy the positions set opposite their respective names. This Resolution now stands
of record on the books of the Corporation, is in full force and effect, and has
not been modified or revoked In any manner whatsoever.

 

NO
CORPORATE SEAL.
The Corporation has no corporate seal, and therefore, no seal is affixed to
this Resolution.

 

CONTINUING
VALIDITY. Any and
all acts authorized pursuant to this Resolution and performed prior to the
passage of this Resolution are hereby ratified and approved. This Resolution
shall be continuing, shall remain in full force and effect and Lender may rely
on it until written notice of its revocation shall have been delivered to and
received by Lender at Lender’s address shown above (or such addresses as Lender
may designate from time to time). Any such notice shall not affect any of the
Corporation’s agreements or commitments in effect at the time notice is given.

 

IN
TESTIMONY WHEREOF, I have hereunto set my hand and attest that the signatures
set opposite the names listed above are their genuine signatures.

 

I have
read all the provisions of this Resolution, and I personally and on behalf of
the Corporation certify that all statements and representations made in this
Resolution are true and correct. This Corporate Resolution to Borrower is dated
July 29, 2009.

 

THIS
RESOLUTION IS GIVEN UNDER SEAL AND IT IS INTENDED THAT THIS RESOLUTION IS AND
SHALL CONSTITUTE AND HAVE THE EFFECT OF A SEALED INSTRUMENT ACCORDING TO LAW.

 

	
   

  	
  CERTIFIED TO AND ATTESTED BY:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  X 

  	
   

  	
  (Seal)

  
	
   

  	
  Freeman A. Lyle, CFO/Secretary of

  
	
   

  	
  Kennedy-Wilson, Inc., a Delaware
  corporation

  

 

2

 

	
  DISBURSEMENT REQUEST AND AUTHORIZATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No

  	
   

  	
  Call / Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  	
   

  	
  Initials

  	
   

  
	
  $28,000,000.00

  	
   

  	
  07-29-2009

  	
   

  	
  08-12-2014

  	
   

  	
  406268713

  	
   

  	
   

  	
   

  	
  Port #115131

  	
   

  	
  710

  	
   

  	
   

  	
   

  

 

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 item. Any item above containing “***” has been omitted due to text
length limitations.

 

	
  Borrower:

  	
   

  	
  Kennedy-Wilson, Inc.,
  a Delaware corporation

  9601
  Wilshire Boulevard, Suite 220  

  Beverly
  Hills, CA 90210

  	
   

  	
  Lender:

  	
   

  	
  Pacific
  Western Bank  

  Beverly
  Hills Office  

  9454
  Wilshire Boulevard  

  Beverly
  Hills, CA 90212

  

 

LOAN TYPE. This is a Variable Rate Nondisclosable
Loan to a Corporation far $28,000,000.00 due on August 12, 2014.

 

PRIMARY
PURPOSE  OF
LOAN. The primary
purpose of this loan is for:

 

o Personal, Family, or Household Purposes or Personal
Investment.

 

x Business (Including Real Estate Investment).

 

SPECIFIC
PURPOSE. The
specific purpose of this loan is:  Pay
off of existing loans with Lender and to reduce debt at US Bank.

 

DISBURSEMENT
INSTRUCTIONS.
Borrower understands that no loan proceeds will be disbursed until all of
Lender’s conditions for making the loan have been satisfied. Please disburse
the loan proceeds of $28,000,000.00, together with funds contributed of
$38,577.74, as follows:

 

	
  Other Disbursements:

  	
   

  	
  $

  	
  28,038,577.74

  	
   

  
	
  $5,014.999.99 Pay Off Loan #185255756

  	
   

  	
   

  	
   

  
	
  $5,009.999.99 Pay Off Loan #406267404

  	
   

  	
   

  	
   

  
	
  $4,013,577.76 Pay Off Loan #406267222

  	
   

  	
   

  	
   

  
	
  $14,000,000.00 Wire to US Bank

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Amount Contributed by Borrower:

  	
   

  	
   

  	
   

  
	
  $38,577.74 Additional Funds From Borrower to pay
  off above loans 

  	
   

  	
  $

  	
  (38,577.74

  	
  )

  
	
   

  	
   

  	
   

  	
   

  
	
  Note Principal:

  	
   

  	
  $

  	
  28,000.000.00

  	
   

  
						

 

PAYOFF
VERBIAGE.
Borrower agrees that, for the purposes of documentation, the payoff for
existing loans #185255756, #406267404 and #406267222 was established as of July 29,
2009. After July 29, 2009, additional interest will accrue on these loans
each day until the actual payoff occurs. This interest amount, as well as any
unpaid applicable fees or charges, shall also be added to the actual payoff
amounts.

 

FINANCIAL
CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND WARRANTS TO
LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND THAT THERE
HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER’S FINANCIAL CONDITION AS
DISCLOSED IN BORROWER’S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS
AUTHORIZATION IS DATED JULY 29, 2009.

 

	
  BORROWER:  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Kennedy-Wilson, Inc.,
  a Delaware corporation 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:
  

  	
  /s/
  William J. McMorrow 

  	
   

  	
  By:
  

  	
   

  
	
   

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

  a Delaware corporation

  	
   

  	
   

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

  a Delaware corporation

  

 

 

	
  LIST OF DOCUMENTS SENT

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No

  	
   

  	
  Call / Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  	
   

  	
  Initials

  	
   

  
	
  $28,000,000.00

  	
   

  	
  07-29-2009

  	
   

  	
  08-12-2014

  	
   

  	
  406268713

  	
   

  	
   

  	
   

  	
  Port #115131

  	
   

  	
  710

  	
   

  	
   

  	
   

  

 

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 item. Any item above containing “***” has been omitted due to text
length limitations.

 

	
  Borrower:

  	
   

  	
  Kennedy-Wilson, Inc.,
  a Delaware corporation

  9601
  Wilshire Boulevard, Suite 220  

  Beverly
  Hills, CA 90210

  	
   

  	
  Lender:

  	
   

  	
  Pacific
  Western Bank  

  Beverly
  Hills Office  

  9454
  Wilshire Boulevard  

  Beverly
  Hills, CA 90212

  

 

Documents
sent to Branch on (07/29/09):

 

Business Loan Agreement

Corporate Resolution

Disbursement Request and Authorization

Promissory Note.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}]]