Document:

Exhibit
10.105

 

BANK OF AMERICA -
CONFIDENTIAL PAGE: 1

 

DATE: OCTOBER 26, 2007

 

AMENDMENT TO IRREVOCABLE
STANDBY LETTER OF CREDIT NUMBER: 3078943

 

AMENDMENT NUMBER 2

 

ISSUING
BANK

 

BANK
OF AMERICA, N.A.

1000 W. TEMPLE STREET

7TH FLOOR, CA9-705-07-05 

LOS ANGELES, CA 90012-1514

 

BENEFICIARY

 

CITY OF WALNUT CREEK 

1666 NORTH MAIN STREET 

WALNUT CREEK, CA 94596

 

APPLICANT

FAIRWAYS 340 LLC

9601 WILSHIRE BLVD. 

SUITE 220

BEVERLY HILLS, CA 90210

 

RE:  SUBDIVISION NO, 8960, CATEGORY II, PHASE 1

 

THIS
AMENDMENT IS TO BE CONSIDERED AN INTEGRAL PART OF THE ABOVE CREDIT AND
MUST BE ATTACHED THERETO.

 

THE
ABOVE MENTIONED CREDIT IS AMENDED AS FOLLOWS:

 

1.                                       THE AMOUNT OF THIS CREDIT HAS BEEN INCREASED BY USD 7,038.00 THE AVAILABLE
AMOUNT OF THE CREDIT IS NOW USD 303,632.00

 

2.                                       THE EXPIRATION DATE IS AMENDED TO: MAY 31,
2012. ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.

 

IF
YOU REQUIRE ANY ASSISTANCE OR HAVE ANY
QUESTIONS REGARDING THIS AMENDMENT, PLEASE CALL 213-481-7833,

 

	
  /s/ Illegible

  	
   

  
	
  AUTHORIZED
  SIGNATURE

  	
   

  

 

THIS
DOCUMENT CONSISTS OF 1 PAGE(S)-

 

Bolivar
Carrillo

 

ORIGINAL

 

 

BANK
OF AMERICA - CONFIDENTIAL PAGE: 1

 

DATE:
OCTOBER 26, 2007

 

AMENDMENT
TO IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER: 3079732

 

AMENDMENT
NUMBER 1

 

	
  BENEFICIARY

  	
  APPLICANT

  
	
   

  	
   

  
	
  CITY
  OF WALNUT CREEK

  	
  FAIRWAYS
  340 LIJC

  
	
  1666
  NORTH MAIN STREET

  	
  9601
  WILSHIRE BLVD. SUITE 220

  
	
  WALNUT
  CREEK, CA 94596

  	
  BEVERLY
  HILLS, CA 90210

  

 

ISSUING BANK

 

BANK OF AMERICA, N.A.

1000 W. TEMPLE STREET

7TH FLOOR, CA9-705-07-05 

LOS ANGELES, CA 90012-1514

 

RE:
 SUBDIVISION NO. 8960, CATEGORY II,
PHASE 7

 

THIS
AMENDMENT IS TO BE CONSIDERED AN INTEGRAL PART OF THE ABOVE CREDIT AND MUST BE ATTACHED THERETO.

 

THE
ABOVE MENTIONED CREDIT IS AMENDED AS FOLLOWS:

 

1.                                       THE AMOUNT OF THIS CREDIT HAS BEEN
INCREASED BY USD 131,054.00 THE AVAILABLE AMOUNT OF THE CREDIT IS NOW USD
1,629,762.00

 

2.                                       THE EXPIRATION
DATE IS AMENDED TO: MAY 31, 2012. ALL OTHER TERMS AND CONDITIONS REMAIN
UNCHANGED,

 

IF
YOU REQUIRE ANY ASSISTANCE OR HAVE ANY QUESTIONS REGARDING THIS AMENDMENT,
PLEASE CALL 213-481-7833.

 

	
  /s/ Illegible

  	
   

  
	
  AUTHORIZED
  SIGNATURE

  	
   

  

 

THIS
DOCUMENT CONSISTS OF 1 PAGE(S).

 

Bolivar
Carrillo

 

 

BANK
OF AMERICA - CONFIDENTIAL PAGE: 1

 

DATE:
OCTOBER 26, 2007

 

AMENDMENT TO IRREVOCABLE
STANDBY LETTER OF CREDIT NUMBER: 3079731

 

AMENDMENT NUMBER 1

 

	
  ISSUING BANK

  	
   

  
	
   

  	
   

  
	
  BANK
  Of AMERICA, N.A.

  	
  APPLICANT

  
	
  1000
  W. TEMPLE STREET

  	
   

  
	
  7TH
  FLOOR, CA9-705-07-05

  	
  FAIRWAYS
  340 LLC

  
	
  LOS
  ANGELES, CA 90012-1514

  	
  9601
  WILSHIRE BLVD.

  
	
   

  	
  SUITE
  220

  
	
  BENEFICIARY

  	
  BEVERLY
  HILLS, CA 90210

  

 

CITY OF WALNUT CREEK 

1666 NORTH MAIN STREET 

WALNUT CREEK, CA 94596

 

RE:
SUBDIVISION NO. 8960, CATEGORY II, PHASE 8

 

THIS AMENDMENT IS TO BE CONSIDERED AN INTEGRAL PART OF
THE ABOVE CREDIT AND MUST BE ATTACHED THERETO.

 

THE ABOVE MENTIONED
CREDIT IS AMENDED AS FOLLOWS;

 

1.                                       THE AMOUNT OF THIS CREDIT HAS BEEN
INCREASED BY USD 131,959.00 THE AVAILABLE AMOUNT OF THE CREDIT IS NOW USD
1,641,017.00

 

2.                                       THE EXPIRATION
DATE IS AMENDED TO: MAY 31, 2012.  ALL OTHER TERMS AND CONDITIONS REMAIN
UNCHANGED.

 

IF
YOU REQUIRE ANY ASSISTANCE OR HAVE ANY QUESTIONS REGARDING THIS AMENDMENT,
PLEASE CALL 213-481-7833.

 

	
  /s/ Illegible

  	
   

  
	
  AUTHORIZED
  SIGNATURE

  	
   

  

 

Bolivar Carrillo

 

THIS DOCUMENT CONSISTS OF 1 PAGE(S).

 

ORIGINAL

 

 

BANK
OF AMERICA - CONFIDENTIAL PAGE: 1

 

DATE:
OCTOBER 26, 2007

 

AMENDMENT TO IRREVOCABLE
STANDBY LETTER OF CREDIT NUMBER: 3079733

 

AMENDMENT
NUMBER 1

 

	
  ISSUING
  BANK

  	
  BENEFICIARY

  
	
   

  	
   

  
	
  BANK
  OF AMERICA, N.A.

  	
  CITY
  OF WALNUT CREEK

  
	
  1000
  W. TEMPLE STREET

  	
  1666
  NORTH MAIN STREET

  
	
  7TH
  FLOOR, CA9-705-07-05

  	
  WALNUT
  CREEK, CA 94596

  
	
  LOS
  ANGELES, CA 90012-1514

  	
   

  
	
   

  	
  APPLICANT

  
	
   

  	
   

  
	
   

  	
  FAIRWAYS 340 LLC

  
	
   

  	
  9601
  WILSHIRE BLVD. SUITE 220

  
	
   

  	
  BEVERLY
  HILLS, CA 90210

  

 

RE:
SUBDIVISION NO. 8960, CATEGORY II, PHASE 6

 

THIS AMENDMENT IS TO BE
CONSIDERED AN INTEGRAL PART OF THE ABOVE CREDIT AND MUST BE ATTACHED
THERETO.

 

THE ABOVE MENTIONED
CREDIT IS AMENDED AS FOLLOWS:

 

1.                                       THE AMOUNT OF THIS CREDIT HAS BEEN
INCREASED BY USD 182,891.00 THE AVAILABLE AMOUNT OF THE CREDIT IS NOW USD 2,274,4D5.00

 

2.                                       THE EXPIRATION
DATE IS AMENDED TO I MAY 31, 2012, ALL OTHER TERMS AND
CONDITIONS REMAIN UNCHANGED.

 

IF
YOU REQUXRE ANY ASSISTANCE OR HAVE ANY QUESTIONS REGARDING THIS AMENDMENT,
PLEASE CALL 213-481-7833.

 

	
  /s/ Illegible

  	
   

  
	
  AUTHORIZED
  SIGNATURE

  	
   

  

 

Bolivar Carrillo

 

THIS DOCUMENT  CONSISTS OF 1 PAGE ( S) .

 

ORIGINAL

 

 

BANK
OF AMERICA - CONFIDENTIAL PAGE: 1

 

DATE:
OCTOBER 26, 2007

 

AMENDMENT
TO IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER: 3079734

 

AMENDMENT
NUMBER 2

 

	
  ISSUING
  BANK

  	
  APPLICANT

  
	
   

  	
   

  
	
  BANK OF AMERICA, N.A.

  	
  FAIRWAYS 340 LLC

  
	
  1000
  W. TEMPLE STREET

  	
  9601 WILSHIRE BLVD.

  
	
  7TH
  FLOOR, CA9-705-07-05

  	
  SUITE 220

  
	
  LOS
  ANGELES, CA 90012-1514

  	
  BEVERLY HILLS, CA 90210

  

 

BENEFICIARY

 

CITY
OF WALNUT CREEK 

1666 NORTH MAIN STREET 

WALNUT CREEK, CA 94596

 

RE:
SUBDIVISION NO. 8960, CATEGORY II, PHASE 5

 

THIS AMENDMENT IS TO BE
CONSIDERED AN INTEGRAL PART OF TEE
ABOVE CREDIT AND MUST BE ATTACHED THERETO.

 

THE ABOVE MENTIONED
CREDIT IS AMENDED AS FOLLOWS

 

1.                                       THE AMOUNT OF THIS CREDIT HAS BEEN
INCREASED BY USD 377.00 THE AVAILABLE AMOUNT OF THE CREDIT IS NOW USD
108,650.00

 

2.                                       THE EXPIRATION
DATE IS AMENDED TO: MAY 31, 2012, ALL OTHER TERMS AND CONDITIONS REMAIN
UNCHANGED.

 

IF
YOU REQUIRE ANY ASSISTANCE OR HAVE ANY QUESTIONS REGARDING THIS AMENDMENT,
PLEASE CALL 213-481-7833,

 

	
  /s/ Illegible

  	
   

  
	
  AUTHORIZED
  SIGNATURE

  	
   

  

 

Bolivar Carrillo

 

THIS
DOCUMENT CONSISTS OF 1 PAGE(S)

 

COPY

 

 

BANK
OF AMERICA - CONFIDENTIAL PAGE: 1

 

DATE:
OCTOBER 26, 2007

 

AMENDMENT TO IRREVOCABLE
STANDBY LETTER OF CREDIT NUMBER: 3079737

 

AMENDMENT NUMBER 2

 

	
  ISSUING
  BANK

  	
  APPLICANT
  .

  
	
   

  	
   

  
	
  BANK OF AMERICA, N.A.

  	
  FAIRWAYS 340 LLC

  
	
  1000
  W. TEMPLE STREET

  	
  9601 WILSHIRE BLVD.

  
	
  7TH
  FLOOR, CA9-705-07-05

  	
  SUITE 220

  
	
  LOS
  ANGELES, CA 90012-1514

  	
  BEVERLY HILLS, CA 90210

  

 

BENEFICIARY

 

CITY OF WALNUT CREEK 

1666 NORTH MAIN STREET 

WALNUT CREEK, CA 94596

 

RE:
SUBDIVISION NO, 8960, CATEGORY II, PHASE 2

 

THIS AMENDMENT IS TO BE
CONSIDERED AN INTEGRAL PART OF THE ABOVE CREDIT AND MUST BE ATTACHED
THERETO.

 

THE ABOVE MENTIONED
CREDIT IS AMENDED AS FOLLOWS:

 

1.                                       THE AMOUNT OF THIS CREDIT HAS BEEN
INCREASED BY USD 10,669.00 THE AVAILABLE AMOUNT OF THE CREDIT IS NOW USD 256,369.00

 

2.                                       THE EXPIRATION
DATE IS AMENDED TO: MAY 31, 2012. ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.

 

IF
YOU REQUIRE ANY ASSISTANCE OR HAVE ANY QUESTIONS REGARDING THIS
AMENDMENT, PLEASE CALL 213-481-7833.

 

	
  /s/ Illegible

  	
   

  
	
  AUTHORIZED
  SIGNATURE

  	
   

  

 

Bolivar Carrillo

 

THIS DOCUMENT CONSISTS OF 1 PAGE (S)

 

ORIGINAL

 

 

BANK OF AMERICA -
CONFIDENTIAL PAGE: 1

 

DATE:
OCTOBER 26, 2007

 

AMENDMENT TO IRREVOCABLE
STANDBY LETTER OF CREDIT NUMBER: 3079736

 

AMENDMENT NUMBER 2

 

	
  ISSUING
  BANK

  	
  BENEFICIARY

  
	
   

  	
   

  
	
  BANK
  OF AMERICA, N.A.

  	
  CITY
  OF WALNUT CREEK

  
	
  1000
  W- TEMPLE STREET

  	
  1666
  NORTH MAIN STREET

  
	
  7TH
  FLOOR, CA9-705-07-05

  	
  WALNUT
  CREEK, CA 94596

  
	
  LOS
  ANGELES, CA 90012-1514

  	
   

  
	
   

  	
  APPLICANT

  
	
   

  	
   

  
	
   

  	
  FAIRWAYS 340 LLC

  
	
   

  	
  9601
  WILSHIRE BLVD. SUITE 220

  
	
   

  	
  BEVERLY
  HILLS, CA 90210

  

 

RE: SUBDIVISION NO. 89.50,
CATEGORY II, PHASE 3

 

THIS AMENDMENT IS TO BE
CONSIDERED AN INTEGRAL PART OF THE ABOVE CREDIT AND MUST BE ATTACHED
THERETO.

 

THE ABOVE MENTIONED
CREDIT IS AMENDED AS FOLLOWS:

 

1.                                       THE AMOUNT OF THIS CREDIT HAS BEEN
INCREASED BY USD 2,545.00 THE AVAILABLE AMOUNT OF THE CREDIT IS NOW USD 150,910.00

 

2.                                       THE EXPIRATION
DATE IS AMENDED TO: MAY 31, 2012. ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.

 

IF YOU REQUIRE ANY
ASSISTANCE OR HAVE ANY QUESTIONS REGARDING THIS AMENDMENT. PLEASE CALL 213-481-7833.

 

	
  /s/ Illegible

  	
   

  
	
  AUTHORIZED
  SIGNATURE

  	
   

  

 

THIS
DOCUMENT CONSISTS OF 1 PAGE(S).

 

Bolivar
Carillo

 

ORIGINAL

 

 

BANK OF AMERICA -
CONFIDENTIAL PAGE: 1

 

DATE: OCTOBER 26, 2007

 

AMENDMENT TO IRREVOCABLE
STANDBY LETTER OF CREDIT NUMBER: 3079735

 

AMENDMENT NUMBER 1

 

	
  ISSUING
  BANK

  	
  BENEFICIARY

  
	
   

  	
   

  
	
  BANK
  OF AMERICA, N.A.

  	
  CITY
  OF WALNUT CREEK

  
	
  1000
  W- TEMPLE STREET

  	
  1666
  NORTH MAIN STREET

  
	
  7TH
  FLOOR, CA9-705-07-05

  	
  WALNUT
  CREEK, CA 94596

  
	
  LOS
  ANGELES, CA 90012-1514

  	
   

  
	
   

  	
  APPLICANT

  
	
   

  	
   

  
	
   

  	
  FAIRWAYS 340 LLC

  
	
   

  	
  9601
  WILSHIRE BLVD. SUITE 220

  
	
   

  	
  BEVERLY
  HILLS, CA 90210

  

 

RE:
SUBDIVISION NO. 8960, CATEGORY II, PHASE 4

 

THIS AMENDMENT IS TO BE
CONSIDERED AN INTEGRAL PART OF THE ABOVE CREDIT AND MUST BE ATTACHED
THERETO.

 

THE ABOVE MENTIONED
CREDIT IS AMENDED AS FOLLOWS:

 

1.                                       THE AMOUNT OF THIS CREDIT HAS SEEN
INCREASED BY USD 160,404.00 THE AVAILABLE AMOUNT OF THE CREDIT IS NOW USD
1,994,759.00

 

2.                                       THE EXPIRATION
DATE IS AMENDED TO: MAY 31, 2012. ALL OTHER TERMS AND CONDITIONS REMAIN
UNCHANGED.

 

IF
YOU REQUIRE ANY ASSISTANCE OR HAVE ANY QUESTIONS REGARDING THIS AMENDMENT,
PLEASE CALL 213-481-7833.

 

	
  /s/ Illegible

  	
   

  
	
  AUTHORIZED
  SIGNATURE

  	
   

  

 

THIS
DOCUMENT CONSISTS OF
1 PAGE(S).

 

Bolivar Carrillo

 

ORIGINALExhibit 10.106

 

GUARANTY AGREEMENT

 

This Guaranty Agreement
(this “Guaranty”) is made as of August 14,
2007, by Kennedy-Wilson, Inc., a Delaware corporation (singly or
collectively, “Guarantor”), in favor of Bank of America, N.A., a national
banking association, as agent for Lenders as that term is defined below (in
such capacity, “Administrative Agent”) and each of the Lenders.

 

PRELIMINARY STATEMENTS

 

Administrative Agent and
certain other lenders from time to time (each a ‘tender” and collectively, ‘tenders”)
and 300 California Partners LLC, a Delaware limited liability company (“Borrower”),
have entered into, are entering into concurrently herewith, or contemplate
entering into, that certain Loan Agreement of even date herewith (herein
called, as it may hereafter be modified, supplemented, restated, extended, or
renewed and in effect from time to time, the “Loan Agreement”), which Loan
Agreement sets forth the terms and conditions of a loan (the “Loan”) to
Borrower for the construction of the Improvements on, and with respect to, land
located in the City of San Francisco, County of San Francisco, State of
California, as more particularly described in the Loan Agreement and identified
therein as the “Land,”

 

A condition precedent to
Lenders’ obligation to make the Loan to Borrower is Guarantor’s execution and
delivery to Administrative Agent of this Guaranty.

 

The Loan is, or will be,
evidenced by those certain Deed of Trust Notes of even date with the Loan
Agreement, executed by Borrower and payable to the order of Lenders in the
aggregate original face principal amount of Forty-Five Million Dollars
($45,000,000) (such notes, as they may hereafter be renewed, extended,
supplemented, increased or modified and in effect from time to time, and all
other notes given in substitution therefore, or in modification, renewal, or
extension thereof, in whole or in part, are herein called the “Note”).

 

Borrower and Bank of
America, N.A. as Lender or an affiliate thereof (collectively, “Sway Bank”) may
from time to time enter into an interest rate swap agreement, International
Swaps and Derivatives Association, Inc. (ISDA) Master Agreement or other
similar agreement or arrangement to hedge the risk of variable interest rate
volatility or fluctuations of interest rates (any such agreement or arrangement
as it may hereafter be renewed, extended, supplemented, increased or modified
and in effect from time to time is herein called an “Interest Rate Protection
Agreement”).

 

Any capitalized term used
and not defined in this Guaranty shall have the meaning given to such term in
the Loan Agreement. This Guaranty is one of the Loan Documents described in the
Loan Agreement.

 

STATEMENT
OF AGREEMENTS

 

For
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and as a material inducement to Administrative Agent and Lenders
to extend

 

 

credit to Borrower,
Guarantor hereby guarantees to Administrative Agent and Lenders the prompt and
full payment and performance of the indebtedness and obligations described
below in this Guaranty (collectively called the “Guaranteed Obligations”), this
Guaranty being upon the following terms and conditions:

 

1. Guarantees.

 

(a)                               Guaranty of
Payment.

 

(1)                               Guarantor
hereby jointly and severally, unconditionally and irrevocably guarantees to
Administrative Agent and Lenders the punctual payment when due, whether by
lapse of time, by acceleration of maturity, or otherwise, of all principal,
interest (including interest accruing after the commencement of any bankruptcy
or insolvency proceeding by or against Borrower, whether or not allowed in such
proceeding), fees, late charges, prepayment fees, costs, expenses, required
Borrower’s Deposits, advances made before recording of the Deed of Trust (if
any), and other sums of money now or hereafter due and owing, or which Borrower
is obligated to pay, pursuant to (A) the terms of the Not; the Loan
Agreement, the Deed of Trust, the Environmental Agreement, any application,
agreement, note or other document executed and delivered in connection with any
Letter of Credit, any set aside letters, any Interest Rate Protection Agreement
or any other Loan Documents, including any indemnifications contained in the
Loan Documents, now or hereafter existing, and (B) all renewals,
extensions, refinancings, modifications, supplements or amendments of such
indebtedness, or any of the Loan Documents, or any part thereof (the
indebtedness described in clauses (A) and (B) above in this Section 1(a~ffl
is herein collectively called the “Indebtedness”). This Guaranty covers the
Indebtedness, whether presently outstanding or arising subsequent to the date
hereof, including all amounts advanced by Administrative Agent or Lenders in
stages or installments. The guaranty of Guarantor as set forth in this Section 1(a~
is a continuing guaranty of payment and not a guaranty of collection.

 

(ii)                               Notwithstanding
the foregoing, Guarantor’s obligations hereunder for repayment of the principal
owing under the Loan shall in no event exceed the Guaranteed Amount (as defined
below), plus interest accrued and
unpaid on the entire Indebtedness from the date the same is due until paid in
full, together with all costs, expenses and attorneys’ fees incurred by
Administrative Agent or Lenders. Guarantor’s obligations shall not be affected,
impaired, lessened or released by loans, credits or other financial
accommodations now existing or hereafter advanced by Administrative Agent or
Lenders to Borrower in excess of the Guaranteed Amount. In no event shall the
Guaranteed Amount be reduced as a result of (A) Borrower’s payment of the
Guaranteed Obligations, or (B) Administrative Agent’s foreclosure (or any
credit bid in connection with any such foreclosure) or acceptance of a deed in
lieu of foreclosure for the benefit of Lenders with respect to any collateral
securing the Indebtedness. The agreement of Administrative Agent and Lenders to
the foregoing limitation on Guarantor’s liability shall in no way be deemed to
limit or restrict the right of Administrative Agent or Lenders to apply any
sums paid by Guarantor to any portion of the Loan. As used herein, “Guaranteed
Amount” means Eleven Million Two Hundred Fifty Thousand Dollars ($11,250,000).

 

 

(b)                              Guaranty of
Performance. Guarantor also hereby unconditionally and irrevocably guarantees
to Lender the timely performance of all other Obligations under all of the Loan
Documents, including, without limiting the generality of the foregoing:

 

(i)                                 that the
renovation of the Improvements will be completed in accordance with the Plans
and other requirements of the Loan Agreement;

 

(ii)                              that Borrower
will make all deposits required under the terms of the-Loan-Agreement and
the-other Loan Documents as-and when required

 

(iii) that Borrower
will promptly pay in full and discharge all taxes, assessments and other
charges or levies imposed upon or against or with respect to the Property or
the ownership, use, occupancy or enjoyment of any portion thereof, or any
utility service thereto, as the same become due and payable including all real
estate taxes assessed against the Property or any part thereof;

 

(iv) that Borrower will
pay, at or before the times required by the Loan Documents, the premiums on all
policies of insurance required to be maintained under the terms of the Loan
Documents; and

 

(v)                             that Borrower
will duly and punctually perform and observe all other terms, covenants and
conditions of the Not; the Loan Agreement, the Deed of Trust, the Environmental
Agreement, any Interest Rate Protection Agreement and all other Loan Documents.

 

Upon demand by Lender
following the occurrence of a Default, Guarantor will cause all work to the
Improvements to be completed in accordance with the Plans and other
requirements of the Loan Agreement and will pay all bills in connection
therewith. The liability and obligations under this Section 1(b) shall
not be limited or restricted by the existence of, or any terms of, the guaranty
of payment under Section 1(a).

 

2.                                         Absolute,
Irrevocable and Unconditional Guaranty.

 

(a)                               This Guaranty
is an absolute, irrevocable and unconditional guaranty of payment and
performance. This Guaranty shall be effective as a waiver of, and Guarantor
hereby expressly waives, any and all rights to which Guarantor may otherwise
have been entitled under any suretyship laws in effect from time to time,
including any right or privilege, whether existing under statute, at law or in
equity, to require Administrative Agent or Lenders to take prior recourse or
proceedings against any collateral, security or Person (hereinafter defined) whatsoever.

 

(b)                              As used herein,
the term “Event of Default” means the occurrence of one or more of the
following events, individually or collectively:

 

(i)                                 default by
Borrower in payment or performance of the Guaranteed Obligations, or any part
thereof, when such indebtedness or performance becomes due, 

 

 

either
by its terms or as the result of the exercise of any power to accelerate;

 

(ii) the failure of
Guarantor to perform completely and satisfactorily the covenants, terms and
conditions of any of the Guaranteed Obligations;

 

(iii) the death,
dissolution or insolvency of Guarantor, or the appointment of a conservator for
Guarantor, and such Guarantor is not replaced with another Guarantor
satisfactory to Administrative Agent within forty-five (45) days after the occurrence of such
event;

 

(iv) the inability of
Guarantor to pay debts as they mature;

 

(v) an assignment by
Guarantor for the benefit of creditors;

 

(vi) the institution of
any proceeding by or against Guarantor in bankruptcy or for a reorganization or
an arrangement with creditors, or for the appointment of a receiver, trustee or
custodian for any of them or for any of theft respective properties;

 

(vii) the determination
by Administrative Agent in good faith that a material adverse change has occurred
in the financial condition of Guarantor;

 

(viii) the entry of a
judgment against Guarantor in an amount greater than $500,000 and such judgment
remains unstayed or unbonded for a period of thirty (30) days;

 

(ix) the
issuance of a writ or order of attachment, levy or garnishment against
Guarantor;

 

(x) the falsity in any
material respect of, or any material omission in~ any representation made to
Administrative Agent or any Lender by Guarantor; and/or

 

(xi) any transfer of assets
of any Guarantor, without the prior consent of Administrative Agent (except for
transfers of assets for estate planning purposes valued at less than $50,000
per year per Guarantor, customary political and charitable contributions, and
transfers for which Guarantor receives consideration substantially equivalent
to the fair market value of the transferred asset).

 

(c)                               Upon the
occurrence of any Event of Default, the Guaranteed Obligations, for purposes of
this Guaranty, shall be deemed immediately due and payable at the election of
Administrative Agent, and Guarantor shall, on demand and without presentment,
protest, notice of protest, further notice of nonpayment or of dishonor,
default or nonperformance, or notice of acceleration or of intent to
accelerate, or any other notice whatsoever, without any notice having been
given to Guarantor prior to such demand of the acceptance by Administrative
Agent and Lenders of this Guaranty, and without any notice having been given to
Guarantor prior to such demand of the creating or incurring of such
indebtedness, all such notices being hereby waived by Guarantor, pay the amount
due to Administrative Agent and Lenders, and pay all damages

 

 

and all costs and expenses
that may arise in consequence of such Event of Default (including all attorneys’
fees and expenses, investigation costs, court costs, and any and all other
costs and expenses incurred by Administrative Agent or Lenders in connection
with the collection and enforcement of the Note or any other Loan Document),
whether or not suit is fled thereon, or whether at maturity or by acceleration,
or whether before or after maturity, or whether in connection with bankruptcy,
Solvency or appeal. It shall not be necessary for Administrative Agent or
Lenders, in order to enforce such payment by Guarantor, first to institute
judicial or non-judicial foreclosure or pursue or exhaust any rights or
remedies against Borrower or others liable on such indebtedness, or to enforce
any rights against any security that shall ever have been given to secure such
indebtedness, or to join Borrower or any others liable for the payment of the
Guaranteed Obligations or any part thereof in any action or proceeding to
enforce this Guaranty, or to resort to any other means of obtaining payment or
performance of the Guaranteed Obligations; provided,, however, that nothing
herein contained shall prevent Administrative Agent or Lenders from judicially
or non-judicially foreclosing the Deed of Trust or from exercising any other
rights or remedies under the Loan Documents, and if such foreclosure or other
right or remedy is availed of, only the net proceeds there from, after
deduction of all charges and expenses of every kind and nature whatsoever,
shall be applied in reduction of the amount due on the Note and Deed of Trust,
and neither Administrative Agent nor Lenders shall be required to institute or
prosecute proceedings to recover any deficiency as a condition of payment
hereunder or enforcement hereof. At any sale of the Property or other
collateral given for the Indebtedness or any part thereof, whether by
foreclosure or otherwise, Administrative Agent or any Lender may at its
discretion purchase all or any part of the Property or collateral so. sold or
offered for sale for its own account and may, in payment of the amount bid
therefore, deduct such amount from the balance due it pursuant to the terms of
the Note, Deed of Trust and other Loan Documents. Collection action may be
taken or demand may be made against Borrower or against all parties who have
signed this Guaranty or any other guaranty covering all or any part of the
Guaranteed Obligations, or against any one or more of them, separately or
together, without impairing the rights of Administrative Agent or Lenders
against any party hereto.

 

3.
Certain Agreements and Waivers by Guarantor.

 

(a)                               Guarantor
hereby agrees that neither the rights or remedies of Administrative Agent or
Lenders nor Guarantor’s obligations under the terms of this Guaranty shall be
released, diminished, impaired, reduced or affected by any one or more of the
following events, actions, facts, or circumstances, and the liability of
Guarantor under this Guaranty shall~ be absolute and unconditional irrespective
of:

 

(i) any limitation of
liability or recourse in any other Loan Document or arising under any law;

 

(ii) any and all
applicable statutes of limitations, all of which Guarantor hereby waives to the
fullest extent permitted by law as a defense to any action or proceeding that
may be brought by Administrative Agent or Lenders against Guarantor;

 

 

(iii) any claim or
defense that this Guaranty was made without consideration or is not supported
by adequate consideration;

 

(iv) the
taking or accepting of any other security or guaranty for, or

right
of recourse with respect to, any or all of the Guaranteed Obligations;

 

(v) any homestead
exemption or any other exemption under applicable law;

 

(vi) any release, surrender,
abandonment, exchange, alteration, sale or other disposition, subordination,
deterioration, waste, failure to protect or preserve, impairment or loss of, or
any failure to create or perfect any lien or security interest with respect to,
or any other dealings with, any collateral or security at any time existing or
purported, believed or expected to exist in connection with any or all of the
Guaranteed Obligations, including any impairment of Guarantor’s recourse
against any Person or collateral;

 

(vii) whether express or by operation of
law, any partial release of the liability of Guarantor hereunder, or if one or
more other guaranties are now or hereafter obtained by Administrative Agent or
Lenders covering all or any part of the Guaranteed Obligations, any complete or
partial release of any one or more of such guarantors under any such other
guaranty, or any complete or partial release of Borrower or any other party
liable, directly or indirectly, for the payment or performance of any or all of
the Guaranteed Obligations;

 

(viii) the death of Borrower or the appointment of a conservator
for Borrower;

 

(ix) the insolvency, bankruptcy, dissolution, liquidation,
termination, receivership, reorganization, merger, consolidation, change of
form, structure or ownership, sale of all assets, or lack of corporate,
partnership or other power of Borrower or any other party at any time liable
for the payment of any or all of the Guaranteed Obligations;

 

(x) either with or without notice to or
consent of Guarantor: any renewal, extension, modification, supplement,
subordination or rearrangement of the terms of any or all of the Guaranteed Obligations
and/or any of the Loan Documents, including material alterations of the terms
of payment (including changes in maturity date(s) and interest rate(s)) or
any other terms thereof, or any waiver, termination, or release of, or consent
to depart from, any of the Loan Documents or any other guaranty of any or all
of the Guaranteed Obligations, or any adjustment, indulgence, forbearance, or
compromise that may be granted from time to time by Administrative Agent or
Lenders to Borrower, Guarantor, and/or any other Person at any time liable for
the payment or performance of any or all of the Guaranteed Obligations;

 

(xi) any neglect, lack of
diligence, delay, omission, failure, or refusal of 

 

 

Administrative
Agent or Lenders to take or prosecute (or in taking or prosecuting) any action
for the collection or enforcement of any of the Guaranteed Obligations, or to
foreclose or take or prosecute any action to foreclose (or in foreclosing or
taking or prosecuting any action to foreclose) upon any security therefore, or
to exercise (or in exercising) any other right or power with respect to any
security therefore, or to take or prosecute (or in taking or prosecuting) any
action in connection with any Loan Document, or any failure to sell or
otherwise dispose of in a commercially reasonable manner collateral any
collateral securing any or all of the guaranty obligations;      

 

(xii) any failure of
Administrative Agent or Lenders to notify Guarantor of any creation, renewal,
extension, rearrangement, modification, supplement, subordination, or
assignment of the Guaranteed Obligations or any part thereof, or of any Loan
Document, or of any release of or change in any security, or of any other
action taken or refrained from being taken by Administrative Agent or Lenders
against Borrower or any security or other recourse, or of any new agreement
between or among Administrative Agent and/or Lenders and Borrower, it being
understood that neither Administrative Agent nor any Lender shall be required
to give Guarantor any notice of any kind under any circumstances with respect
to or in connection with the Guaranteed Obligations, any and all rights to
notice Guarantor may have otherwise had being hereby waived by Guarantor, and
Guarantor shall be responsible for obtaining for itself information regarding
Borrower, including any changes in the business or financial condition of
Borrower, and Guarantor acknowledges and agrees that Administrative Agent and
Lenders shall have no duty to notify Guarantor of any information which
Administrative Agent or Lenders may have concerning Borrower;

 

(xiii) whether for any
reason Administrative Agent or any Lender is required to refund any payment by
Borrower to any other party liable for the payment or performance of any or all
of the Guaranteed Obligations, or to pay the amount thereof to someone else;

 

(xiv) the making of advances
by Administrative Agent or Lenders to protect their interest in the Property,
to preserve the value of the Property or to facilitate performance of any term
or covenant contained in any of the Loan Documents;

 

(xv) the existence of any
claim, counterclaim, set-off or other right that Guarantor may at any time have
against Borrower, Administrative Agent or any Lender or any other Person,
whether or not arising in connection with this Guaranty, the Note, the Loan
Agreement, or any other Loan Document;

 

(xvi) the unenforceability
of all or any part of the Guaranteed Obligations against Borrower, whether
because the Guaranteed Obligations exceed the amount permitted by law or
violate any usury law, or because the act of creating the Guaranteed
Obligations, or any part thereof is ultra vires, or because the officers
or Persons creating the Guaranteed Obligations acted outside the scope of their
authority, or because of a lack of validity or enforceability of or defect or
deficiency in any of the Loan Documents, or because Borrower has any valid
defense, claim or offset with respect thereto, or because Borrower’s obligation
ceases to exist by operation of law, or because of any other reason 

 

 

or
circumstance, it being agreed that Guarantor shall remain liable on this
Guaranty regardless of whether Borrower or any other Person be found not liable
for the Guaranteed Obligations, or any part thereof, for any reason (and regardless
of any joinder of Borrower or any other party in any action to obtain payment
or performance of any or all of the Guaranteed Obligations);

 

(xvii) any order, ruling or plan of reorganization emanating from
proceedings under Title 11 of the United States Code with respect to Borrower
or any other Person, including any extension, reduction, composition, or other
alteration of the Guaranteed Obligations, whether or not consented to by
Administrative Agent or any Lender; (xviii) any early termination of any of the
Guaranteed Obligations;

 

(xix) Administrative Agent’s enforcement or forbearance from
enforcement of the Guaranteed Obligations on a net or gross basis;

 

(xx) any invalidity, irregularity or
unenforceability in whole or in part (including with respect to any netting
provision) of any Interest Rate Protection Agreement or any confirmation,
instrument or agreement required thereunder or related thereto, or any
transaction entered into thereunder, or any limitation on the liability of
Borrower thereunder or any limitation on the method or terms of payment
thereunder which may now or hereafter be caused or imposed in any manner
whatsoever; or

 

(xxi) any other condition, event, omission,
action or inaction that would in the absence of this Section 3(a) result
in the release or discharge of Guarantor from the performance or observance of
any obligation, covenant or agreement contained in this Guaranty or any other
agreement.

 

(b) In the event any
payment by Borrower or any other Person to Administrative Agent or any Lender
is held to constitute a preference, fraudulent transfer or other voidable
payment under any bankruptcy, insolvency or similar law, or if for any other
reason Administrative Agent or any Lender is required to refund such payment or
pay the amount thereof to any other party, such payment by Borrower or any
other party to Administrative Agent or such Lender shall not constitute a
release of Guarantor from any liability hereunder, and this Guaranty shall
continue to be effective or shall be reinstated (notwithstanding any prior
release, surrender or discharge by Administrative Agent or any Lender of this
Guaranty or of Guarantor), as the case maybe, with respect to, and this
Guaranty shall apply to, any and all amounts so refunded by Administrative
Agent or any Lender or paid by Administrative Agent or any Lender to another
Person (which amounts shall constitute part of the Guaranteed Obligations), and
any interest paid by Administrative Agent or any Lender and any attorneys’
fees, costs and expenses paid or incurred by Administrative Agent or any Lender
in connection with any such event. It is the intent of Guarantor,
Administrative Agent and Lenders that the obligations and liabilities of
Guarantor hereunder are absolute and unconditional under any and all
circumstances and that until the Guaranteed Obligations are fully and finally
paid, and not subject to refund or disgorgement, the obligations and
liabilities of Guarantor hereunder shall not be discharged or released, in
whole or in part, by any act or occurrence that 

 

 

might,
but for the provisions of this Guaranty, be deemed a legal or equitable
discharge or release of a guarantor. Administrative Agent shall be entitled to
continue to hold this Guaranty in its possession for the benefit of Lenders for
a period of one year from the date the Guaranteed Obligations are paid in full
and for so long thereafter as may be necessary to enforce any obligation of
Guarantor hereunder and/or to exercise any right or remedy of Administrative
Agent or Lenders hereunder.

 

(c)  If acceleration of the time for
payment of any amount payable by Borrower under the Note, the Loan Agreement,
or any other Loan Document is stayed or delayed by any law or tribunal, all
such amounts shall nonetheless be payable by Guarantor on demand by
Administrative Agent or Lenders.

 

(d)                                  Guarantor
further waives: (i) any defense to the recovery by Administrative Agent or
Lenders against Guarantor of any deficiency or otherwise to the enforcement of
this Guaranty or any security for this Guaranty based upon the election by
Administrative Agent or Lenders of any remedy against Guarantor or Borrower,
including the defense to enforcement of this Guaranty (the so-called “Gradsky”
defense) which, absent this waiver, Guarantor would have by virtue of an
election by Administrative Agent or Lenders to conduct a non-judicial
foreclosure sale (also known as a “trustee’s sale”) of any real property
security for the Indebtedness, it being understood by Guarantor that any such
non-judicial foreclosure sale will destroy, by operation of California Code of
Civil Procedure (“CCP”) Section 580d, all rights of any party to a
deficiency judgment against Borrower and, as a consequence, will destroy all
rights that Guarantor would otherwise have (including the right of subrogation,
the right of reimbursement, and the right of contribution) to proceed against
Borrower; (ii) any defense or benefits that may be derived from CCP  Sections 580a,
580b, 580d or 726, or comparable provisions of the laws of any other
jurisdiction and all other anti-deficiency and one form of action defenses
under the laws of California and any other jurisdiction; and (iii) any
right to a fair value hearing under CCP Section 580a, or any other similar
law, to determine the size of any deficiency owing (for which Guarantor would
be liable -hereunder) following a non-judicial foreclosure sale.

 

(e)    Without
limiting the foregoing or anything else contained in this Guaranty, Guarantor
waives all rights and defenses that Guarantor may have because the Guaranteed
Obligations are secured by real property. This means, among other things:

 

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

 

(ii)  If Administrative Agent, for the benefit of Lenders,
forecloses on any real property collateral pledged by Borrower: (A) the
amount of the Guaranteed Obligations may be reduced only by the price for which
that collateral is sold at the foreclosure sale, even if the collateral is
worth more than the sale price; and

 

 

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

 

This
is an unconditional and irrevocable waiver of any rights and defenses that
Guarantor may have because the Guaranteed Obligations are secured by real
property. These rights and defenses include, but are not limited to, any rights
or defenses based upon Sections 580a,  580b,
580d, or 726 of the CCP. -

 

(f)                                       remedies by Administrative
Agent or Lenders, even though that election of remedies, such as a non-judicial
foreclosure with respect to security for a guaranteed obligation, has destroyed
Guarantor’s rights of subrogation and reimbursement against Borrower by
operation of Section. 580d of the CCP or otherwise.

 

(g)                        Guarantor
waives Guarantor’s rights of subrogation and reimbursement, including (i) any
defenses Guarantor may have by reason of an election of remedies by
Administrative Agent or Lenders, and (ii) any rights or defenses Guarantor
may have by reason of protection afforded to Borrower with respect to the
Guaranteed Obligations pursuant to the anti-deficiency or other laws of
California limiting or discharging Borrower’s obligations, including Sections 580a, 580b, 580d or 726 of the CCP.

 

(h)                        Guarantor
waives any rights, defenses and benefits that may be derived from Sections 2787
to 2855, inclusive, of the
California Civil Code or comparable provisions of the laws of any other
jurisdiction and further waives all other suretyship defenses Guarantor would
otherwise have under the laws of California or any other jurisdiction.

 

(i)                            No provision or
waiver in this Guaranty shall be construed as limiting the generality of any
other provision or waiver contained in this Guaranty. All of the waivers
contained herein are irrevocable and unconditional and are intentionally and
freely made by Guarantor.

 

4.                                              Subordination.
ii for any reason whatsoever, Borrower is now or hereafter becomes indebted to
Guarantor:

 

(a)                         such
indebtedness and all interest thereon and all liens, security interests and
rights now or hereafter existing with respect to property of Borrower securing
such indebtedness shall, at all times, be subordinate in all respects to the
Guaranteed Obligations and to all liens, security interests and rights now or
hereafter existing to secure the Guaranteed Obligations;

 

(b)                                                   Guarantor shall
not be entitled to enforce or receive payment, directly or indirectly, of any
such indebtedness of Borrower to Guarantor until the Guaranteed Obligations
have been fully and finally paid; provided, however, that notwithstanding the

 

 

foregoing, so long as no Default has occurred
and is continuing, Guarantor is not prohibited from receiving (i) such
reasonable management fees or reasonable salary from Borrower as Administrative
Agent may find acceptable from time to time, and (ii) distributions from
Borrower or the constituent members of Borrower on account of Guarantor’s
equity interest in any of the foregoing;

 

(c)                                         Guarantor
hereby assigns and grants to Administrative Agent, for the ratable benefit of
Lenders, a security interest in all such indebtedness and security therefore,
if any, of Borrower to Guarantor now existing or hereafter arising, including
any dividends and payments pursuant to debtor relief or insolvency proceedings
referred to below. In the event of receivership, bankruptcy, reorganization,
arrangement or other debtor relief or insolvency proceeding &
involving Borrower as debtor, Administrative Agent and Lenders shall have each the
right to prove its claim in any such proceeding so as to establish its rights
hereunder and shall have the right to receive directly from the receiver,
trustee or other custodian (whether or not a Default shall have occurred or be
continuing under any of the Loan Documents), dividends and payments that are
payable upon any obligation of Borrower to Guarantor now existing or hereafter
arising, and to have all benefits of any security therefore, until the
Guaranteed Obligations have been fully and finally paid, If, notwithstanding
the foregoing provisions, Guarantor should receive any payment, claim or
distribution that is prohibited as provided above in this Section 4.
Guarantor shall immediately pay the same to Administrative Agent for the
benefit of Lenders, Guarantor
hereby agreeing that it shall receive the payment, claim or distribution in trust
for Administrative Agent and Lenders and shall have absolutely no dominion over
the same except to pay it immediately to Administrative Agent for the benefit
of Lenders;

 

(d) Guarantor shall promptly upon request of Administrative Agent
from time to time execute such documents and perform such acts as
Administrative Agent may require to evidence and perfect the interest, and to
permit or facilitate exercise of the rights, of Administrative Agent and
Lenders under this Section 4, including execution and delivery of proofs
of claim, further assignments and security agreements, and delivery to
Administrative Agent or Lenders of any promissory notes or other instruments
evidencing indebtedness of Borrower to Guarantor, All promissory notes,
accounts receivable ledgers or other evidences, now or hereafter held by
Guarantor, of obligations of Borrower to Guarantor shall contain a specific
written notice thereon that the indebtedness evidenced thereby is subordinated
under and is subject to the terms of this Guaranty.

 

5.                            Other Liability
of Guarantor or Borrower. If Guarantor is or becomes liable, by
endorsement or otherwise, for any indebtedness owing by Borrower to
Administrative Agent or any Lender other than under this Guaranty, such
liability shall not be in any manner impaired or affected hereby, and the
rights of Administrative Agent or such Lender hereunder shall be cumulative of
any and all other rights that Administrative Agent or such Lender may have
against Guarantor. If Borrower is or becomes indebted to Administrative Agent
or any Lender for any indebtedness other than or in excess of the Indebtedness
for which Guarantor is liable under this Guaranty, any payment received or
recovery realized upon such other indebtedness of Borrower to Administrative
Agent or such Lender may, except to the extent paid by Guarantor on the
Indebtedness or specifically required by law or agreement of Administrative
Agent or such Lender to be applied to the Indebtedness, in the sole discretion
of Administrative 

 

 

Agent or such Lender, be
applied upon indebtedness of Borrower to Administrative Agent or such Lender
other than the Indebtedness. This Guaranty is independent of (and shall not be
limited by) any other guaranty now existing or hereafter given. Further, Guarantor’s
liability under this Guaranty is in addition to any and all other liability
Guarantor may have in any other capacity.

 

6.   Administrative Agent or Lender Assigns;
Disclosure of Information. This Guaranty is for the benefit of
Administrative Agent and Lenders and the successors and assigns of each of
them. Administrative Agent and any Lender may, at any time, sell, transfer or
assign all or a portion of its interest in the Guaranteed Obligations and the
Loan Documents, on and subject to the terms and conditions of the Loan
Agreement. In the event of any such sale, transfer or assignment of the
Guaranteed Obligations or any part thereof, the rights arid benefits’ under
this Guaranty, to the extent applicable to the Guaranteed Obligations so sold,
transferred or assigned, may be transferred with such obligations. Guarantor
waives notice of any sale transfer or assignment of the Guaranteed Obligations
and/or this Guaranty or any part thereof, and agrees that failure to give
notice of any such sale, transfer or assignment will not affect the liability
of Guarantor hereunder. Administrative Agent and each Lender are hereby
authorized to disseminate any information they now have or hereafter obtain
pertaining to the Guaranteed Obligations or this Guaranty, including credit or
other information on Borrower, Guarantor and/or any party liable, directly or
indirectly, for any part of the Guaranteed Obligations, to any actual or
prospective assignee or participant with respect to the Guaranteed Obligations,
to any of the affiliates of Administrative Agent or such Lender, including Bane
of America Securities LLC, to any regulatory body having jurisdiction over
Administrative Agent or such Lender, and to any other parties as necessary or
appropriate in the reasonable judgment of Administrative Agent or such Lender.

 

7. Binding Effect. This Guaranty is binding not only on Guarantor, but
also on Guarantor’s heirs, personal representatives, successors and assigns;
provided, however, that Guarantor may not assign this Guaranty, or assign or
delegate any of its rights or obligations under this Guaranty, without the
prior written consent of each Lender in each instance (and any attempted
assignment or delegation by Guarantor without such consent shall be null and
void). Upon the death of Guarantor, if Guarantor is a natural person, this
Guaranty shall continue against Guarantor’s estate as to all of the Guaranteed
Obligations, including that portion incurred or arising after the death of
Guarantor and shall be provable in full against Guarantor’s estate, whether or
not the Guaranteed Obligations are then due and payable.

 

8. Governing Law~ Forum; Consent to Jurisdiction. The validity,
enforcement, and interpretation of this Guaranty, shall for all purposes be
governed by and construed in accordance with the laws of the State of
California and applicable United States federal law, and is intended to be
performed in accordance with, and only to the extent permitted by, such laws.
All obligations of Guarantor hereunder are payable and performable at the place
or places where the Guaranteed Obligations are payable and performable.
Guarantor hereby irrevocably submits generally and unconditionally for
Guarantor and in respect of Guarantor’s property to the nonexclusive
jurisdiction of any state court, or any United States federal court, sifting in
the state specified in the first sentence of this Section and to the
jurisdiction of any state or United States federal court sitting in the state
in which any of the Land is located, over any suit, action or 

 

 

proceeding arising out of or relating to this Guaranty or the
Guaranteed Obligations. Guarantor hereby irrevocably waives, to the fullest
extent permitted bylaw, any objection that Guarantor may now or hereafter have
to the laying of venue in any such court and any claim that any such court is
an inconvenient forum. Final judgment in any such suit, action or proceeding
brought in any such court shall be conclusive and binding upon Guarantor and
may be enforced in any court in which Guarantor is subject to jurisdiction.
Guarantor hereby agrees and consents that in addition to any methods of service
of process provided for under applicable law, all service of process in any
such suit, action or proceeding in any state court, or any United States
federal court, sitting in the state specified in the first sentence of this Section may
be made by certified -or registered mail, return receipt requested, directed to
Guarantor at the address set forth at the end of this Guaranty, or at a
subsequent address of which Administrative Agent receives actual notice from
Guarantor in accordance with the notice of provisions hereof; and service so
made shall be complete five (5) days
after the same shall have been so mailed. Nothing herein shall affect the right
of Administrative Agent to serve process in any manner permitted by law or
limit the right of Administrative Agent to bring proceedings against Guarantor
in any other court or jurisdiction. The authority and power to appear for and
enter judgment against Guarantor shall not be exhausted by one or more
exercises thereof or by any imperfect exercise thereof and shall -not be
extinguished by any judgment entered pursuant thereto. Such authority may be
exercised on one or more occasions or from time to time in the same or
different jurisdiction as often as Administrative Agent shall deem necessary
and desirable.

 

9.
Invalidity of Certain Provisions. If any provision of this Guaranty or the
application thereof to any Person or circumstance shall, for any reason and to
any extent, be declared to be invalid or unenforceable, neither the remaining
provisions of this Guaranty nor the application of such provision to any other
Person or circumstance shall be affected thereby, and the remaining provisions
of this Guaranty, or the applicability of such provision to other Persons -or
circumstances, as applicable, shall remain in effect and be enforceable to the
maximum extent permitted by applicable law.

 

10.
Attorneys’ Fees and Costs of Collection. If there is a prevailing party in any
lawsuit, reference or arbitration arising out of or relating to this Guaranty
or the Guaranteed Obligations, such prevailing party shall be entitled to
recover from each other party such sums as the court, referee or arbitrator may
adjudge to be reasonable attorneys’ fees in the action, reference or
arbitration, in addition to costs and expenses otherwise allowed by law. In all
other situations, Guarantor shall pay on demand all attorneys’ fees and all
other costs and expenses incurred by Administrative Agent or Lenders in the
enforcement of or preservation of Administrative Agent or Lenders’ rights under
this Guaranty including all attorneys’ fees and expenses, investigation costs,
and all court costs, whether or not suit is filed hereon, or whether at
maturity or by acceleration, or whether before or after maturity, or whether in
connection with bankruptcy, insolvency or appeal, or whether in connection with
the collection and enforcement of this Guaranty against any other Guarantor, if
there be more than one. Guarantor agrees to pay interest on any expenses or
other sums due to Administrative Agent or Lenders under this Section 10
that are not paid when due, at a rate per annum equal to the interest rate
provided for in the Note. Guarantor’s obligations and liabilities under this Section 10
shall survive any payment or discharge in full of the Guaranteed Obligations.

 

 

11.                             Payments. All sums
payable under this Guaranty shall be paid in lawful money of the United States
of America that at the time of payment is legal tender for the payment of
public and private debts.

 

12.                            Controlling Agreement. It is not the
intention of Administrative Agent or Lenders or Guarantor to obligate Guarantor
to pay interest in excess of that lawfully permitted to be paid by Guarantor
under applicable law. Should it be determined that any portion of the
Guaranteed Obligations or any other amount payable by Guarantor under this
Guaranty constitutes interest in excess of the maximum amount of interest that
Guarantor, in Guarantor’s capacity as guarantor, may lawfully be required to
pay under applicable law, the obligation of Guarantor to pay such interest
shall automatically be limited to the payment thereof in the maximum amount so —permitted under
applicable law. The provisions of this Section 12 -shall override and
control all other provisions of this Guaranty and of any other agreement
between Guarantor Administrative Agent or Lenders.

 

13.                                Representations. Warranties
and Covenants of Guarantor. Guarantor hereby
represents, warrants, and covenants that: (a) Guarantor has a financial
interest in Borrower and will derive a material and substantial benefit,
directly or indirectly, from the making of the Loan to Borrower and from the
making of this Guaranty by Guarantor; (b) this Guaranty is duly authorized
and valid, and is binding upon and enforceable against Guarantor; (c) Guarantor
is not, and the execution, delivery and performance by Guarantor of this
Guaranty will not cause Guarantor to be, in violation of or in default with
respect to any law or in default (or at risk of acceleration of indebtedness)
under any agreement or restriction by which Guarantor is bound or affected; (d) Guarantor
is duly organized, validly existing, and in good standing under the laws of the
state of its organization and under California laws, is lawfully doing business
in California, and has fill power and authority to enter into and perform this
Guaranty; (e) Guarantor will indemnify Administrative Agent and Lenders
from any loss, cost or expense as a result of any representation or warranty of
Guarantor being false, incorrect, incomplete or misleading in any material
respect; (f) there is no litigation pending or, to the knowledge of
Guarantor, threatened before or by any tribunal against or affecting Guarantor;
(g) all financial statements and information heretofore furnished to
Administrative Agent or Lenders by Guarantor do, and all financial statements
and information hereafter furnished to Administrative Agent or Lenders by Guarantor
will, fully and accurately present the condition (financial or otherwise) of
Guarantor as of their dates and the results of Guarantor’s operations for the
periods therein specified, and, since the date of the most recent financial
statements of Guarantor heretofore furnished to Administrative Agent or
Lenders, no material adverse change has occurred in the financial condition of
Guarantor, nor, except as heretofore disclosed in writing to Administrative
Agent, has Guarantor incurred any material liability, direct or indirect, fixed
or contingent; (h) after giving effect to this Guaranty, Guarantor is
solvent, is not engaged or about to engage in business or a transaction for
which the property of Guarantor is an unreasonably small capital, and does not
intend to incur or believe that it will incur debts that will be beyond its
ability to pay as such debts mature; (i) neither Administrative Agent nor
Lenders have any duty at any time to investigate or inform Guarantor of the
financial or business condition or affairs of Borrower or any change therein,
and Guarantor will keep fully apprised of Borrower’s financial and business
condition; (j) Guarantor acknowledges and agrees that Guarantor may be
required to pay and perform the Guaranteed Obligations in full without 

 

 

assistance or support from Borrower or any
other Person; and (k) Guarantor has read and fully understands the
provisions contained in the Note, the Loan Agreement, the Deed of Trust, and
the other Loan Documents. Guarantor’s representations, warranties and covenants
are a material inducement to Administrative Agent and Lenders to enter into the
other Loan Documents and shall survive the execution hereof and any bankruptcy,
foreclosure, transfer of security or other event affecting Borrower, Guarantor,
any other party, or any security for all or any part of the Guaranteed
Obligations. 

 

Until
the Guaranteed Obligations are paid and performed in fill and each and every
term, covenant and condition of this Guaranty is fully performed, Guarantor
hereby further agrees:

 

(aa)
To maintain Net Worth equal to at least Thirty Mjllion Dollars ($30,000,000);
and

 

(bb) To maintain
unencumbered Liquid Assets equal to at least Bight Million Dollars ($8,000,000).

 

As
used herein, (A) “Net Worth” means the net worth of Guarantor determined
in accordance with generally accepted accounting principles; and (B) “Liquid
Assets” means the following assets of Guarantor: (i) cash; (ii) certificates
of deposit or time deposits with terms of six (6) months or less; (iii) A-1IP-l
commercial paper with a term of three (3) months or less; (iv) U.S.
treasury bills and other obligations of the federal government, all with terms
of six (6) months or less; (v) Readily marketable securities
(excluding “margin stock” (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System), restricted stock and stock subject to
the provisions of Rule 144 of the Securities and Exchange Commission); (vi) Bankers’
acceptances issued for terms of six (6) months or less by financial
institutions approved by Lender; and (vii) repurchase agreements with
terms of six (6) months or less covering U.S. government securities.

 

In
addition to the foregoing, Guarantor further represents, warrants and covenants
that (1) Guarantor has received and examined copies of each Interest Rate
Protection Agreement, the observance and performance of which by Borrower is
hereby guaranteed; (m) Guarantor will benefit from Swap Bank entering into
each Interest Rate Protection Agreement and any transaction there under with
Borrower, and Guarantor has determined that the execution and delivery by
Guarantor of this Guaranty is necessary and convenient to the conduct,
promotion and attainment of the business of Guarantor; and (n) neither
Administrative Agent nor Swap Bank nor Lenders have any duty to determine
whether any Interest Rate Protection Agreement, or any other transaction
relating to or arising under any Interest Rate Protection Agreement, will be or
has been entered into by Borrower for purposes of hedging interest rate,
currency exchange rate, or other risks arising in its businesses or affairs and
not for purposes of speculation or is otherwise inappropriate for Borrower.

 

14.    Notices. All notices, requests,
consents, demands and other communications required or which any party desires to  give hereunder or under any
other Loan Document shall be in writing and, unless otherwise specifically
provided in such other Loan Document, shall be deemed sufficiently given or
furnished if delivered by personal delivery, by nationally recognized overnight
courier service, or by registered or certified United States mail, postage 

 

 

prepaid, addressed to the
party to whom directed at the addresses specified in this Guaranty (unless
changed by similar notice in writing given by the particular party whose
address is to be changed) or by telegram, telex, or facsimile. Any such notice
or communication shall be deemed to have been given either at the time of
personal delivery or, in the case of courier or mail, as of the date of first
attempted delivery at the address and in the manner provided herein, or, in the
case of telegram, telex or facsimile, upon receipt; provided that, service of a
notice required by any applicable statute shall be considered complete when the
requirements of that statute are met. Notwithstanding the foregoing, no notice
of change of address shall be effective except upon actual receipt. This Section shall
not be construed in any way to affect or impair any waiver of notice or demand
provided in this Guaranty or in any Loan Document or to require giving of
notice or demand to or upon any Person in any situation or for any reason.

 

15.   Cumulative Rights. The exercise by
Administrative Agent or Lenders of any right or remedy hereunder or under any
other Loan Document, or at law or in equity, shall not preclude the concurrent
or subsequent exercise of any other right or remedy. Administrative Agent and
Lenders shall have all rights, remedies and recourses afforded to Administrative
Agent and Lenders by reason of this Guaranty or any other Loan Document or by
law or equity or otherwise, and the same (a) shall be cumulative and
concurrent, (b) may be pursued separately, successively or concurrently
against Guarantor or others obligated for the Guaranteed Obligations, or any
part thereof, or against any one or more of them, or against any security or
otherwise, at the sole and absolute discretion of Administrative Agent or
Lenders, (c) may be exercised as often as occasion therefore shall arise,
it being agreed by Guarantor that the exercise of, discontinuance of the
exercise of or failure to exercise any of such rights, remedies, or recourses
shall in no event be construed as a waiver or release thereof or of any other
right, remedy, or recourse, and (d) are intended to be, and shall be,
nonexclusive. No waiver of any default on the part of Guarantor or of any
breach of any of the provisions of this Guaranty or of any other document shall
be considered a waiver of any other or subsequent default or breach, and no
delay or omission in exercising or enforcing the rights and powers granted
herein or any other document shall be construed as a waiver of such rights and
powers, and no exercise or enforcement of any rights or powers hereunder or
under any other document shall be held to exhaust such rights and powers, and
every such right and power may be exercised from time to time. The granting of
any consent, approval or waiver by Administrative Agent or Lenders shall be
limited to the specific instance and purpose therefore and shall not constitute
consent or approval in any other instance or for any other purpose. No notice
to or demand on Guarantor in any case shall of itself entitle Guarantor to any
other or further notice or demand in similar or other circumstances. No
provision of this Guaranty or any right, remedy or recourse of Administrative
Agent or Lenders with respect hereto, or any default or breach, can be waived,
nor can this Guaranty or Guarantor be released or discharged in any way or to
any extent, except specifically in each case by a writing intended for that
purpose (and which refers specifically to this Guaranty) executed, and
delivered to Guarantor, by Administrative Agent.

 

16.
Term of Guaranty. This Guaranty shall continue in effect until all the
Guaranteed Obligations are fully and finally paid, performed and discharged,
except that, and notwithstanding any return of this Guaranty to Guarantor, this
Guaranty shall continue in effect (a) with respect to any of the Guaranteed
Obligations that survive the full and final payment of the indebtedness
evidenced by the Note, (b) with respect to all obligations and liabilities
of 

 

 

Guarantor
under Section 10. and (c) as provided in Section 3(b).

 

17.                                 Financial Statements.

 

(a)                                  As
used in this Section, “Financial Statements” means (i) for
each Reporting Party other than an individual, a balance sheet, income
statement, statements of cash flow and amounts and sources of contingent
liabilities, a reconciliation of changes in equity and liquidity verification,
and unless Administrative Agent otherwise consents, consolidated and
consolidating statements if the Reporting Party is a holding company or a
parent of a subsidiary entity; and (ii) for each Reporting Party who is an
individual, a balance sheet, statements of amounts and sources of contingent
liabilities sources and uses of cash and liquidity verification, and unless
Administrative Agent otherwise consents, Financial Statements for each entity
owned or jointly owned by the Reporting Party. Each party for whom Financial
Statements are required is a “Reporting Party” and a specified period to which
the required Financial Statements relate is a “Reporting Period.”

 

(b)                                 Guarantor shall provide or
cause to be provided to Administrative Agent the following:

 

(i)                                     Financial Statements of
Guarantor as soon, as reasonably practicable and in any event within ninety
(90) calendar days after the close of each fiscal year.

 

(ii)                                  Copies of filed federal and
state income tax returns of Guarantor for each taxable year (with all K-is and
other forms and supporting schedules attached) within thirty (30) days after
filing but in any event not later than one hundred twenty (120) days after the
close of each such taxable year.

 

(iii)                               From time to time promptly after
Administrative Agent’s request, such additional information, reports and
statements regarding the business operations and financial condition of each
Reporting Party as Administrative Agent may reasonably request.

 

(iv)                              Within thirty (30) days after the end of
each fiscal quarter, a compliance certificate in the form of Exhibit A
demonstrating compliance for the preceding fiscal quarter with the financial
covenants set forth in Sections l3(aa) and (bb)

 

(c)    
All Financial Statements shall be in form and detail satisfactory to
Administrative Agent and shall contain or be attached to the signed and-dated
written certification of the Reporting Party in form specified by
Administrative Agent to certify that the Financial Statements are furnished to
Administrative Agent in connection with the extension of credit by Lenders and
constitute a true and correct statement of the Reporting Party’s financial
position. All certifications and signatures on behalf of corporations,
partnerships or other entities shall be by a representative of the Reporting
Party satisfactory to Administrative Agent. All 

 

 

Financial Statements for a Reporting Party who is an individual shall
be on Administrative Agent’s then-current personal financial statement form or
in another form satisfacfory to Administrative Agent. All fiscal year-end
Financial Statements shall be audited and certified, as required by
Administrative Agent, without any qualification or exception not acceptable to
Administrative Agent, by independent certified public accountants acceptable to
Administrative Agent, and shall contain all reports and disclosures required by
generally accepted accounting principles for a fair presentation. All assets
shown on the Financial Statements provided by Guarantor, unless clearly
designated to the contrary, shall be conclusively deemed to be free and clear
of any exemption or any claim of exemption of Guarantor at the date of the
Financial Statements and at all times thereafter. Acceptance of any Financial
Statement by Administrative Agent, whether or not in the form prescribed
herein, shall be relied upon by administrative Agent and Lenders in the
administration, enforcement, and extension of the Guaranteed Obligations.

 

18.                                 Subrogation.
Notwithstanding anything to the contrary contained herein, Guarantor shall not
have any right of subrogation in or under any of the Loan Documents or to
participate in any way therein, or in any right, title or interest in and to
any security or right of recourse for the Indebtedness or any right to
reimbursement, exoneration, contribution, indemnification or any similar
rights, until the Indebtedness has been fully and finally paid. This waiver is
given to induce Lenders to make the Loan to Borrower.

 

19.                    Further
Assurances. Guarantor at Guarantor’s expense will promptly
execute and deliver to Administrative Agent upon request by Administrative
Agent all such other and further documents, agreements, and instruments in
compliance with or accomplishment of the agreements of Guarantor under this
Guaranty.

 

20.                    No Fiduciary
Relationship. The relationship between Administrative Agent or
Lenders and Guarantor is solely that of lender and guarantor. Neither
Administrative Agent nor any Lender has any fiduciary or other special
relationship with or duty to Guarantor and none is created hereby or may be
inferred from any course of dealing or act or omission of Administrative Agent
or Lenders.

 

21.                    Interpretation: Counterparts
Time of Essence. If this Guaranty is signed by more than one Person, then all
of the obligations of Guarantor arising hereunder shall be jointly and
severally binding on each of the undersigned and their respective heirs,
personal representatives, successors and assigns, and the term “Guarantor”
shall mean all of such Persons and each of them individually. All promises,
agreements, covenants, waivers, consents, representations, warranties and other
provisions in this Guaranty are made by and shall be binding upon each and
every such Guarantor, jointly and severally, and Administrative Agent and
Lenders may pursue any Guarantor hereunder without being required (a) to
pursue any other Guarantor hereunder or (b) to pursue rights and remedies
under the Deed of Trust and/or applicable law with respect to the Property or
any other Loan Documents. The terms “Administrative Agent” and “Lenders” shall
be deemed to include any subsequent holder(s) of the Note. Whenever the
context of any provisions hereof shall require it, words in the singular shall
include the plural, words in the plural shall include the singular, and
pronouns of any gender shall include the other gender. Captions and headings in
the Loan Documents are for convenience only and shall not affect the
construction of the Loan Documents. All references in 

 

 

this Guaranty to Schedules, Articles, Sections, Subsections, paragraphs
and subparagraphs refer to the respective subdivisions of this Guaranty, unless
such reference specifically identifies another document. The terms “herein.” “hereof,”
“hereto,” “hereunder” and similar terms refer to this Guaranty and not to any
particular Section or subsection of this Guaranty. The terms “include” and
“including” shall be interpreted as if followed by the words “without
limitation.” All references in this Guaranty to sums denominated in dollars or
with the symbol “$”  refer to the lawful
currency of the United States of America, unless such reference specifically
identifies another currency. For purposes of this Guaranty, ‘Person” or “Persons”
shall include firms, associations, partnerships (including limited
partnerships), joint ventures, trusts, corporations, limited liability
companies, and other legal entities, including governmental bodies, agencies,
or instrumentalities, as well as natural persons; This- Guaranty may be execute
in multiple counterparts; each of which, for all purposes, shall be deemed an
original, and all of which when taken together shall constitute but one and the
same agreement. Time shall be of the essence in this Guaranty with respect to
all of Guarantor’s obligations hereunder.

 

22.                        Credit
Verification. Bach legal entity and individual obligated on this
Guaranty, whether as a Guarantor, general partner of a Guarantor or in any
other capacity, hereby authorizes Administrative Agent and Lenders to check any
credit references, verify his/her employment and obtain credit reports from
credit reporting agencies of Administrative Agent’s or Lenders’ choice in
connection with any monitoring, collection or fixture transaction concerning
the Guaranteed Obligations, including any modification, extension or renewal of
the Guaranteed Obligations. Also in connection with any such monitoring,
collection or fixture transaction, Administrative Agent and Lenders are hereby
authorized to check credit references, verify employment and obtain a third
party credit report for the spouse of any married person obligated on this
Guaranty, if such person lives in a community property state.

 

23.                                    Security. To secure
payment and performance of Guarantor’s obligations hereunder, Guarantor assigns
and grants to Administrative Agent for the benefit of Lenders a security
interest in all moneys, securities and other property of Guarantor in the
possession of Administrative Agent, whether held in a general or special
account or deposit or for safekeeping or otherwise, and all proceeds thereof.
Upon the occurrence of any Event of Default, Administrative Agent may apply any
deposit account to reduce the amount outstanding on the Loan, and may foreclose
any collateral as provided in the Uniform Commercial Code and in any security
agreements between Administrative Agent and Lenders and Guarantor.

 

24.                                    Entire
Agreement. This Guaranty embodies the entire agreement between Administrative
Agent and Lenders and Guarantor with respect to the guaranty by Guarantor of
the Guaranteed Obligations. This Guaranty supersedes all prior agreements and
understandings, if any, with respect to the guaranty by Guarantor of the
Guaranteed Obligations. No condition or conditions precedent to the
effectiveness of this Guaranty exist. This Guaranty shall be effective upon
execution by Guarantor and delivery to Administrative Agent. This Guaranty may
not be modified, amended or superseded except in a writing signed by
Administrative Agent and Guarantor referencing this Guaranty by its date and
specifically identifying the portions hereof -that are to be modified,
amended or superseded.

 

 

25.                               Dispute
Resolution Provision. This Section, including the subsections below, is
referred to as the “Dispute Resolution Provision.” This Dispute Resolution
Provision is a material inducement for the parties entering into the Loan and
this Guaranty.

 

(a)                             This Dispute
Resolution Provision concerns the resolution of any controversies or claims
between or among the parties, whether arising in contract, tort or by statute,
including controversies or claims that arise out of or relate to: (i) this
Guaranty (including any renewals, extensions or modifications); or (ii) any
Loan Document, the Environmental Agreement or any other document related to-this
Guaranty (collectively, a “Claim”); For the purposes of this Dispute Resolution
Provision only, the term “parties” shall include any parent corporation,
subsidiary or affiliate of Administrative Agent involved in the servicing,
management or administration of any obligation described or evidenced by this
Guaranty.

 

(b)                            Except to the
extent expressly provided below, any Claim shall, upon the mutual agreement of
the parties, acting in their sole and absolute discretion, be resolved by
binding arbitration in accordance with the Federal Arbitration Act (Title 9,
U.S. Code) (the ‘Federal Arbitration Act”). The Federal Arbitration Act will
apply even though this Guaranty provides that it is governed by California law.

 

(c)                             Arbitration
proceedings will be determined in accordance with the Federal Arbitration Act,
the then-current rules and procedures for the arbitration of financial
services disputes of the American Arbitration Association, or any successor
thereof (“AAA”) and the terms of this Dispute Resolution Provision. In the
event of any inconsistency, the terms of this Dispute Resolution Provision
shall control. If A.AA is unwilling or unable to (i) serve as the provider
of arbitration or (ii) enforce any provision of this arbitration clause,
Administrative Agent may designate another arbitration organization with
similar procedures to serve as the provider of arbitration.

 

(d)                            The arbitration
shall be administered by AAA and conducted, unless otherwise required bylaw, in
any U.S. state where real or tangible personal property for the Loan or this
Guaranty is located or if there is no such collateral, in the state specified
in the governing law section of this Guaranty. All Claims shall be determined
by one arbitrator; however, if Claims exceed Five Million Dollars ($5,000,000),
upon the request of any party, the Claims shall be decided by three
arbitrators. All arbitration hearings shall commence within ninety (90) days of
the demand for arbitration and close within ninety (90) days of commencement
and the award of the arbitrator(s) shall be issued within thirty (30) days
of the close of the hearing. However, the arbitrator(s), upon a showing of good
cause, may extend the commencement of the hearing for up to an additional sixty
(60) days. The arbitrator(s) shall provide a concise written statement of
reasons for the award. The arbitration award may be submitted to any court
having jurisdiction to be confirmed and have judgment entered and enforced.

 

(e)                             The arbitrator(s) will
give effect to statutes of limitation in

 

 

determining any Claim and may dismiss the arbitration on the basis that
the Claim is barred. For purposes of -the application of any
statutes of limitation, the service on AAA under applicable AAA rules of a
notice of Claim is the equivalent of the filing of a lawsuit. Any dispute
concerning this arbitration provision or whether a Claim is arbitrable shall be
determined by the arbitrator(s),  except
as set forth at clause (fl of this Dispute Resolution Provision. The arbitrator(s) shall
have the power to award legal fees pursuant to the terms of this Guaranty.

 

(f)   
The procedure described above will not apply if the Claim, at the time
of the proposed submission to arbitration, arises from or relates to an
obligation to Administrative Agent and/or Lenders secured by real property. In
this case, all of the parties to this Guaranty, in their sole and absolute
discretion, must consent to submission of the Claim to arbitration.

 

(g)  
To the-extent any Claims-are-not arbitrated,-to the extent-permitted by
law the Claims shall be resolved in court by a judge without a jury, except any
Claims which are brought in California state court shall be determined by
judicial reference as described below.

 

(h)       Any claim which is not arbitrated and which is brought in California
state court will be resolved by a general reference to a referee (or a panel of
referees) as provided in California Code of Civil Procedure (“CCP”) Section 638.
The referee (or presiding referee of the panel) shall be a retired Judge or
Justice. The referee (or panel of referees) shall be selected by mutual written
agreement of the parties. If the parties do not agree, the referee shall be
selected by the Presiding Judge of the Court (or his or her representative) as
provided in CCP Section 638 and the following related sections. The
referee shall determine all issues in accordance with existing California law
and the California rules of evidence and civil procedure. The referee
shall be empowered to enter equitable as well as legal relief, provide all
temporary or provisional remedies, enter equitable orders that will be binding
on the parties and rule on any motion which would be authorized in a
trial, including motions for summary judgment or summary adjudication. The
award that results from the decision of the referee(s) will be entered as
a judgment in the court that appointed the referee, in accordance with the
provisions of CCP Sections 44(a) and 645. The parties reserve the right to
seek appellate review of any judgment or order, including orders pertaining to
class certification, to the same extent permitted in a court of law.

 

(i)            This Dispute
Resolution Provision does not limit the right of any party to: (i) exercise
self-help remedies, such as but not limited to, setoff; (ii) initiate
judicial or non-judicial foreclosure against any real or personal property
collateral; (iii) exercise any judicial or power of sale rights; or (iv) act
in a court of law to obtain an interim remedy, such as but not limited to,
injunctive relief, writ of possession or appointment of a receiver, or
additional or supplementary remedies. The filing of a court action is not
intended to constitute a waiver of the right of any party, including the suing
party, thereafter to request or require submittal of the Claim to arbitration
or judicial reference as provided herein.

 

 

(j)            Any
arbitration, judicial reference or trial by a judge of any Claim will take
place on an individual basis without resort to any form of class or
representative action (the “Class Action Waiver”). Regardless of
anything else in this Dispute Resolution Provision, the validity and effect of
the Class Action Waiver may be determined only by a court or referee and
not by an arbitrator. The parties to this Guaranty acknowledge that the Class Action
Waiver is material and essential to the arbitration of any disputes between the
parties and is non severable from the agreement to arbitrate Claims. If the Class Action
Waiver is limited, voided or found unenforceable, then the parties’ agreement
to arbitrate shall be null and void with respect to such proceeding, subject to
the right to appeal the limitation or invalidation of the Class Action  be arbitrated,
a class action Waiver. The parties acknowledge
and agree that under no circumstances Will a class action be arbitrated.

 

(k)  By agreeing to
binding arbitration or judicial reference, the parties irrevocably and
voluntarily waive any right they may have to a trial by jury as permitted by
law in respect to any Claim. Furthermore, without intending in any way to limit
this Dispute-. -Resolution Provision, to the
extent any Claim is not arbitrated or submitted to judicial reference, the
parties-irrevocably and voluntarily waive any right they may have to a trial by
jury to the extent permitted by law in respect of such Claim This waiver of
jury trial shall remain in effect even if  the Class Action
Waiver is limited, voided or found unenforceable WHETHER THE CLAIM IS DECIDED
BY ARBITRATION, BY JUDICIAL REFERENCE, OR BY TRIAL BY A JUDGE, THE PARTIES
AGREE AND UNDERSTAND THAT THE EFFECT OF THIS AGREEMENT IS THAT THEY ARE CIVING
UP THE RIGHT TO TRIAL BY JURY TO THE EXTENT PERMITTED BY LAW

 

THE LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.  THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES

 

 

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

 

	
  Address
  of Guarantor

  	
  GUARANTOR

  
	
  9601
  Wilshire Boulevard, Suite 220

  	
  Kennedy-Wilson, Inc.

  
	
  Beverly
  Hills, CA 90210

  	
  a
  Delaware limited liability company

  
	
  Facsimile:
  31-0-887-6230

  	
  by:

  	
  /s/
  Mary L. Ricks

  
	
  Attn:
  Mary Ricks

  	
   

  	
  Vice
  President

  
	
   

  	
   

  
	
  Address
  of Administrative Agent

  	
   

  
	
  Bank
  of America, N A

  	
   

  
	
  333
  South Hope Street, 11th Floor

  	
   

  
	
  Los
  Angeles, CA 90071

  	
   

  
	
  Facsimile 213-621-4831

  	
   

  

 

 

EXHIBIT A

 

Form of Compliance Certificate

 

Covenant Compliance Certificate

 

This
will certify among other things, that during the period from                                 to                           (the “Reporting
Period”), Kennedy-Wilson, Inc, a Delaware corporation (“Guarantor”) is in
compliance with the terms of that certain Guaranty Agreement dated August _, 2007 (the “Guaranty
Agreement”) made by Guarantor for the benefit of Bank of America, N.A. (“Agent”)
and the other Lenders (as defined in the Loan Agreement), in connection with a
Loan Agreement of even date with the Guaranty Agreement among 300 California
Partners LLC, a Delaware limited liability company, Agent and Lenders (the “Loan
Agreement”). The Guaranty Agreement requires the maintenance by Guarantors of
not less than $30,000,000 Net Worth and not less than $8,000,000 unencumbered
Liquid Assets as set forth in Section 13 of the Guaranty Agreement.
Initially capitalized terms used but not otherwise defined in this Compliance
Certificate shall have the meanings given to them in the Guaranty Agreement.

 

1.            Attached hereto are copies of financial statements
necessary to evidence Guarantor’s compliance during the Reporting Period with
the requirements of the Net Worth covenant set forth in Section 13 (aa) of
the Guaranty Agreement.

 

2.            Attached are copies of all bank statements, brokerage
statements and other documentation necessary to evidence Guarantor’s compliance
during the Reporting Period with the requirements of the unencumbered Liquid
Assets covenant set forth in Section 13 (bb)of the Guaranty
Agreement.

 

3.            Guarantor further certifies to its compliance during the
Reporting Period with all other covenants under the Loan Documents that are
applicable to Guarantor.

 

Guarantor:

 

KENNEDY-WILSON, INC., a
Delaware corporation

 

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

A-1

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