Document:

Exhibit
10.117

 

REPAYMENT
GUARANTY

 

THIS REPAYMENT GUARANTY (this “Guaranty”) is made as of September 4, 2007, by KWI
PROPERTY FUND I, L.P., a Delaware limited partnership, and KW PROPERTY FUND II,
L.P., a Delaware limited partnership (individually and collectively, “Guarantor”) in favor of
WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as agent
for the “Lenders” pursuant to the Loan Agreement described below (in such
capacity, “Administrative Agent”)
and in favor of each party that now or hereafter is bound under the Loan
Agreement as a “Lender” (referred to herein individually as a “Lender”
and collectively as the “Lenders”).

 

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

 

2.                                       In order to induce Administrative Agent
and Lenders to enter into the Loan Agreement and to induce Lenders to loan to
Borrower (whether acting on behalf of itself or any estate created by the
commencement of a case under Title 11 United States Code or any successor
statute thereto (the “Bankruptcy
Code”) or any other insolvency, bankruptcy, reorganization or
liquidation proceeding, or by any trustee under the Bankruptcy Code,
liquidator, sequestrator or receiver of Borrower or Borrower’s property or
similar Person duly appointed pursuant to any law generally governing any
insolvency, bankruptcy, reorganization, liquidation, receivership or like
proceeding) the sum of $98,405,440.00 (the “Loan”), evidenced by one or more secured promissory notes
(collectively, the “Notes”), in the aggregate principal amount of
$98,405,440.00, each now or hereafter executed by Borrower and payable to the
order of one or more Lenders, Guarantor hereby unconditionally and irrevocably
guarantees to Administrative Agent and Lenders and to their successors,
endorsees and/or assigns, the full and prompt payment of (a) the principal
sum of the Notes in accordance with their terms when due, by acceleration or
otherwise, together with all interest accrued thereon, when due under the terms
of the Notes, and any and all other sums of money that become owing by Borrower
to Lenders under the Notes, Loan Agreement or any other “Loan Document” as such
term is defined in the Loan Agreement (which Notes, Loan Agreement and other “Loan
Documents” are also collectively referred to herein as the “Loan Documents”) and (b) any
and all sums owing under any “Swap Contract” as such term is defined in the
Loan Agreement (“Swap Contract”).  The obligations guaranteed pursuant to
this Section 2 are hereinafter referred to as the “Guaranteed Obligations.”

 

Notwithstanding the
foregoing, Guarantor’s obligations hereunder shall in no event exceed an amount
equal to Thirty-Five Million One Hundred Forty-Four Thousand Eight Hundred and
No/100 Dollars ($35,144,800.00) (the “Guaranteed
Principal Amount”), plus 100% of (a) attorneys’ fees and
collection costs and all other sums other than principal owing on the Loan, (b) all
amounts owing under the Swap Contracts and (c) any deficiency, loss or
damage suffered by Lender because of: (1) Borrower’s commission of a
criminal act, (2) the failure to comply with provisions of the Loan
Documents prohibiting the sale, transfer or encumbrance of 

 

 

the Project; (3) the
misapplication by Borrower of any funds derived from the Project, including
security deposits, insurance proceeds, condemnation awards, rental income or
other income arising with respect to the Project; (4) Borrower’s
commission of waste; (5) Borrower’s removal of collateral from the Project
without replacement, (6) Borrower’s violation of law; (7) losses,
expense or liability relating to the presence of hazardous or toxic materials
on the Project; (8) the fraud or intentional misrepresentation by Borrower
made in or in connection with the Loan Documents or the Loan; (9) Borrower’s
voluntary or involuntary filing, or the filing against Borrower by any party,
of any proceeding for relief under any federal or state bankruptcy, insolvency
or receivership laws or any assignment for the benefit of creditors made by
Borrower not dismissed within 180 days; (10) Borrower’s interference with
Lender’s enforcement proceedings; or (11) Borrower’s collection of rent more
than one month in advance.  Guarantor’s
obligations shall not be affected, impaired, lessened or released by loans,
credits or other financial accommodations now existing or hereafter advanced by
Lender to Borrower in excess of the Guaranteed Principal Amount.  In no event shall the Guaranteed Principal
Amount be reduced as a result of (a) Lender’s foreclosure or acceptance of
a deed in lieu of foreclosure with respect to any collateral securing the Loan,
or (b) Guarantor’s payment of the Loan or any portion thereof prior to the
date when the entire Loan becomes due and payable in full, whether at maturity
or by acceleration or otherwise.  The
agreement of Lender to the foregoing limitation on Guarantor’s liability shall
in no way be deemed to limit or restrict the right of Lender to apply any sums
paid by Guarantor to any portion of the Loan.

 

The indebtedness
guaranteed by Guarantor hereunder shall be deemed to be the last indebtedness
which remains outstanding under the Loan Documents and the Swap Contracts after
the application of payments received from Borrower and the application of
proceeds received from the foreclosure of the Deed of Trust and other
liquidation of any collateral for the Loan (subject to the above limitations on
the maximum amount of principal indebtedness guaranteed hereby), and Guarantor
may not claim or contend so long as any such indebtedness remains outstanding
that any payments received by Lender from Borrower or otherwise, or proceeds
received by Lender on the liquidation of the Project, shall have reduced or
discharged Guarantor’s liability or obligations hereunder.  Nothing contained in this paragraph shall be
deemed to (i) limit or otherwise impair any of the waivers or agreements
of Guarantor contained in this Guaranty or (ii) require Lender to proceed
against Borrower, any collateral or any other Guarantor before proceeding
against any particular Guarantor (any such requirement having been specifically
waived).

 

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

 

(a)                                  Guarantor waives any, and all rights
of subrogation, reimbursement, indemnification and contribution, and any other
rights and defenses that are or may become available to Guarantor by reason of
CC Sections 2787 to 2855, inclusive, 2899 and 3433, including, without
limitation, any and all rights or defenses Guarantor may have by reason of
protection afforded to the principal with respect to any of the Guaranteed
Obligations or to any other guarantor of any of the Guaranteed Obligations with
respect to such guarantor’s obligations under its guaranty, in either case, pursuant
to the antideficiency or other laws of this state limiting or discharging the
principal’s indebtedness or such other guarantor’s obligations, including,
without limitation, California Code of Civil Procedure (“CCP”) Sections
580a, 580b, 580d or 726; and

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(a)                                  Guarantor shall continue to be liable
under this Guaranty and the provisions hereof will remain in full force and
effect notwithstanding (i) any modification, agreement or stipulation
between Borrower and Administrative Agent or their respective successors and
assigns, with respect to the Loan Documents or the Swap Contracts or the
obligations encompassed thereby, including, without limitation, the Guaranteed
Obligations, (ii) Administrative Agent’s waiver of or failure to enforce
any of the terms, covenants or conditions contained in the Loan Documents or
the Swap Contracts or in any modification thereof, (iii) any discharge or
release of Borrower or any other guarantor from any liability with respect to
the 

 

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Guaranteed
Obligations, (iv) any discharge, release, exchange or subordination of any
real or personal property then held by Administrative Agent or any Lender as
security for the performance of the Guaranteed Obligations, (v) any
additional security taken for the Guaranteed Obligations, whether real or
personal property, (vi) any foreclosure or other realization on any
security for the Guaranteed Obligations, regardless of the effect upon
Guarantor’s subrogation, contribution or reimbursement rights against Borrower
or any other guarantor, (vii) any additional loans or financial
accommodations to Borrower or (viii) the manner or order by which payments
are applied to principal, interest or other obligations under the Loan
Documents and the Swap Contracts. 
Without limiting the generality of the foregoing, Guarantor hereby
waives the rights and benefits under CC Section 2819, and agrees that by
doing so Guarantor’s liability shall continue even if Administrative Agent or
any Lender alters any obligations under the Loan Documents or the Swap
Contracts in any respect or Administrative Agent’s or Lenders’ remedies or
rights against Borrower are in any way impaired or suspended without Guarantor’s
consent.

 

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

 

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

 

(d)                                 Guarantor acknowledges and agrees that
Guarantor may be required to perform the Guaranteed Obligations in accordance
with the terms hereof notwithstanding the fact that the Loan has fully matured,
that the outstanding principal balance thereof is fully due and payable and
that Borrower is in default of its obligation to pay the full amount due under
the Notes on the maturity thereof.

 

5.                                       The liability of Guarantor under this
Guaranty is a guaranty of payment and performance and not of collectibility,
and is not conditioned or contingent upon the genuineness, validity, regularity
or enforceability of the Loan Documents, Swap Contracts or other instruments
relating to the creation or performance of the Guaranteed Obligations or the
pursuit by Administrative Agent or any Lender of any remedies which any now has
or may hereafter have with respect thereto under the Loan Documents or Swap
Contracts, at law, in equity or otherwise. 
Guarantor hereby waives any and all benefits and defenses under CC Section 2810
and agrees that by doing so Guarantor shall be liable even if Borrower had no
liability at the time 

 

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of execution of any of
the Loan Documents or Swap Contracts or thereafter ceases to be liable.  Guarantor hereby waives any and all benefits
and defenses under CC Section 2809 and agrees that by doing so Guarantor’s
liability may be larger in amount and more burdensome than that of
Borrower.  Guarantor’s liability
hereunder shall not be limited or affected in any way by any impairment or any
diminution or loss of value of any security or collateral for the Loan, whether
caused by hazardous substances or otherwise, Administrative Agent’s or any
Lender’s failure to perfect a security interest in such security or collateral
or any disability or other defense of Borrower or any other guarantor.

 

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

 

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

 

8.                                       (a)                                  Guarantor agrees that nothing contained
herein shall prevent Administrative Agent and Lenders from suing on the Notes
or from exercising any rights available to them under the Notes or under any of
the other Loan Documents or Swap Contracts and that the exercise of any of the
aforesaid rights will not constitute a legal or equitable discharge of
Guarantor.  Guarantor understands that
the exercise by Administrative Agent and Lenders of certain rights and remedies
contained in the Swap Contracts and Loan Documents (such as a nonjudicial
foreclosure) may affect or eliminate Guarantor’s right of subrogation against
Borrower and that Guarantor may therefore incur a partially or totally
non-reimbursable liability hereunder; nevertheless, Guarantor hereby authorizes
and empowers Administrative Agent to exercise, in its sole discretion, any
rights and remedies, or any combination thereof, which may then be available to
Administrative Agent and Lenders, since it is the intent and

 

5

 

purpose
of Guarantor that the obligations hereunder are absolute, independent and
unconditional under any and all circumstances. 
Guarantor expressly waives any defense (which defense, if Guarantor had
not given this waiver, Guarantor might otherwise have) to a judgment against
Guarantor by reason of a nonjudicial foreclosure sale.  Without limiting the generality of the
foregoing, Guarantor hereby expressly waives any and all benefits and defenses
under (i) CCP Section 580a (which Section, if Guarantor had not given
this waiver, would otherwise limit Guarantor’s liability after a nonjudicial
foreclosure sale to the difference between the obligations guaranteed herein
and the fair market value of the property or interests sold at such nonjudicial
foreclosure sale), (ii) CCP Sections 580b and 580d (which Sections, if
Guarantor had not given this waiver, would otherwise limit Lender’s right to
recover a deficiency judgment with respect to purchase money obligations and
after a nonjudicial foreclosure sale, respectively), and (iii) CCP Section 726
(which Section, if Guarantor had not given this waiver, among other things,
would otherwise require Lender to exhaust all of its security before a personal
judgment may be obtained for a deficiency). 
Notwithstanding any foreclosure of the lien of any deed of trust or
security agreement with respect to any or all of the real or personal property
secured thereby, whether by the exercise of the power of sale contained
therein, by an action for judicial foreclosure or by an acceptance of a deed in
lieu of foreclosure, Guarantor shall remain bound under this Guaranty.

 

(b)                                 Guarantor waives all benefits and
defenses under CC Sections 2847, 2848 and 2849 and agrees that Guarantor shall
have no right of subrogation against Borrower or against any collateral or
security provided for in the Loan Documents or Swap.  Contracts and no right of reimbursement or
contribution against any other guarantor unless and until all Guaranteed
Obligations have been indefeasibly paid and satisfied in full, and
Administrative Agent and Lenders have released, transferred or disposed of all
of their rights, title and interest in any collateral or security.  To the extent the waiver of Guarantor’s
rights of subrogation, reimbursement and contribution as set forth herein is
found by a court of competent jurisdiction to be void or voidable for any
reason, Guarantor further agrees that Guarantor’s rights of subrogation and
reimbursement against Borrower and Guarantor’s rights of subrogation against
any collateral or security shall be junior and subordinate to any rights
Administrative Agent or Lenders may have against Borrower and to all rights,
title and interest Administrative Agent or Lenders may have in such collateral
or security, and Guarantor’s rights of contribution against any other guarantor
shall be junior and subordinate to any rights Administrative Agent or Lenders
may have against such other guarantor. 
Administrative Agent and Lenders may use, sell or dispose of any item of
collateral or security as it sees fit without regard to Guarantor’s subrogation
and contribution rights, and upon disposition or sale of any item, Guarantor’s
rights with respect to such item will terminate.  Guarantor understands that Guarantor may
record a Request for Notice of Default pursuant to CC Section 2924(b) and
thereby receive notice of any proposed foreclosure of any real property
collateral then securing the Guaranteed Obligations.  With respect to the foreclosure of any
security interest in any personal property collateral then securing the
Guaranteed Obligations, Administrative Agent and Lenders agree to give
Guarantor five (5) days’ prior written notice, in the manner set forth in Section 11
hereof, of any sale or disposition of any such personal property collateral,
other than collateral which is perishable, threatens to decline speedily in
value, is of a type customarily sold on a recognized market, or is cash, cash
equivalents, certificates of deposit or the like.

 

6

 

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

 

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

 

(e)                                  So long as any of the Guaranteed
Obligations are owing to Administrative Agent or any Lender, Guarantor shall
not, without the prior written consent of Administrative Agent, commence or
join with any other party in commencing any bankruptcy, reorganization or
insolvency proceedings of or against Borrower. 
The obligations of Guarantor under this Guaranty shall not be altered,
limited or affected by any case, voluntary or involuntary, involving the
bankruptcy, insolvency, receivership, reorganization, liquidation or
arrangement of Borrower or by any defense which Borrower may have by reason of
the order, decree or decision of any court or administrative body resulting
from any such case.  Administrative Agent
shall have the sole right to accept or reject any plan on behalf of Guarantor
proposed in such case and to take any other action which Guarantor would be
entitled to take, including, without limitation, the decision to file or not
file a claim.  Guarantor acknowledges and
agrees that any interest on the Guaranteed Obligations which accrues after the commencement
of any such proceeding (or, if interest on any portion of the Guaranteed
Obligations ceases to accrue by operation of law by reason of the commencement
of said proceeding, such interest as would have accrued on any such portion of
the Guaranteed Obligations if said proceedings had not been commenced) will be
included in the Guaranteed Obligations because it is the intention of the
parties that the Guaranteed Obligations should be determined without regard to
any rule or law or order which may relieve Borrower of any portion of such
Guaranteed Obligations.  Guarantor hereby
permits any trustee in bankruptcy, receiver, debtor in possession, assignee for
the benefit of creditors or similar Person to pay Administrative Agent and
Lenders, or allow the claim of Administrative Agent and Lenders in respect of,
any such interest accruing after the date on which such proceeding is
commenced.  Guarantor hereby assigns to
Administrative Agent (for the benefit of Lenders) Guarantor’s right to receive
any payments from any trustee in bankruptcy, receiver, debtor in possession,
assignee for the benefit of creditors or similar Person by way of dividend,
adequate protection payment or otherwise. 
If all or any portion of the Guaranteed Obligations are paid or performed
by Borrower, the obligations of Guarantor hereunder shall continue and remain
in full force and effect in the event that all or any part of such payment(s) or
performance(s) is avoided or recovered directly or indirectly from
Administrative Agent or Lenders as a preference, fraudulent transfer or
otherwise in such case irrespective of payment in 

 

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full
of all obligations under the Loan Documents and Swap Contracts.

 

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

 

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

 

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

 

To Administrative                                             Wachovia Bank, National Association

Agent:                                                                                                           Real Estate
Financial Services

Mail Code:  CA 6500

1800 Century Park East, Suite 500

Los Angeles, CA 90067

Attn:  Real Estate Financial
Services

Telephone:  (310) 789-8936

Facsimile:  (310) 789-8994

 

To Guarantor:                                                                    KWI Property
Fund I, L.P.

KW Property Fund II, L.P.

c/o Kennedy-Wilson, Inc.

9601 Wilshire Boulevard, Suite 220

Beverly Hills, California 90210

Attention:  Mary Ricks &
John Prabhu

Telephone:    (310) 887-6437

Facsimile:     (310) 887-6409

 

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

 

(a)                                  No consent of any other Person,
including, without limitation, any creditors of Guarantor, and no license,
permit, approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority is
required by Guarantor in connection with this Guaranty or the execution,
delivery, performance, validity or enforceability of this Guaranty and all
obligations required hereunder.  This
Guaranty has been duly executed and delivered by Guarantor, and constitutes the
legally valid and binding obligation of Guarantor enforceable against Guarantor
in accordance with its terms.

 

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

 

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

 

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

 

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

 

(b)                                 copies of filed federal income tax
returns of Guarantor for each taxable year (with all K-1s and other forms and
supporting schedules attached), within thirty (30) days after filing but in any
event not later than one hundred twenty (120) days after the close of each such
taxable year (subject to extension); and

 

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

 

14.                                 KWI Property Fund I, L.P. shall at all
times maintain a combined net worth of at least Forty Million Dollars
($40,000,000).  KW Property Fund II, L.P.
shall at all times maintain a combined net worth of at least Forty Million Dollars
($40,000,000).  As used herein, “net
worth” shall mean an amount equal to the gross fair market value of all of the
applicable Guarantor’s assets (excluding any value for goodwill, trademarks,
patents, copyrights and other similar intangible items), less an amount equal
to all of such Guarantor’s liabilities (including guaranties and other
contingent liabilities), all as reasonably determined by Administrative Agent.

 

9

 

15.                                 KWI Property Fund I, L.P. and KW Property
Fund II, L.P. shall at all times collectively maintain combined unencumbered
liquid assets equal to at least One Million Dollars ($1,000,000).  “Liquid assets” means the following assets of
the applicable Guarantor:  (i) Cash;
(ii) certificates of deposit or time deposits with terms of six (6) months
or less; (iii) A-1/P-1 commercial paper with a term of three (3) months
or less; (iv) U.S. treasury bills and other obligations of the federal
government, all with terms of six (6) months or less; (v) readily
marketable securities (excluding “margin stock” (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System),
restricted stock and stock subject to the provisions of Rule 144 of the
Securities and Exchange Commission); (vi) bankers’ acceptances issued for
terms of six (6) months or less by financial institutions; (vii) repurchase
agreements with terms of six (6) months or less covering U.S. government
securities; and (viii) unfunded capital commitments in such Guarantor.

 

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

 

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

 

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

 

(b)                                 KW Property Fund II, L.P. is a limited
partnership duly formed, validly existing and in good standing under the laws
of the State of Delaware, has the power to own its assets and to transact the
business in which it is now engaged and is in good standing under the laws of
each jurisdiction where its ownership or lease of property or the conduct of
its business requires such qualification.

 

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

 

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

 

10

 

19.                                 Administrative Agent may assign this
Guaranty with any Loan Document or Swap Contracts, without in any way affecting
Guarantor’s liability hereunder.  Any
married person executing this Guaranty agrees that recourse may be had against
community property and separate property for the satisfaction of all
obligations hereby guaranteed.  This
Guaranty shall be binding upon Guarantor, Guarantor’s heirs, representatives,
administrators, executors, successors and assigns and shall inure to the
benefit of and shall be enforceable by Administrative Agent and Lenders, and
their successors, endorsees and assigns. 
As used herein, the singular includes the plural, and the masculine
includes the feminine and neuter and vice versa, if the context so requires.

 

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

 

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

 

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

 

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

 

11

 

24.                                 No provision of this Guaranty may be
changed, waived, revoked or amended without Administrative Agent’s prior
written consent.  Every provision of this
Guaranty is intended to be severable.  If
any term or provision hereof is declared to be illegal or invalid for any
reason whatsoever by a court of competent jurisdiction, such illegality or
invalidity will not affect the balance of the terms and provisions hereof,
which terms and provisions will remain binding and enforceable.

 

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

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

[Signatures on Following
Page]

 

13

 

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

 

	
   

  	
  “Guarantor”

  
	
   

  	
   

  
	
   

  	
  KWI
  PROPERTY FUND I, L.P.,

  
	
   

  	
  a
  Delaware limited partnership,

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Kennedy
  Wilson Property Services, Inc.,

  
	
   

  	
   

  	
  a
  Delaware corporation,

  
	
   

  	
   

  	
  its
  sole general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  John Prabhu

  
	
   

  	
   

  	
  Name:

  	
  JOHN
  PRABHU

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KW
  PROPERTY FUND II, L.P.,

  
	
   

  	
  a
  Delaware limited partnership,

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Kennedy
  Wilson Property Services, Inc.,

  
	
   

  	
   

  	
  a
  Delaware corporation,

  
	
   

  	
   

  	
  its
  sole general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  John Prabhu

  
	
   

  	
   

  	
  Name:

  	
  JOHN
  PRABHU

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  

 

S-1exhibit10_1.htm

 

Exhibit 10.1

 

SHAREHOLDER AGREEMENT

 

This Agreement (“Agreement”) dated the 21st day of September 2009, is made by and among Philip J. Timyan and Riggs Qualified Partners, LLC (the “Shareholders”), GS Financial Corp. (the “Company”) and Guaranty Savings Bank
(the “Bank”).

 

RECITALS

 

WHEREAS, the Company, the Bank and the Shareholders have agreed that it is in their mutual interests to enter into this Agreement as hereinafter described.

 

NOW, THEREFORE, in consideration of the premises and the representations, warranties, covenants and agreements contained herein, and other good and valuable consideration, the parties hereto mutually agree as follows:

 

1.   Representations and Warranties of the Shareholders.  The Shareholders hereby
represent and warrant to the Company and the Bank as follows:

 

	
(a)  
	
The Shareholders have ownership of an aggregate amount of 59,024 shares of the Company’s common stock (“Common Stock”) and have full and complete authority to enter into this Agreement and to bind the entire number of shares of the capital stock of the Company in
which Shareholders have a beneficial ownership interest to the terms of this Agreement;

 

	
(b)  
	
The Shareholders have full power and authority to enter into and perform the Shareholders obligations under this Agreement, and the execution and delivery of this Agreement by the Shareholders have been duly authorized.  This Agreement constitutes a valid and binding obligation of Shareholders, and the performance of its terms shall not constitute
a violation of any limited partnership agreement, operating agreement, bylaws, or any agreement or instrument to which either of the Shareholders is a party;

 

	
(c)  
	
There are no other persons who, by reason of their personal, business, professional or other arrangement with the Shareholders have agreed, in writing or orally, explicitly or implicitly, to take any action on behalf of or in lieu of the Shareholders that would be prohibited by this Agreement; and

 

	
(d)  
	
There are no arrangements, agreements or understandings between the Shareholders and the Company and the Bank other than as set forth in this Agreement.

 

2.   Representations and Warranties of the Company and the Bank.  The Company
and the Bank hereby represent and warrant to the Shareholders as follows:

 

 

 

 

	
(a)  
	
The Company and the Bank have full power and authority to enter into and perform their obligations under this Agreement, and the execution and delivery of this Agreement by the Company and the Bank have been duly authorized by the Boards of Directors of the Company and the Bank and requires no other Board of Directors or shareholder action.  This
Agreement constitutes a valid and binding obligation of the Company and the Bank, and the performance of its terms does not constitute a violation of the Articles of Incorporation or Bylaws of the Company and the Charter and Bylaws of the Bank; and

 

	
(b)  
	
There are no arrangements, agreements or understandings between the Company, the Bank and the Shareholders other than as set forth in this Agreement.

 

3.   Covenants.

 

	
(a)  
	
During the term of this Agreement, the Company and the Bank covenant and agree as follows:

 

(i)   Consultation with Chairman.  The Shareholders shall have the opportunity to meet with the Chairman of the Boards of the Company
and the Bank, on a monthly basis, to discuss the condition of the Company and the Bank.  Such meetings may be conducted either in-person in Louisiana, or telephonically, at the Shareholders’ discretion, and shall last not more than two hours in duration.  One person shall represent the Shareholders at these meetings.  Upon the consent of the Shareholders’ representative, the Company and the Bank may provide a suitable substitute to the Chairman’s attendance at this
meeting.

 

	
(b)  
	
During the term of this Agreement, the Shareholders covenant and agree as follows:

 

(i)   Nominations or Shareholder Proposals.  The Shareholders will not initiate, propose or submit any shareholder proposal to the
Company, nor encourage or otherwise solicit or induce or attempt to induce any other person to initiate, propose or submit any shareholder proposal to the Company, unless such action is supported by a majority of the Company’s Board of Directors.  The Shareholders will not seek election to, or seek to place a representative or other affiliate or nominee on, or induce or attempt to induce or encourage any other person to nominate one or more persons to the Company’s Board of Directors or
seek removal of any member of the Company’s Board of Directors unless such action is supported by a majority of the Company’s Board of Directors.  The Shareholders will not:

 

	
(A)  
	
(i) join with or assist any person or entity, directly or indirectly, in opposing, or make any statement in opposition to, any proposal or director nomination submitted by the Company’s Board of Directors to a vote of the Company’s shareholders, or (ii) join with or assist any person or entity, directly or indirectly, in supporting or
endorsing (including supporting, requesting or joining in any request for a meeting of shareholders in connection with), or make any statement in favor of, any proposal submitted to a vote of the Company’s shareholders that is opposed by the Company’s Board of Directors; or

 

 

-2-

 

	
(B)  
	
vote for any nominee or nominees for election to the Board of Directors of the Company other than those nominated or supported by the Company’s Board of Directors or consent to become a nominee for election as a director of the Company unless nominated or supported by a majority of the Company’s Board of Directors;

 

(ii)   Board Nominees and Proposals.  The Shareholders hereby agree to vote all of the shares of Common Stock which the Shareholders
directly or indirectly beneficially own and have voting power over in favor of (i) nominees to the Board of Directors of the Company recommended by the board and (ii) proposals submitted to the Company’s shareholders which have been approved by a majority of the Company’s Board of Directors, with the exception of any new stock compensation plans or amendments to any existing stock compensation plans, other than tax-qualified plans.

 

(iii)   Solicitations.  The Shareholders will not solicit proxies or written consents or assist or participate in any other way,
directly or indirectly, in any solicitation of proxies or written consents, or otherwise become a “participant” in a “solicitation,” or assist any “participant” in a “solicitation” (as such terms are defined in Instruction 3 of Item 4 of Schedule 14A and Rule 14a-l of Regulation 14A, respectively, under the Securities Exchange Act of 1934) in opposition to any recommendation or proposal of the Company’s Board of Directors, or recommend or request or induce
or attempt to induce any other person to take any such actions, or seek to advise, encourage or influence any other person with respect to the voting of (or the execution of a written consent in respect of) the Company’s Common Stock, or execute any written consent in lieu of a meeting of the holders of the Company’s Common Stock or grant a proxy with respect to the voting of the capital stock of the Company to any person or entity other than the Board of Directors of the Company;

 

(iv)   No Company Transaction Proposals.  The Shareholders will not (A) propose or seek to effect a merger, consolidation, recapitalization,
reorganization, sale, lease, exchange or other disposition of substantially all the assets of, or other business combination involving, or a tender or exchange offer for securities of, the Company or the Bank or any material portion of the Company’s or the Bank’s business or assets or any other type of transaction that would result in a change in control of the Company (any such action described in this clause (A) is a “Company Transaction Proposal”), (B) seek to exercise any control or
influence over the management of the Company or the Boards of Directors of the Company or the Bank or any of the businesses, operations or policies of the Company or the Bank; (C) other than a presentation to the Company’s Board of Directors, present to the Company, its shareholders or any third party any proposal constituting or that could reasonably be expected to result in a Company Transaction Proposal, or (D) seek to effect a change in control of the Company.  None of the foregoing restrictions
shall prevent the Shareholders from engaging in the foregoing restricted actions if any such action is supported by a majority of the Company’s Board of Directors.  In addition, the Shareholders will not: (A) publicly suggest or announce their willingness or desire to engage in a transaction or group of transactions or have another person engage in a transaction or group of transactions that would constitute or could reasonably be expected to result in a Company Transaction Proposal or take any
action that might require the Company to make a public announcement regarding any such Company Transaction Proposal unless such action is supported by a majority of the Company’s Board of Directors; or (B) initiate, request, induce, encourage or attempt to induce or give encouragement to any other person (other than to members of the Company’s Board of Directors) to initiate any proposal constituting or that can reasonably be expected to result in a Company Transaction Proposal, or otherwise provide
assistance to any person who has made or is contemplating making, or enter into discussions or negotiations with respect to, any proposal constituting or that can reasonably be expected to result in a Company Transaction Proposal; and

 

-3-

 

 

(v)   Sale of 1% or More of Company Common Stock; Sale to a 5% Shareholder.  In the event that at any time from the date of this Agreement and through
the Term of this Agreement, the Shareholders intend to sell 1% or more of the Company’s outstanding Common Stock, based on the Company’s most recent public filing, in a block trade, in a private sale or in the open market, or the Shareholders intend to sell shares of Company Common Stock to any person the Shareholders believe, after reasonable inquiry, would beneficially own immediately after any such sale or transfer more than 5% of the outstanding shares of the Company Common Stock, except where
such sale is pursuant to an order, directive, or other requirement of the Office of Thrift Supervision, or other appropriate regulator, the Shareholders will provide written notice to the Company of such intent, which notice shall include the proposed sale price, and the Company shall then have the right to purchase the Common Stock from the Shareholders at the proposed sale price (“Right of First Refusal”).  Within two (2) business days following receipt of written notice from the Shareholders,
the Company will provide written notice to the Shareholders as to whether or not the Company will exercise its Right of First Refusal, the Company can exercise its Right of First Refusal in full or in part in its sole discretion.  If the Company chooses to exercise the Right of First Refusal in full or in part, settlement of the purchase of the shares being sold by the Shareholders pursuant to the Right of First Refusal will be within three (3) business days of such exercise, with payment by wire transfer
to an account identified by the Shareholders.  If the Company does not choose to exercise the Right of First Refusal, or does not respond to the notice within two (2) business days, then the selling Shareholders shall be free to sell the shares to the third party.

 

4.   Public Statements; Litigation.  During the term of this Agreement, no party to this Agreement
shall cause, discuss, cooperate or otherwise aid in the preparation of any press release or other publicity other than filings required by securities laws, concerning any other party to this Agreement or its operations without prior approval of such other party unless required by law, in which case notice of such requirement shall be given to the other party; and provided there has been no material breach of this Agreement by the Company or the Bank, the Shareholders shall not, directly or indirectly:

 

	
(a)  
	
make any statement, public or otherwise, in opposition to, or that would reflect negatively against, the Company, the Bank, the Board of Directors of the Company or the Bank, or any of the directors or officers of the Company or the Bank;

 

	
(b)  
	
directly or indirectly participate or act in concert with any affiliate, group or other person to participate, by encouragement or otherwise, in any litigation against or derivatively on behalf of the Company or the Bank, or any of their respective officers or directors; or

 

 

-4-

 

	
(c)  
	
provide, or act in concert with any person to provide, any funds, services or facilities to any person in support of any activity by such person that would be a violation of their covenants under the provisions of this Section 4 if undertaken by any of them.  In addition, during the term of this Agreement, provided there has been no material
breach of this Agreement by the Shareholders, neither the Company nor any officer or director of the Company shall make any statement, public or otherwise, in opposition to, or that would reflect negatively against the Shareholders, nor directly or indirectly participate or act in concert with any affiliate, group or other person to participate, by encouragement or otherwise, in any litigation against or derivatively on behalf of the Shareholders.

 

5.   Remedies.  The Company, the Bank and the Shareholders acknowledge and agree
that a breach or threatened breach by any party may give rise to irreparable injury inadequately compensable in damages, and accordingly each party shall be entitled to injunctive relief to prevent a breach of the provisions hereof and to enforce specifically the terms and provisions hereof in any state or federal court having jurisdiction, in addition to any other remedy to which such aggrieved party may be entitled to at law or in equity.  In the event either party institutes any legal action to enforce
such party’s rights under, or recover damages for breach of, this Agreement, the prevailing party or parties in such action shall be entitled to recover from the other party or parties all reasonable costs and expenses, including but not limited to actual attorneys’ fees, court costs, witness fees, disbursements and any other expenses of litigation or negotiation incurred by such prevailing party or parties.

 

6.   Term.  This Agreement shall terminate on the earlier of June 30, 2011 or
the date on which the Company ceases to exist by reason of merger, sale of assets, liquidation, exchange of shares, or otherwise.

 

7.   Notices.  All notice requirements and other communications shall be deemed
given when delivered or on the third succeeding business day after being mailed by registered or certified mail, return receipt requested, addressed to the Shareholders and the Company and the Bank below:

 

	
Shareholders:
	
Philip J. Timyan Riggs

Qualified Partners, LLC

4324 Central Avenue

Western Springs, Illinois 60558

 

	
With a copy to:
	
Timothy R. McTaggart, Esq.

Pepper Hamilton LLP

Hamilton Square

600 Fourteenth Street, N.W.

Washington, D.C. 20005-2004

 

Facsimile: 202-220-1665

 

 

 

-5-

 

	
The Company and the 

Bank:
	
Bruce A. Scott, Esq.

Executive Vice President Guaranty 

Savings Bank

3798 Veterans Blvd.

Metairie, Louisiana 70002

Facsimile: 504-883-5544

 

	
With a copy to:
	
Raymond A. Tiernan, Esq.

Eric M. Marion, Esq.

 

Elias, Matz, Tiernan & Herrick L.L.P.

734 15th Street, N.W., 11th Floor 

Washington, D.C. 20005

Facsimile: 202-347-2172

 

8.   Reimbursement of Expenses.  The Company shall, within five (5) business days of submission by the Shareholders
of reasonable documentation, reimburse the Shareholders for all legal fees and expenses, up to $7,500 in the aggregate, incurred in connection with their activities with respect to the Company since January 1, 2009.  Such invoices need not include any detail that may be deemed to waive the attorney-client privilege between the Shareholders and their counsel.

 

9.   Entire Agreement.  This Agreement constitutes the entire agreement between
the parties hereto pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions of the parties in connection therewith not referred to herein.  This Agreement supersedes the prior agreement among the parties entered into on April 3, 2009.

 

10.   Counterparts; Facsimile.  This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, and signature pages may be delivered by facsimile, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

11.   Headings.  The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.

 

12.   Governing Law.  This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Louisiana, without giving effect to its principles of conflicts of laws.

 

13.   Severability.  If any term, provision, covenant or restriction of this
Agreement is held by any governmental authority or a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

 

 

-6-

 

14.   Successors and Assigns.  This Agreement shall be binding upon and shall
inure to the benefit of and be enforceable by the successors and assigns, and transferees by operation of law, of the parties.

 

15.   Survival of Representations, Warranties and Agreements.  All representations,
warranties, covenants and agreements made herein shall survive the execution and delivery of this Agreement.

 

16.   Amendments.  This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by all of the parties hereto.

 

17.   Further Action.  Each party agrees to execute any and all documents, and
to do and perform any and all acts and things necessary or proper to effectuate or further evidence the terms and provisions of this Agreement.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above.

 

	  	
GS FINANCIAL CORP.

	  	  
	  	By:	
/s/ Albert J. Zahn, Jr.   

	  	  	
Albert J. Zahn, Jr.

	  	  	
Chairman of the Board

	  	  
	  	  
	  	
GUARANTY SAVINGS BANK

	  	  
	  	By:	
/s/ Albert J. Zahn, Jr.   

Albert J. Zahn, Jr.

Chairman of the Board

	  	  
	  	
RIGGS QUALIFIED PARTNERS, LLC

	  	  
	  	By:	
/s/ Philip J. Timyan   

Name: Philip J. Timyan

Managing Member

	  	  
	  	
PHILIP J. TIMYAN

	  	  
	  	By:	
/s/ Philip J. Timyan   

 Philip J. Timyan

	  	  
	  	  

-7-

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