Document:

Exhibit 10.109

 

Guaranty

 

	
  To:  Mizuho Bank, Ltd.

  	
  Date:

  

 

	
  Guarantor
  (to be signed/sealed by the Guarantor him/herself)

  
	
   

  	
   

  
	
  Address:

  	
  9601
  Wilshire Blvd., Suite 220

  Beverly Hills, CA 90210

  
	
   

  	
   

  
	
  Name:

  	
  Kennedy
  Wilson, Inc.

  Robert E. Hart

  Vice President and Assistant Secretary

  

 

Agreement

 

(hereinafter,
the Bank), the Guarantor, hereby agreeing to the terms and conditions of this
Agreement in addition to the provisions of the Agreement on Bank Transactions
and the agreement related to the obligations specified below, both agreed to
separately by the Obligor, hereby guarantees, and shall be liable jointly and
severally with the Obligor for, the performance of all such obligations.

 

Article 1.                The Bank may without any consent of the Guarantor reed without
affecting the Guarantor’s liability hereunder modify or release any security or
other guarantee held in respect of the Obligor’s obligations hereby guaranteed.

 

Article 2.                The Guarantor shall not set off any obligations the Obligor owes the
Banks against the Obligor’s deposits and/or any other of the Obligor’s credits
with the Bank.

 

Article 3.                In case the Guarantor performs any of its obligations owed under this
guarantee, the Guarantor shall not exercise any rights obtained from the Bank
by way of subrogation without the prior consent of the Bank so long as
transactions between the Obligor and the Bank continue. Furthermore, in ease
monetary compensation is paid with respect to the rights which are subject to
such subrogation, the Bank shall have preference aver the Guarantor in the
appropriation of such money for the satisfaction of the Obligor’s obligations
owed to the Bank.

 

Article 4.                If the Guarantor has provided the Bank with any guarantee for the
transactions between the Obligor and the Bank other than this guarantee, said
other guarantee shall in to way he modified- or affected by this guarantee. If
the Guarantor has provided the Bank with any other guarantee with a limitation
in amount, the amount guaranteed by this Agreement shall not be included in but
shall be deemed to be in addition to the maximum amount in said other
guarantee. These provisions described hereinabove in this Article 4 shall
apply to any case in which 

 

 

the Guarantor may hereafter provide the Bank with any other guarantee
for any transactions between the Obligor and the Bank.

 

If the
Guarantor is a corporation:

 

In
providing this guarantee, the Guarantor hereby represents and warrants that it
has undertaken all the necessary procedures under any applicable laws and
regulations, all procedures required by its articles of association, and any
other necessary procedures.

 

Contents
of the guaranteed obligations:  The Guarantor confirms the guaranteed
obligations as follows.

 

To the
Guarantor:  Please select only one of the contents of
guaranteed obligations below (1, 2, 3, 4, 5, 6, or 7) and affix a confirmation
seal/signature in the corresponding space in the right column. If selecting 2,
please check the box next to the appropriate details in subsections (1) and
(2).

 

	
   

  	
   

  	
  /Details (see NOTE)

  	
   

  	
  Confirmation

  seal/signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  Any
  and all obligations which the Obligor at present or in the future may owe the
  Bank under Article I of the Agreement on Bank Transactions, agreed to
  separately by the Obligor.

  	
   

  	
  (certified seal)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Any
  and all obligations which the Obligor at present or in the future may owe the
  Bank under Article I of the Agreement on Bank Transactions, agreed to
  separately by the Obligor, provided such obligations conform to the following
  limits:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  (1)  Limit
  on guarantee obligation

  	
   

  	
  (certified seal)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o  Not
  to exceed JPY                             .

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o  Not
  to exceed limit on principal of JPY                   
  plus any and all obligations incident thereto.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)  Time
  limit on guaranteed obligations

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o  Obligations
  from transactions entered into until                       
  (date).

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  o  No
  time limit.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  The
  Obligor’s obligations to the Bank arising from the loan agreement entered
  into on July 10, 2001(date) (initial loan amount at JPY6000,000,000),
  plus any and all obligations incident thereto.

  	
   

  	
  (certified seal)

  

 

2

 

	
   

  	
   

  	
  /Details (see NOTE)

  	
   

  	
  Confirmation

  seal/signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  Obligor’s
  obligations to the Bank in the amount of JPY                         
  (agreement amount JPY                        )
  arising from the note or bill drawn on                               
  (date), plus any and 11 obligations incident thereto. Furthermore, when a new
  note or bill is executed by the Obligor and delivered to the Bank in
  substitution for a note or bill theretofore executed and delivered by the
  Obligor, the previous note or bill shall be deemed to have been revised, and
  this guarantee will cover the obligations arising from a loan against the new
  note or bill. The same shall apply to any subsequent renewal of notes or
  bills

  	
   

  	
  (certified seal)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  The
  Obligor’s indemnity obligations to the Bank in the amount of JPY                       
  (agreement amount JPY                         )
  arising from the application for an acceptance or guarantee transaction dated
                          ,
  plus any and all obligations incident thereto.

  	
   

  	
  (certified seal)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  Any
  and all of the Obligor’s obligations to the Bank arising from the overdraft
  agreement (overdraft limit amount JPY                         )
  dated                             .

  	
   

  	
  (certified seal)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
   

  	
   

  	
  (certified seal)

  

 

NOTE:  If the Guarantor wishes to guarantee
obligations arising from only certain type(s) of transaction, he or she is
requested to indicate the type(s) of obligations (transaction} in the
corresponding space and indicate that a modification was made by stating the
number of letters inserted outside of the column and affixing his or her seal/signature
beside such statement.

 

(The
English translation is for convenience only. 
All questions that may arise within or without courts of law in regard
to the meaning of the words, provisions, and stipulations of this Agreement
shall be decided in accordance with the Japanese text.)

 

3Exhibit 10.110

 

COMMERCIAL GUARANTY

 

P1-71414.”

 

	
  Principal

  	
   

  	
  Loan Date

  	
   

  	
  Maturity

  	
   

  	
  Loan No.

  	
   

  	
  Call / Coll

  	
   

  	
  Account

  	
   

  	
  Officer

  7-10

  	
   

  	
  Initials

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

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

 

	
  Borrower:

  	
  KW Indigo
  Land, LLC, a Delaware limited liability company

  9601
  Wilshire Boulevard, Suite 220

  Beverly Hills, CA 90210

  	
  Lender:

  	
  Pacific Western Bank

  Beverly Hills Office

  9454 Wilshire Boulevard 

  Beverly
  Hills, GA 90212

  
	
   

  	
   

  
	
   

  	
   

  
	
  Guarantor:

  	
  Kennedy-Wilson, Inc.,
  a De/aware corporation

  9601
  Wilshire Boulevard, Suite 220

  Beverly Hills, CA 90210

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

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

 

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

 

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

 

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

 

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

 

GUARANTOR’S AUTHORIZATION TO
LENDER. Guarantor authorizes Lender, either before or
after any revocation hereof, without notice or demand 

 

 

and without lessening Guarantor’s
liability under this Guaranty, from time to time: (A) prior to revocation
as sat forth above, to make one or more additional secured or unsecured loans
to Borrower, to lease equipment or other goods to Borrower, or otherwise to
extend additional credit to Borrower, (B) to alter, compromise, renew,
extend, accelerate, or otherwise change one or more times the time for payment
or other terms of the Indebtedness or any part of the Indebtedness, including
increases and decreases of the rate of Interest on the Indebtedness; extensions
may be repeated and may be for longer than the original loan ten-n; (C) to
take and hold security for the payment of this Guaranty or the Indebtedness,
and exchange, enforce, waive, subordinate, fail Or
decide not to perfect, and release any such
security, with or without the substitution of new collateral; (0) to release,
substitute, agree not to sue, or deal with any one or more of Borrower’s sureties,
endorsers, or other guarantors on any terms or In any manner Lender may choose;
(E) to determine how, when and what application of payments and credits
shall be made on the Indebtedness; (F) to apply such security and direct
the order or manner of sale thereof, including

 

 

	
  Loan No: 406262441

  	
   

  	
   

  

 

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

 

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

 

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

 

Additional Requirements.

 

(I)  Financial Statements:

 

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

 

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

 

(II)  Financial
Covenants/Ratios:

 

DEBT/WORTH RATIO.
Guarantor to maintain a maximum ratio of Debt/Worth of 4.00 to 1.00. The ratio “Debt/Worth”
means Guarantor’s total liabilities, excluding debt subordinated to Lender, and
divided by Guarantor’s Effective Tangible Net Worth. This ratio must be
maintained at all times and may be evaluated annually. The term “Effective
Tangible Net Worth’ means Guarantor’s total assets excluding all intangible
assets (i.e. goodwill, trademarks, patents, copyrights, organization expenses,
and similar intangible Items) and excluding due from related entitles (e.g.
affiliates, employees, subsidiaries, shareholders, etc.), less total
liabilities excluding debt subordinated to Lender,

 

EFFECTIVE TANGIBLE NET WORTH.
Guarantor to maintain a minimum Effective Tangible Net Worth of $15,000,000.00.
The term “Effective Tangible Net Worth’ means Guarantor’s total assets
excluding all intangible assets (i.e. goodwill, trademarks, patents,
copyrights, organization expenses, and similar intangible items) and excluding
due from related entities (e.g. affiliates, employees, subsidiaries,
shareholders, etc.), less total liabilities excluding debt subordinated to
Lender. This amount must be maintained at all times and may be evaluated
annually.

 

PROFITABILITY.
Guarantor must be profitable at all
times.

 

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

 

GUARANTOR’S WAIVERS.
Except as prohibited by applicable law. Guarantor waives any right to require
Lender to (A) make any presentment, protest, demand, or notice of any
kind, including notice of change of any terms of repayment of the Indebtedness,
default by Borrower or any other guarantor or surety, any action or nonaction
taken by Borrower, Lender, or any other guarantor or surety of Borrower, or the
creation of new or additional
Indebtedness; (8) proceed against any person, Including Borrower, before
proceeding against Guarantor; (C) proceed against any collateral for the
indebtedness, including Borrower’s collateral, before proceeding against
Guarantor,. (D) apply any payments or proceeds received against the
Indebtedness in any order; (E) give notice of the terms, time, and place
of any sale of the collateral pursuant to the Uniform Commercial Code or any
other law governing such sale; (F) disclose any Information about the
Indebtedness, the Borrower, the collateral, or any other guarantor or surety,
or about any action or nonaction of Lender; or (G) pursue any remedy or
course of action in Lender’s power whatsoever.

 

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

 

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

 

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

 

Guarantor waives all rights and defenses
that Guarantor may have
because Borrower’s obligation is secured by real property. This means among
other things that Lender may collect from Guarantor without first
foreclosing on any reef or personal property collateral pledged by Borrower.
(0) If Lender forecloses on any real property collateral pledged by Borrower; (1) the
amount of Borrower’s obligation may be reduced only by the  price
for which the collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price. (2) Lender may

 

2

 

collect from Guarantor even If Lender, by
foreclosing on the real property collateral, has destroyed any right Guarantor
may have to collect from Borrower. This is an unconditional and irrevocable
waiver of any rights and defenses Guarantor may have because Borrower’s obligation
is secured by real property. These rights and defenses include, but are not
limited to, any rights and defenses based upon Section 580a, 580b, 580d,
or 726 of the Cade of Civil Procedure.

 

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

 

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

 

Subordination of Borrower’s Debts to
Guarantor. Guarantor agrees that the Indebtedness, whether now existing or
hereafter created, shall be superior to any claim that Guarantor may now have
or hereafter acquire against Borrower, whether or not Borrower becomes
insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have
against Borrower, upon any account whatsoever, to any claim that Lender may now
or hereafter have against Borrower. In the event of insolvency and consequent
liquidation of the assets of Borrower, through bankruptcy, by an assignment for
the benefit of creditors, by voluntary liquidation, or otherwise, the assets of
Borrower applicable to the payment of the claims of both Lender and Guarantor
shall be paid to Lender and shall be first applied by Lender to the
Indebtedness. Guarantor does hereby assign to Lender all claims which it may
have or acquire against Borrower or against any assignee or trustee in
bankruptcy of Borrower; provided however, that such assignment shall be
effective only for the purpose of assuring to Lender full payment in legal
tender of the Indebtedness. If Lender so requests, any notes or credit
agreements now or hereafter evidencing any debts or obligations of Borrower to
Guarantor shall be marked with a legend that the same are  subject
to this Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender
is hereby authorized, in the name of Guarantor, from time to lime to file
financing statements and continuation statements and to execute documents end
to take such other actions as Lender deems necessary or appropriate to perfect,
preserve and enforce its rights under this Guaranty.

 

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

 

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

 

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

 

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

 

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

 

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

 

INTEGRATION. Guarantor further agrees that
Guarantor has read and fully understands the terms of this Guaranty. Guarantor
has had the opportunity to be advised by Guarantor’s attorney with respect to
entering Into this Guaranty. Guarantor further agrees that the Guaranty
represents the final agreement between Guarantor and Lender regarding the
matters addressed therein and therefore: (a) incorporates all negotiations
of the parties relating to the Guaranty; (b) there are no unwritten oral
agreements between Lender and Guarantor, and (c) this Guaranty may not be
contradicted by evidence of any prior, contemporaneous, or subsequent oral
agreements or understandings of Lender and Guarantor. Guarantor hereby
indemnifies and holds Lender harmless from all losses, claims, damages, arid
costs (Including Lender’s attorney’s fees) suffered by Lender as a result of
any breath by Guarantor of the warranties, representations and agreements of
this Paragraph.

 

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

 

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

 

NO
WAIVER BY LENDER. Lender
shall
not be deemed to have waived any rights ender this Guaranty unless such waiver
is given in writing and 

 

3

 

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

 

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

 

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

 

BORROWER. The word “Borrower” means KW
indigo Land. LLC, a Delaware limited liability company and includes at
co-signers and co-makers signing the Note and all their successors and assigns.

 

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

 

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

 

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

 

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

 

NOTE. The word “Note” means the Note
executed by Borrower in the principal amount of $450,000.00 dated July 1,
2008, together with all renewals of, extensions of, modifications of,
refinancings of, consolidations of and substitutions for the note or credit agreement.

 

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

 

EACH
UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR
UNDERSTANDS THAT THIS GUARANTY IS EFFECTIVE UPON GUARANTOR’S EXECUTION AND
DELIVERY OF THIS GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL
TERMINATED IN THE MANNER SET FORTH IN THE SECTION TITLED “DURATION OF GUARANTY”.
NO FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE.
THIS GUARANTY IS DATED JULY 20, 2009.

 

	
  GUARANTOR:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  KENNEDY-WILSON,
  INC., A DELAWAE CORPORATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Freeman A. Lyle

  	
   

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

  	
   

  
	
  a
  Delaware corporation

  	
   

  
			

 

4

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