(b)                                  “ Capital Lease ”, as applied to any Person, means any lease of any property (whether real, personal or mixed) by that Person or entity as lessee that, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of that Person or entity.

(c)                                   “ Cash Equivalent ” means (A) readily marketable obligations issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof having maturities of not more than 360 days from the date of acquisition thereof; (B) time deposits with, or insured certificates of deposit or bankers’ acceptances of, any commercial bank that (i) is organized under the laws of the United States of America, any state thereof or the District of Columbia or is the principal banking subsidiary of a bank holding company organized under the laws of the United States of America, any state thereof or the District of Columbia, and (ii) has combined capital and surplus of at least $500,000,000; (C) commercial paper issued by any person organized under the laws of any state of the United States of America and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or at least “A-1” (or the then equivalent grade) by S&P, in each case with maturities of not more than 180 days from the date of acquisition thereof; and (D) investments in money market investment programs registered under the Investment Company Act of 1940, the portfolios of which are limited solely to investments of the character, quality and maturity described in clauses (A), (B) and (C) of this definition.

(d)                                  “ GAAP ” means with respect to the financial statements or other financial information of any Person, generally accepted accounting principles in the United States which are in effect from time to time.

(e)                                   “ Guarantied Obligations ” means Seller’s obligations (without regard to any limitation of recourse against Seller):  (a) to fully and promptly pay the Repurchase Price and other sums owed under the Transaction Documents at the times and according to the terms required by the Transaction Documents, without regard to any modification, suspension, or limitation of such terms not agreed to by Buyer, such as a modification, suspension, or limitation arising in or pursuant to any Insolvency Proceeding affecting Seller (even if any such modification, suspension, or limitation causes Seller’s obligation to become discharged or unenforceable); and (b) to pay all other sums expended by Buyer or Buyer’s designee or nominee acting on Buyer’s behalf in exercising Buyer’s rights and remedies under the Transaction Documents, including Buyer’s Legal Costs relating to the enforcement of remedies pursuant to the Transaction Documents.

(f)                                     “ Guarantor Litigation ” means any litigation, arbitration, investigation, or administrative proceeding of or before any court, arbitrator, or governmental authority, bureau or agency that relates to or affects this Guaranty or any asset(s) or property(ies) of Guarantor.

(g)                                  “ Indebtedness ” means, for any Person:  (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within ninety (90)

2

days of the date the respective goods are delivered or the respective services are rendered; (c) indebtedness of others secured by a Lien on the property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (d) obligations of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such person; (e) Capital Leases of such Person; and (f) indebtedness of others guaranteed by such Person.

(h)                                  “ Insolvency Proceeding ” means any case under Title 11 of the United States Code or any successor statute or any other insolvency, bankruptcy, reorganization, liquidation, or like proceeding, or other statute or body of law relating to creditors’ rights, whether brought under state, federal, or foreign law.

(i)                                      “ Legal Costs ” means all costs and actual out-of-pocket expenses reasonably incurred by Buyer in any Proceeding or in obtaining legal advice and assistance in connection with any Proceeding, any Guarantor Litigation, or any default by Seller under the Transaction Documents or by any Guarantor under this Guaranty (including any breach of a representation or warranty contained in this Guaranty), including reasonable attorneys’ fees, disbursements, and other reasonable charges incurred by Buyer’s attorneys, court costs and expenses, and reasonable charges for the services of paralegals, law clerks, and all other personnel whose services are charged to Buyer in connection with Buyer’s receipt of legal services incurred in connection with the enforcement of this Guaranty.

(j)                                      “ Lien ” means any mortgage, lien, encumbrance, charge or other security interest, whether arising under contract, by operation of law, judicial process or otherwise.

(k)                                   “ Marketable Securities ” means any of the following:

(i)                                      98% of the market value of negotiable debt obligations issued by the U.S.  Treasury Department having a remaining maturity of less than 1 year; or

(ii)                                   95% of the market value of negotiable debt obligations issued by the U.S.  Treasury Department having a remaining maturity of 1-10 years; or

(iii)                                90% of the market value of negotiable debt obligations issued by the U.S.  Treasury Department having a remaining maturity of more than 10 years; or

(iv)                               90% of the market value of single-class mortgage participation certificates (“FHLMC Certificates”) in book-entry form backed by single-family residential mortgage loans, the full and timely payment of interest at the applicable certificate rate and the ultimate collection of principal of which are guaranteed by the Federal Home Loan Mortgage Corporation (excluding Real Estate Mortgage Investment Conduit (“REMIC “) or other multi-class pass-through certificates, collateralized mortgage obligations, pass-through certificates backed by adjustable rate mortgages, securities paying interest or principal only and similar derivative securities); or

(v)                                  90% of the market value of single-class mortgage pass-through certificates (“FNMA Certificates”) in book-entry form backed by single-family residential

3

mortgage loans, the full and timely payment of interest at the applicable certificate rate and ultimate collection of principal of which are guaranteed by the Federal National Mortgage Association (excluding REMIC or other multi-class pass-through certificates, pass-through certificates backed by adjustable rate mortgages collateralized mortgage obligations, securities paying interest or principal only and similar derivative securities); or

(vi)                               90% of the market value of single-class fully modified pass-through certificates (“GNMA Certificates” in book-entry form backed by single-family residential mortgage loans, the full and timely payment of principal and interest of which is guaranteed by the Government National Mortgage Association (excluding REMIC or other multi-class pass-through certificates, collateralized mortgage obligations, pass-through certificates backed by adjustable rate mortgages, securities paying interest or principal only and similar derivatives securities); or

(vii)                            85% of all actively and regularly traded investment-grade residential mortgage-backed securities; or

(viii)                         such other collateral as Guarantor and Buyer may agree, with such valuation percentage applied thereto as Buyer, in its sole discretion acting in good faith shall deem appropriate.

(l)                                      “ Net Worth ” means the amount which would be included under stockholders’ equity on a consolidated balance sheet of Guarantor and its Subsidiaries determined on a consolidated basis in accordance with GAAP.

(m)                                “ Person ” means an individual, partnership, limited liability company, corporation, joint stock company, trust or unincorporated organization or a governmental agency or political subdivision thereof.

(n)                                  “ Proceeding ” means any action, suit, arbitration, or other proceeding arising out of, or relating to the interpretation or enforcement of, this Guaranty or the Transaction Documents, including (a) an Insolvency Proceeding; (b) any proceeding in which Buyer endeavors to realize upon any Security or to enforce any Transaction Document(s) (including this Guaranty) against Seller or Guarantor, whether or not Buyer prevails; and (c) any proceeding commenced by Seller or Guarantor against Buyer.

(o)                                  “ Restrictive Covenants ” shall have the meaning set forth in Paragraph 5(c) of this Guaranty.

(p)                                  “ Security ” means any security or collateral held by or for Buyer for the Guarantied Obligations, whether real or personal property, including any mortgage, deed of trust, financing statement, security agreement, and other security document or instrument of any kind securing the Transactions in whole or in part.  “Security” shall include all assets and property of any kind whatsoever pledged or mortgaged to Buyer pursuant to the Security Documents.

(q)                                  “ Seller ” means:  (a) KW Kona Investors, LLC, acting on its own behalf; (b) any estate created by the commencement of an Insolvency Proceeding affecting KW Kona Investors, LLC; (c) any trustee, liquidator, sequestrator, or receiver of Seller or Seller’s property;

4

and (d) any similar person duly appointed pursuant to any law governing any Insolvency Proceeding.

(r)                                     “ Subsequent Guaranty ” shall have the meaning set forth in Paragraph 5(b) of this Guaranty.

(s)                                   “ Subsidiary ” means as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership, limited liability company or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.

(t)                                     “ Transaction Documents ” means:  (a) collectively, the Repurchase Agreement (and any annexes thereto), that certain Custodial Agreement dated as of the date hereof by and among LaSalle Bank, N.A., Buyer and Seller, and this Guaranty; (b) any other documents or instruments relating to any such documents executed by Seller or Guarantor; and (c) any modifications, extensions, renewals, restatements, or replacements of any of the foregoing, whether or not consented to by Guarantor.  If the Transaction Documents, as so defined, are modified pursuant to any Insolvency Proceeding, then Buyer may, at Buyer’s option, deem the definition of Transaction Documents either (1) to have been modified to reflect any such modification, or (2) to continue as it was, without regard to any such modification.

2.                                        Absolute Guaranty of All Guarantied Obligations.  Guarantor unconditionally and irrevocably guarantees Seller’s prompt and complete payment, observance, fulfillment, and performance of all Guarantied Obligations when due.  Guarantor shall be liable for, and obligated to pay and perform, all Guarantied Obligations when due.  All assets and property of Guarantor shall be subject to recourse if Guarantor fails to pay and perform any Guarantied Obligation(s) when and as required to be paid and performed pursuant to the Transaction Documents.

3.                                        Nature and Scope of Liability.  Guarantor’s liability under this Guaranty is primary and not secondary.  Guarantor’s liability under this Guaranty shall be in the full amount of all Guarantied Obligations, including any interest, default interest, costs and fees (including Legal Costs) payable by Seller under the Repurchase Agreement.

4.                                        Changes in Transaction Documents.  Without notice to, or consent by, Guarantor, and in Buyer’s sole and absolute discretion and without prejudice to Buyer or in any way limiting or reducing Guarantor’s liability under this Guaranty but subject to the terms of the Transaction Documents, Buyer may:  (a) grant extensions of time, renewals or other indulgences or modifications to Seller or any other party under any of the Transaction Document(s), (b) change, amend or modify any Transaction Document(s), (c) authorize the sale, exchange, release or subordination of any Security, (d) accept or reject additional Security, (e) discharge or release any party or parties liable under the Transaction Documents, (f) foreclose or otherwise realize on any Security, or attempt to foreclose or otherwise realize on any Security, whether such attempt is successful or unsuccessful, (g) accept or make compositions or other arrangements or file or

5

refrain from filing a claim in any Insolvency Proceeding, (h) make other or additional Transactions to Seller in such amount(s) and at such time(s) as Buyer may determine, (i) credit payments in such manner and order of priority to principal, interest or other obligations as Buyer may determine in its discretion, and (j) otherwise deal with Seller and any other party related to the Transactions or any Security as Buyer may determine in its sole and absolute discretion.  Without limiting the generality of the foregoing, Guarantor’s liability under this Guaranty shall continue even if Buyer alters any obligations under the Transaction Documents in any respect or Buyer’s or Guarantor’s remedies or rights against Seller are in any way impaired or suspended without Guarantor’s consent.  If Buyer performs any of the actions described in this paragraph, then Guarantor’s liability shall continue in full force and effect even if Buyer’s actions impair, diminish or eliminate Guarantor’s subrogation, contribution, or reimbursement rights (if any) against Seller or otherwise adversely affect Guarantor or expand Guarantor’s liability hereunder.

5.                                        Certain Financial Covenants.

(a)                                   Guarantor shall not permit with respect to itself collectively (and its respective Subsidiaries on a consolidated basis), any of the following to be breached, as determined quarterly on a consolidated basis in conformity with GAAP:

Minimum Net Worth .  Net Worth to be less than $75,000,000.00;

Debt to Book Equity .  The ratio of Indebtedness to Net Worth to exceed 3 to 1;

Minimum Liquidity .  The sum of cash and Cash Equivalents to be less than $5,000,000.00, provided , for the purposes of this Guaranty, no amounts described as “restricted cash” in the financial statements delivered pursuant to the Repurchase Agreement shall be included in such calculation;

(b)                                  Guarantor agrees that with respect to any agreement (including, but not limited to, a credit agreement) or guaranty which Guarantor enters into and delivers after the date hereof which contains financial covenants that are applicable to the Guarantor, Guarantor shall deliver a certified copy of such agreement or guaranty (collectively, a “ Subsequent  Guaranty ”) to Buyer so long as such Subsequent Guaranty is not subject to a confidentiality agreement.

(c)                                   Guarantor agrees that in the event that any Subsequent Guaranty contains financial covenants applicable to the Guarantor of the same type as those set forth in Section 5(a) hereof that are more restrictive on the Guarantor than those set forth in Section 5(a) above (the “ Restrictive Covenants ”); (i) Guarantor shall provide written notice of such event and, in the event a copy of such Subsequent Guaranty is not delivered pursuant to Section 5(b) above due to a confidentiality agreement, a description of such Restrictive Covenants satisfactory to Buyer, and (ii) for purposes of this Guaranty the financial covenants in Section 5(a) shall be deemed automatically modified to be equal to the Restrictive Covenants.  Upon request of Buyer, Guarantor shall deliver any additional documentation confirming the foregoing.  Notwithstanding the foregoing, if (i) compliance with any of the Restrictive Covenants is waived by the beneficiary thereof, then for so long as such waiver is in effect, a breach of such Restrictive Covenant shall not constitute a default under this Guaranty (provided that the

6

covenants in Section 5(a) above are not breached), and (ii) if such Restrictive Covenant is modified, supplemented or amended, the financial covenants in Section 5(a) shall be deemed automatically modified to be equal to the Restrictive Covenants as modified, supplemented or amended (it being understood and agreed that if such modification, supplement or amendment makes the financial covenants less restrictive than Section 5(a) above, then the covenants in Section 5(a) above shall once again control).

6.                                        Nature of Guaranty.  Guarantor’s liability under this Guaranty is a guaranty of payment of the Guarantied Obligations, and is not a guaranty of collection or collectibility.  Guarantor’s liability under this Guaranty is not conditioned or contingent upon the genuineness, validity, regularity or enforceability of any of the Transaction Documents.  Guarantor’s liability under this Guaranty is a continuing, absolute, and unconditional obligation under any and all circumstances whatsoever (except as expressly stated, if at all, in this Guaranty), without regard to the validity, regularity or