Exhibit 10.111
REPAYMENT
GUARANTY
THIS REPAYMENT GUARANTY (this
“Guaranty” ) is made as of May 9, 2007, by
KENNEDY-WILSON, INC., a Delaware corporation, and KWI PROPERTY
FUND I, 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 Construction Loan Agreement
of even date herewith by and between Fifth and Madison LLC, a
Delaware limited liability company (“ 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 $63,574,000.00 (the “
Loan ” ), evidenced by one or more secured
promissory notes (collectively, the “ Notes
”), in the aggregate principal amount of $63,574,000.00,
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 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”), 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 twenty-five percent (25%) of the principal amount
of the Loan outstanding on the date the Notes become due and
payable in full, whether at maturity or by acceleration or
otherwise, plus twenty-five percent (25%) of any additional
principal sums disbursed by Administrative Agent and Lenders
thereafter (the “ Guaranteed Principal Amount
” ), plus 100% of (a) attorneys’ fees and
collection costs and all other sums other than principal owing on
the Loan and (b) 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 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.
(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, 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;
and
(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;
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, and even though that election
of remedies by Administrative Agent
2
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 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 in any modification thereof, (iii) any
discharge or release of Borrower or any other guarantor from any
liability with respect to the 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. Without limiting the
generality of the foregoing, Guarantor hereby agrees that
Guarantor’s liability shall continue even if Administrative
Agent or any Lender alters any obligations under the Loan Documents
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 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 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 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. 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.
K
(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
3
enforceability of the Loan Documents 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, at law, in equity or
otherwise. Guarantor hereby agrees that Guarantor shall be liable
even if Borrower had no liability at the time of execution of any
of the Loan Documents or thereafter ceases to be liable, and
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 (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 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, 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 and
that the exercise of any of the aforesaid
