Exhibit 10.2

CONTINUING GUARANTY

CONTINUING GUARANTY (as amended, modified, restated and/or supplemented from
time to time, this “Guaranty”), dated as of September 16, 2010 made by and among
each of the undersigned guarantors (each, a “Guarantor” and collectively, the
“Guarantors”) in favor of BANK OF AMERICA, N.A., as Administrative Agent (in
such capacity, together with any successor administrative agent, the
“Administrative Agent”), for the benefit of the Secured Parties. Except as
otherwise defined herein, all capitalized terms used herein and defined in the
Credit Agreement (as defined below) shall be used herein as therein defined.

W I T N E S S E T H :

WHEREAS, Colony Financial, Inc., a Maryland corporation (the “REIT”), the
Subsidiaries of the REIT from time to time party thereto as co-borrowers
(together with the REIT, each a “Borrower” and collectively the “Borrowers”),
the lenders from time to time party thereto (the “Lenders”) and the
Administrative Agent have entered into a Credit Agreement, dated as of the date
hereof (as amended, modified, restated and/or supplemented from time to time,
the “Credit Agreement”), providing for the making of Loans to the Borrowers, all
as contemplated therein.

WHEREAS, each Guarantor is a direct or indirect Subsidiary of the REIT.

WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the making of Loans to the Borrowers thereunder that each
Guarantor shall have executed and delivered this Guaranty to the Administrative
Agent.

WHEREAS, each Guarantor will obtain benefits from the incurrence of Loans by the
Borrowers under the Credit Agreement and, accordingly, desires to execute this
Guaranty in order to satisfy the condition described in the preceding paragraph
and to induce the Lenders to make Loans to the Borrowers.

NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to
each Guarantor, the receipt and sufficiency of which are hereby acknowledged,
each Guarantor hereby makes the following representations and warranties to the
Administrative Agent for the benefit of the Secured Parties and hereby covenants
and agrees with each other Guarantor and the Administrative Agent for the
benefit of the Secured Parties as follows:

1. Guaranty. Each Guarantor, jointly and severally with the other Guarantors,
hereby absolutely and unconditionally guarantees, as a guaranty of payment and
performance and not as a guaranty of collection, prompt payment when due,
whether at stated maturity, by required prepayment, upon acceleration, demand or
otherwise, and at all times thereafter, of all of the Obligations, including
without limitation (i) the principal of, premium, if any, and interest on the
Notes issued by, and the Loans made to, the Borrowers under the Credit
Agreement, (ii) all renewals, extensions, amendments, refinancings and other
modifications thereof, (iii) all out-of-pocket expenses incurred by any Secured
Party (including the fees, charges and disbursements of any counsel for any
Secured Party) in connection with the collection or enforcement thereof, and
whether recovery upon such Obligations may be or hereafter become unenforceable
or shall

 

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be an allowed or disallowed claim under any proceeding or case commenced by or
against any Borrower or any other Loan Party under the Bankruptcy Code (Title
11, United States Code), any successor statute or any other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally
(collectively, “Debtor Relief Laws”), and including interest that accrues after
the commencement by or against any Borrower or any other Loan Party of any
proceeding under any Debtor Relief Laws and (iv) all indebtedness, liabilities,
duties, indemnities and obligations of any Loan Party owing to Bank of America
or any Affiliate of Bank of America in connection with or relating to any
Borrowing Base Account maintained by such Loan Party at Bank of America or such
Affiliate, including, without limitation, those arising under all instruments,
agreements or other documents executed in connection therewith or relating
thereto (collectively, the “Guaranteed Obligations”). The books and records of
the Administrative Agent or the Secured Parties showing the amount of the
Guaranteed Obligations shall be admissible in evidence in any action or
proceeding, and shall absent manifest error be binding upon the Guarantors and
conclusive for the purpose of establishing the amount of the Guaranteed
Obligations. This Guaranty shall not be affected by the genuineness, validity,
regularity or enforceability of the Guaranteed Obligations or any instrument or
agreement evidencing any Guaranteed Obligations, or by the existence, validity,
enforceability, perfection, non-perfection or extent of any collateral therefor,
or by any fact or circumstance relating to the Guaranteed Obligations which
might otherwise constitute a defense to the obligations of any Guarantor under
this Guaranty, and each Guarantor hereby irrevocably waives any defenses it may
now have or hereafter acquire in any way relating to any or all of the
foregoing.

Anything contained in this Guaranty to the contrary notwithstanding, it is the
intention of each Guarantor and the Secured Parties that the obligations of each
Guarantor hereunder at any time shall be limited to an aggregate amount equal to
the largest amount that would not render its obligations hereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of the
Bankruptcy Code (Title 11, United States Code) or any comparable provisions of
any similar federal or state law. To that end, but only in the event and to the
extent that after giving effect to Section 20 of this Guaranty, such Guarantor’s
obligations with respect to the Guaranteed Obligations or any payment made
pursuant to such Guaranteed Obligations would, but for the operation of the
first sentence of this paragraph, be subject to avoidance or recovery in any
such proceeding under applicable Debtor Relief Laws after giving effect to
Section 20 of this Guaranty, the amount of such Guarantor’s obligations with
respect to the Guaranteed Obligations shall be limited to the largest amount
which, after giving effect thereto, would not, under applicable Debtor Relief
Laws, render such Guarantor’s obligations with respect to the Guaranteed
Obligations unenforceable or avoidable or otherwise subject to recovery under
applicable Debtor Relief Laws. To the extent any payment actually made pursuant
to the Guaranteed Obligations exceeds the limitation of the first sentence of
this paragraph and is otherwise subject to avoidance and recovery in any such
proceeding under applicable Debtor Relief Laws, the amount subject to avoidance
shall in all events be limited to the amount by which such actual payment
exceeds such limitation, and the Guaranteed Obligations as limited by the first
sentence of this paragraph shall in all events remain in full force and effect
and be fully enforceable against such Guarantor. The first sentence of this
paragraph is intended solely to preserve the rights of the Secured Parties
hereunder against such Guarantor in such proceeding to the maximum extent
permitted by applicable Debtor Relief Laws and neither such Guarantor, any
Borrower, any other Guarantor nor any other Person shall have any right or claim
under such sentence that would not otherwise be available under applicable
Debtor Relief Laws in such proceeding.

 

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2. No Setoff or Deductions; Taxes; Payments. Each Guarantor shall make all
payments hereunder without setoff or counterclaim and free and clear of and
without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless such Guarantor
is compelled by law to make such deduction or withholding. If any such
obligation (other than one arising with respect to Excluded Taxes) is imposed
upon a Guarantor with respect to any amount payable by it hereunder, such
Guarantor will pay to the Administrative Agent for the benefit of the Secured
Parties for application to the Guaranteed Obligations in accordance with the
terms of the Loan Documents or, if the Loan Documents do not provide for the
application of such amount, to be held by the Administrative Agent as collateral
security for any Guaranteed Obligations thereafter existing, on the date on
which such amount is due and payable hereunder, such additional amount in U.S.
dollars as shall be necessary to enable the Secured Parties to receive the same
net amount which the Secured Parties would have received on such due date had no
such obligation been imposed upon such Guarantor. Each Guarantor will deliver
promptly to the Secured Parties certificates or other valid vouchers for all
taxes or other charges deducted from or paid with respect to payments made by
such Guarantor hereunder. The obligations of the Guarantors under this paragraph
shall survive the payment in full of the Guaranteed Obligations and termination
of this Guaranty. The obligations hereunder shall not be affected by any acts of
any Governmental Authority affecting any Guarantor or any other Loan Party,
including but not limited to, any restrictions on the conversion of currency or
repatriation or control of funds or any total or partial expropriation of any
Guarantor’s or any other Loan Party’s property, or by economic, political,
regulatory or other events in the countries where any Guarantor or any other
Loan Party is located.

3. Rights of Secured Parties. Each Guarantor consents and agrees that the
Secured Parties may, at any time and from time to time, without notice or
demand, and without affecting the enforceability or continuing effectiveness
hereof: (a) amend, extend, renew, compromise, discharge, accelerate or otherwise
change the times for payment or the terms of the Guaranteed Obligations or any
part thereof; (b) take, hold, exchange, enforce, waive, release, fail to
perfect, sell, or otherwise dispose of any security for the payment of this
Guaranty or any Guaranteed Obligations; (c) apply such security and direct the
order or manner of sale thereof as the Secured Parties in its sole discretion
may determine; and (d) release or substitute one or more of any endorsers or
other guarantors of any of the Guaranteed Obligations. Without limiting the
generality of the foregoing, each Guarantor consents to the taking of, or
failure to take, any action which might in any manner or to any extent vary the
risks of the Guarantors under this Guaranty or which, but for this provision,
might operate as a discharge of one or more of the Guarantors.

 

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4. Certain Waivers. Each Guarantor waives (a) any defense arising by reason of
any disability or other defense of a Borrower, any other Loan Party or any other
guarantor of the Guaranteed Obligations or any part thereof, or the cessation
from any cause whatsoever (including any act or omission of any Secured Party)
of the liability of the Borrowers; (b) any defense based on any claim that such
Guarantor’s obligations exceed or are more burdensome than those of the
Borrowers; (c) the benefit of any statute of limitations affecting such
Guarantor’s liability hereunder; (d) any right to require any Secured Party to
proceed against a Borrower or any other Loan Party, proceed against or exhaust
any security for any of the Guaranteed Obligations, or pursue any other remedy
in the power of any Secured Party; (e) any benefit of and any right to
participate in any security now or hereafter held by any Secured Party; and
(f) to the full extent permitted by law, any and all other defenses or benefits
that may be derived from or afforded by applicable law limiting the liability of
or exonerating guarantors or sureties. Each Guarantor expressly waives all
setoffs and counterclaims and all presentments, demands for payment or
performance, notices of nonpayment or nonperformance, protests, notices of
protest, notices of dishonor and all other notices or demands of any kind or
nature whatsoever with respect to the Guaranteed Obligations, and all notices of
acceptance of this Guaranty or of the existence, creation or incurrence of new
or additional Guaranteed Obligations.

5. Obligations Independent. The obligations of each Guarantor hereunder are
those of primary obligor, and not merely as surety, and are independent of the
Guaranteed Obligations and the obligations of any other guarantor of the
Guaranteed Obligations or any part thereof, and a separate action may be brought
against any Guarantor to enforce this Guaranty whether or not a Borrower or any
other Person is joined as a party. For the avoidance of doubt, all obligations
of each Guarantor under this Guaranty are joint and several obligations of all
the Guarantors.

6. Subrogation. No Guarantor shall exercise any right of subrogation,
contribution, indemnity, reimbursement or similar rights with respect to any
payments it makes under this Guaranty until all of the Guaranteed Obligations
and any amounts payable under this Guaranty have been indefeasibly paid and
performed in full in immediately available funds and all Commitments are
terminated. If any amounts are paid to any Guarantor in violation of the
foregoing limitation, then such amounts shall be held in trust by such Guarantor
for the benefit of the Secured Parties and shall forthwith be paid to the
Administrative Agent for the benefit of the Secured Parties for application to
the Guaranteed Obligations in accordance with the terms of the Loan Documents
or, if the Loan Documents do not provide for the application of such amount, to
be held by the Administrative Agent as collateral security for any Guaranteed
Obligations thereafter existing, whether matured or unmatured.

7. Termination; Reinstatement. This Guaranty is a continuing and irrevocable
guaranty of all Guaranteed Obligations now or hereafter existing and shall
remain in full force and effect until all of the Guaranteed Obligations and any
amounts payable under this Guaranty have been indefeasibly paid and performed in
full in immediately available funds and all Commitments are terminated.
Notwithstanding the foregoing, this Guaranty shall continue in full force and
effect or be revived, as the case may be, if any payment by or on behalf of a
Borrower or a Guarantor is made, or a Secured Party exercises its right of
setoff, in respect of the Guaranteed Obligations and such payment or the
proceeds of such setoff or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required

 

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(including pursuant to any settlement entered into by a Secured Party in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Laws or otherwise, all as
if such payment had not been made or such setoff had not occurred and whether or
not the Secured Parties are in possession of or have released this Guaranty and
regardless of any prior revocation, rescission, termination or reduction. The
obligations of the Guarantors under this paragraph shall survive termination of
this Guaranty.

8. Release of Liability of Guarantor Upon Sale or Dissolution. In the event that
all of the capital stock or other Equity Interests of any Guarantor is sold or
otherwise disposed of (including by way of the merger or consolidation of such
Guarantor with or into another Person) or liquidated, in any such case in
compliance with the requirements of Section 7.05 of the Credit Agreement (or
such sale, other disposition or liquidation has been approved in writing by the
Required Lenders (or all the Lenders if required by Section 10.01 of the Credit
Agreement)) and the proceeds of such sale, disposition or liquidation are
applied in accordance with the provisions of the Credit Agreement, to the extent
applicable, such Guarantor shall, upon consummation of such sale or other
disposition (except to the extent that such sale or disposition is to a Borrower
or a Subsidiary thereof), be released from this Guaranty automatically and
without further action and this Guaranty shall, as to such Guarantor, terminate,
and have no further force or effect (it being understood and agreed that the
sale of one or more Persons that own, directly or indirectly, all of the capital
stock or other Equity Interests of any Guarantor shall be deemed to be a sale of
such Guarantor for the purposes of this Section 8).

9. Stay of Acceleration. In the event that acceleration of the time for payment
of any of the Guaranteed Obligations is stayed, in connection with any case
commenced by or against a Borrower or any other Loan Party under any Debtor
Relief Laws, or otherwise, all such amounts shall nonetheless be payable by the
Guarantors who are not subject to such automatic stay immediately upon demand by
the Administrative Agent.

10. Expenses. The Guarantors shall pay on demand all reasonable out-of-pocket
expenses incurred by any Secured Party (including the fees, charges and
disbursements of any counsel for any Secured Party), and shall pay on demand all
fees and time charges for attorneys who may be employees of any Secured Party,
in any way relating to the enforcement or protection of the rights of the
Secured Parties (or any of them) under this Guaranty or in respect of the
Guaranteed Obligations, including any incurred during any “workout” or
restructuring in respect of the Guaranteed Obligations and any incurred in the
preservation, protection or enforcement of any rights of any Secured Party in
any proceeding any Debtor Relief Laws. The obligations of the Guarantors under
this paragraph shall survive the payment in full of the Guaranteed Obligations
and termination of this Guaranty.

11. Modifications; Miscellaneous. Neither this Guaranty nor any provision hereof
may be changed, waived, discharged or terminated except in a writing signed by
each Guarantor directly affected thereby (it being understood that the addition
or release of any Guarantor hereunder shall not constitute a change, waiver,
discharge or termination affecting any Guarantor other than the Guarantor so
added or released) and the Administrative Agent (with the consent of the
Required Lenders or all of the Lenders, to the extent required by Section 10.01
of the Credit Agreement). No failure by any Secured Party to exercise, and no
delay in exercising, any right, remedy or power hereunder shall operate as a
waiver thereof; nor shall any single or partial

 

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exercise of any right, remedy or power hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law or in equity. The unenforceability or invalidity of any
provision of this Guaranty shall not affect the enforceability or validity of
any other provision herein. This Guaranty is not intended to supersede or
otherwise affect any other guaranty now or hereafter given by any Guarantor for
the benefit of the Secured Parties (or any of them) or any term or provision
thereof.

12. Condition of Loan Parties. Each Guarantor acknowledges and agrees that it
has the sole responsibility for, and has adequate means of, obtaining from the
Loan Parties and any other guarantor of the Guaranteed Obligations such
information concerning the financial condition, business and operations of the
Loan Parties and any such other guarantors as such Guarantor requires, and that
no Secured Party has any duty, and no Guarantor is relying on any Secured Party
at any time, to disclose to such Guarantor any information relating to the
business, operations or financial condition of any Loan Party or any other
guarantor of the Guaranteed Obligations (such Guarantor waiving any duty on the
part of the Secured Parties to disclose such information and any defense
relating to the failure to provide the same).

13. Setoff. In addition to any rights now or hereafter granted under applicable
law (including, without limitation, Section 151 of the New York Debtor and
Creditor Law) and not by way of limitation of any such rights, upon the
occurrence and during the continuance of an Event of Default, each Lender and
each of its Affiliates is hereby authorized, at any time or from time to time,
to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by such Lender or
any such Affiliate to or for the credit or the account of any Guarantor, against
and on account of the obligations and liabilities of such Guarantor to such
Lender under this Guaranty, irrespective of whether or not such Lender shall
have made any demand hereunder and although said obligations, liabilities,
deposits or claims, or any of them, shall be contingent or unmatured or are owed
to a branch or office of such Lender different from the branch or office holding
such deposit or obligated on such indebtedness; provided, that in the event that
any Defaulting Lender shall exercise any such right of setoff, (x) all amounts
so set off shall be paid over immediately to the Administrative Agent for
further application in accordance with the provisions of Section 2.14 of the
Credit Agreement and, pending such payment, shall be segregated by such
Defaulting Lender from its other funds and deemed held in trust for the benefit
of the Administrative Agent and the Lenders, and (y) the Defaulting Lender shall
provide promptly to the Administrative Agent a statement describing in
reasonable detail the Obligations owing to such Defaulting Lender as to which it
exercised such right of setoff. The rights of each Lender and their respective
Affiliates under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender or their respective
Affiliates may have. Each Lender (by its acceptance of the benefits hereof)
acknowledges and agrees to promptly notify the REIT after any such set-off and
application; provided, that the failure to give such notice shall not affect the
validity of such set-off and application.

14. Representations and Warranties. Each Guarantor represents and warrants that
(a) it is duly organized and in good standing under the laws of the jurisdiction
of its organization and has full capacity and right to make and perform this
Guaranty, and all necessary authority has been obtained; (b) this Guaranty
constitutes its legal, valid and binding obligation

 

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enforceable in accordance with its terms; (c) the making and performance of this
Guaranty does not and will not violate the provisions of any applicable law,
regulation or order, and does not and will not result in the breach of, or
constitute a default or require any consent under, any material agreement,
instrument, or document to which it is a party or by which it or any of its
property may be bound or affected; and (d) all consents, approvals, licenses and
authorizations of, and filings and registrations with, any Governmental
Authority required under applicable law and regulations for the making and
performance of this Guaranty have been obtained or made and are in full force
and effect. In addition, each Guarantor represents and warrants that (x) until
all of the Guaranteed Obligations and any amounts payable under this Guaranty
have been indefeasibly paid and performed in full in immediately available funds
and all Commitments are terminated, such Guarantor will take, or will refrain
from taking, as the case may be, all actions that are necessary to be taken or
not taken so that no violation of any provision, covenant or agreement contained
in the Credit Agreement, and so that no Event of Default, is caused by the
actions of such Guarantor or any of its Subsidiaries; and (y) an executed (or
conformed) copy of each of the Loan Documents has been made available to a
senior officer of such Guarantor and such officer is familiar with the contents
thereof.

15. Indemnification and Survival. Without limitation on any other obligations of
any Guarantor or remedies of any Secured Party under this Guaranty, each
Guarantor shall, to the full extent permitted by law, indemnify, defend and save
and hold harmless each Secured Party from and against, and shall pay on demand,
any and all damages, losses, liabilities and expenses (including reasonable
attorneys’ fees and expenses and the allocated cost and disbursements of
internal legal counsel) that may be suffered or incurred by such Secured Party
in connection with or as a result of any failure of any Guaranteed Obligations
to be the legal, valid and binding obligations of the Borrowers enforceable
against the Borrowers in accordance with their terms. The obligations of the
Guarantors under this paragraph shall survive the payment in full of the
Guaranteed Obligations and termination of this Guaranty.

16. Guaranty Enforceable by Administrative Agent. This Guaranty may be enforced
only by the action of the Administrative Agent, in each case acting upon the
instructions of the Required Lenders (to the extent required under the Credit
Agreement) and that no other Secured Party will have any right individually to
seek to enforce or to enforce this Guaranty or to realize upon the security to
be granted by the Loan Documents, it being understood and agreed that such
rights and remedies may be exercised by the Administrative Agent, for the
benefit of the Secured Parties, upon the terms of this Guaranty and the other
Loan Documents. It is understood and agreed that the agreement in this
Section 16 is solely for the benefit of the Secured Parties.

17. Obligations of Guarantors Independent. The obligations of each Guarantor
hereunder are independent of the obligations of any other Guarantor, any other
guarantor or any Guaranteed Obligations, and a separate action or actions may be
brought and prosecuted against each Guarantor whether or not action is brought
against any other Guarantor, any Borrower or any other Person and whether or not
any other Guarantor, any Borrower or any other Person may be joined in any such
action or actions.

 

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18. Subordination of Indebtedness Held by Guarantors. Any indebtedness of any
Loan Party now or hereafter held by any Guarantor is hereby subordinated to the
prior payment in full in immediately available funds of all the Guaranteed
Obligations, and such indebtedness of any Loan Party to any Guarantor, if the
Administrative Agent, after an Event of Default has occurred and is continuing,
so requests, shall be collected, enforced and received by such Guarantor as
trustee for the Secured Parties and be paid over to the Administrative Agent for
the benefit of the Secured Parties for application to the Guaranteed Obligations
in accordance with the terms of the Loan Documents or, if the Loan Documents do
not provide for the application of such amount, to be held by the Administrative
Agent as collateral security for any Guaranteed Obligations thereafter existing,
but without affecting or impairing in any manner the liability of such Guarantor
under the other provisions of this Guaranty. Prior to the transfer by any
Guarantor of any note or negotiable instrument evidencing any indebtedness of
any Loan Party to such Guarantor, such Guarantor shall mark such note or
negotiable instrument with a legend that the same is subject to this
subordination. Without limiting the generality of the foregoing, each Guarantor
hereby agrees with the Secured Parties that it will not exercise any right of
subrogation which it may at any time otherwise have as a result of this Guaranty
(whether contractual, under Section 509 of the Bankruptcy Code or otherwise)
until all of the Guaranteed Obligations and any amounts payable under this
Guaranty have been indefeasibly paid and performed in full in immediately
available funds and all Commitments are terminated; provided, that if any amount
shall be paid to any Guarantor on account of such subrogation rights prior to
such time, such amount shall be held in trust for the benefit of the Secured
Parties and shall forthwith be paid to the Administrative Agent for the benefit
of the Secured Parties to be credited and applied to the Guaranteed Obligations,
whether matured or unmatured, in accordance with the terms of the Loan Documents
or, if the Loan Documents do not provide for the application of such amount, to
be held by the Administrative Agent as collateral security for any Guaranteed
Obligations thereafter existing. Upon the indefeasible payment in full in
immediately available funds of all of the Guaranteed Obligations and any amounts
payable under this Guaranty and the termination of all Commitments, each
Guarantor shall be subrogated to the rights of the Secured Parties to receive
payments or distributions applicable to the Guaranteed Obligations until all
Indebtedness of the Borrowers held by such Guarantor shall be paid in full.

19. Additional Guarantors. Any Subsidiary of the REIT that is required to become
a party to this Guaranty after the date hereof pursuant to the Credit Agreement
shall become a Guarantor hereunder by executing and delivering a joinder
agreement in the form attached hereto as Annex I.

20. Contribution. At any time a payment in respect of the Guaranteed Obligations
is made under this Guaranty, the right of contribution of each Guarantor against
each other Guarantor shall be determined as provided in the immediately
following sentence, with the right of contribution of each Guarantor to be
revised and restated as of each date on which a payment (a “Relevant Payment”)
is made on the Guaranteed Obligations under this Guaranty. At any time that a
Relevant Payment is made by a Guarantor that results in the aggregate payments
made by such Guarantor in respect of the Guaranteed Obligations to and including
the date of the Relevant Payment exceeding such Guarantor’s Contribution
Percentage (as defined below) of the aggregate payments made by all Guarantors
in respect of the Guaranteed Obligations to and including the date of the
Relevant Payment (such excess, the “Aggregate Excess Amount”), each such
Guarantor shall have a right of contribution against each other Guarantor who
either has not made any payments or has made payments in respect of the
Guaranteed Obligations to and including the date of the Relevant Payment in an
aggregate amount less than such other

 

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Guarantor’s Contribution Percentage of the aggregate payments made to and
including the date of the Relevant Payment by all Guarantors in respect of the
Guaranteed Obligations (the aggregate amount of such deficit, the “Aggregate
Deficit Amount”) in an amount equal to (x) a fraction the numerator of which is
the Aggregate Excess Amount of such Guarantor and the denominator of which is
the Aggregate Excess Amount of all Guarantors multiplied by (y) the Aggregate
Deficit Amount of such other Guarantor. A Guarantor’s right of contribution
pursuant to the preceding sentences shall arise at the time of each computation,
subject to adjustment at the time of each computation; provided, that no
Guarantor may take any action to enforce such right until all of the Guaranteed
Obligations and any amounts payable under this Guaranty have been indefeasibly
paid and performed in full in immediately available funds and all Commitments
are terminated, it being expressly recognized and agreed by all parties hereto
that any Guarantor’s right of contribution arising pursuant to this Section 20
against any other Guarantor shall be expressly junior and subordinate to such
other Guarantor’s obligations and liabilities in respect of the Guaranteed
Obligations and any other obligations owing under this Guaranty. As used in this
Section 20 (i) each Guarantor’s “Contribution Percentage” shall mean the
percentage obtained by dividing (x) the Adjusted Net Worth (as defined below) of
such Guarantor by (y) the aggregate Adjusted Net Worth of all Guarantors;
(ii) the “Adjusted Net Worth” of each Guarantor shall mean the greater of
(x) the Net Worth (as defined below) of such Guarantor and (y) zero; and
(iii) the “Net Worth” of each Guarantor shall mean the amount by which the fair
saleable value of such Guarantor’s assets on the date of any Relevant Payment
exceeds its existing debts and other liabilities (including contingent
liabilities, but without giving effect to any Guaranteed Obligations arising
under this Guaranty) on such date. All parties hereto recognize and agree that,
except for any right of contribution arising pursuant to this Section 20, each
Guarantor who makes any payment in respect of the Guaranteed Obligations shall
have no right of contribution or subrogation against any other Guarantor in
respect of such payment until all of the Guaranteed Obligations have been
indefeasibly paid and performed in full in cash and all Commitments are
terminated. Each of the Guarantors recognizes and acknowledges that the rights
to contribution arising hereunder shall constitute an asset in favor of the
party entitled to such contribution. In this connection, each Guarantor has the
right to waive its contribution right against any Guarantor to the extent that
after giving effect to such waiver such Guarantor would remain solvent, in the
determination of the Required Lenders.

21. Counterparts. This Guaranty may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which when
so executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Borrowers and the Administrative
Agent.

22. Headings Descriptive. The headings of the several Sections of this Guaranty
are inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Guaranty.

23. Governing Law; Assignment; Jurisdiction; Notices. This Guaranty shall be
governed by, and construed in accordance with, the internal laws of the State of
New York. This Guaranty shall (a) bind the Guarantor and its successors and
assigns, provided that no Guarantor may assign its rights or obligations under
this Guaranty (and any attempted assignment without such consent shall be void),
and (b) inure to the benefit of the Secured

 

9

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Parties and their respective successors and assigns and the Lenders may, in
accordance with Section 10.06 of the Credit Agreement and without affecting the
obligations of any Guarantor hereunder, assign, sell or grant participations in
the Guaranteed Obligations and this Guaranty, in whole or in part. Each
Guarantor hereby irrevocably (i) submits to the non-exclusive jurisdiction of
courts of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Guaranty, and (ii) waives to the fullest extent permitted by law any
defense asserting an inconvenient forum in connection therewith. Each of the
parties hereto (x) agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law, and (y) consents to the service
of process out of any of the aforementioned courts, in the manner provided in
Section 10.02 of the Credit Agreement, to (A) in the case of the Administrative
Agent, at the address provided in the Credit Agreement and (B) in the case of a
Guarantor, at its address set forth opposite its signature page below. All
notices and other communications to any Guarantor under this Guaranty shall be
in writing and delivered in the manner set forth in Section 10.02 of the Credit
Agreement. All notices and other communications shall be in writing and
addressed to such party at (i) in the case of any Secured Party, as provided in
the Credit Agreement, and (ii) in the case of any Guarantor, at its address set
forth opposite its signature below.

24. WAIVER OF JURY TRIAL; FINAL AGREEMENT. TO THE EXTENT ALLOWED BY APPLICABLE
LAW, EACH GUARANTOR AND THE ADMINISTRATIVE AGENT EACH IRREVOCABLY WAIVES TRIAL
BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING ON, ARISING OUT OF
OR RELATING TO THIS GUARANTY OR THE GUARANTEED OBLIGATIONS.

 

10

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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed and
delivered as of the date first above written.

 

Address:    

 

2450 Broadway, Sixth Floor

Santa Monica, CA 90404

Attention: Joy Mallory

Facsimile No.: (310) 407-7416

Email: JMallory@ColonyInc.com

   

COLONY FINANCIAL HOLDCO, LLC, a Delaware limited liability company

 

By: Colony Financial, Inc., its managing member

   

 

By:

 

 

/s/ Darren J. Tangen

        Name: Darren J. Tangen         Title: CFO    

COLONY FINANCIAL TRS, LLC, a Delaware limited liability company

 

By: Colony Financial, Inc., its managing member

    By:   /s/ Darren J. Tangen         Name: Darren J. Tangen         Title: CFO
   

CFI DB HOLDING, LLC, a Delaware limited liability company

 

By: CFI RE Holdco, LLC, its managing member

 

By: Colony Financial, Inc., its managing member

    By:   /s/ Darren J. Tangen         Name: Darren J. Tangen         Title: CFO

[Signature Page to Guaranty]

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CFI MBS HOLDING, LLC, a Delaware limited liability company

 

By: CFI RE Holdco, LLC, its managing member

 

By: Colony Financial, Inc., its managing member

    By:   /s/ Darren J. Tangen         Name: Darren J. Tangen         Title: CFO
   

COLFIN JIH FUNDING, LLC, a Delaware limited liability company

 

By: CFI RE Holdco, LLC, its managing member

 

By: Colony Financial, Inc., its managing member

    By:   /s/ Darren J. Tangen         Name: Darren J. Tangen         Title: CFO

Accepted and Agreed to:

 

BANK OF AMERICA, N.A., as Administrative Agent

    By:   /s/ Kathleen M. Carry     Name:   Kathleen M. Carry       Title:  
Vice President      

[Signature Page to Guaranty]

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Annex I to the

Continuing Guaranty

Form of Joinder to Continuing Guaranty

JOINDER NO. ___, dated as of _________, 20__ (this “Joinder”), to the Continuing
Guaranty dated as of September 16, 2010 (as amended, modified, restated and/or
supplemented from time to time, the “Guaranty”), made by and among the
subsidiaries of Colony Financial, Inc., a Maryland corporation (the “REIT”),
party thereto in favor of BANK OF AMERICA, N.A., as Administrative Agent (in
such capacity, together with any successor administrative agent, the
“Administrative Agent”) for the benefit of the Secured Parties.

A. Reference is made to (a) the Credit Agreement dated as of September 16, 2010
(as amended, modified, restated and/or supplemented from time to time, the
“Credit Agreement”) among the REIT, the Subsidiaries of the REIT from time to
time party thereto as co-borrowers (together with the REIT, the “Borrowers”),
the Lenders party thereto and the Administrative Agent and (b) the Guaranty.

B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Guaranty.

C. [NAME OF COLONY ENTITY] has [formed][acquired] ___________, ___________ [type
of entity](the “New Guarantor”).

D. Pursuant to the terms and provisions of the Credit Agreement, the New
Guarantor is required to become a party to the Guaranty and guaranty the
Obligations of the Borrowers. The New Guarantor is executing this Joinder in
accordance with the requirements of the Credit Agreement and Section 19 of the
Guaranty to become a party to the Guaranty.

Accordingly, the New Guarantor hereby agrees as follows:

SECTION 1. The New Guarantor below becomes a Guarantor under the Guaranty with
the same force is hereby added as a party to the Guaranty and hereby agrees to
be bound as a “Guarantor” by all of the terms, covenants and provisions set
forth in the Guaranty to the same extent it would have been bound if it had been
a signatory to the Guaranty on the date of the Guaranty. The New Guarantor
hereby makes each of the representations and warranties applicable to a
“Guarantor” contained in the Guaranty.

SECTION 2. The New Guarantor hereby represents and warrants to the
Administrative Agent and the other Secured Parties that this Joinder has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws affecting the
enforceability of creditors’ rights generally and by general principles of
equity.

SECTION 3. This Joinder may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract.

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SECTION 4. Except as expressly supplemented hereby, the Guaranty shall remain in
full force and effect.

SECTION 5. THIS JOINDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAWS.

SECTION 6. All communications and notices to be provided to the New Guarantor
hereunder or under the Guaranty shall be given to the New Guarantor at the
address set forth under its signature.

[Signature Page Follows]

 

2

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IN WITNESS WHEREOF, the New Guarantor and the Administrative Agent have duly
executed this Joinder as of the day and year first above written.

 

[NEW GUARANTOR] By:       Name:   Title: Address of New Guarantor:
[                                 ]

 

Accepted and Agreed to: BANK OF AMERICA, N.A., as Administrative Agent By:      
Name:   Title:

[Signature Page to Joinder to Guaranty]