Exhibit 10.4
THIS RESTATED GUARANTY AGREEMENT RESTATES IN ITS ENTIRETY THAT CERTAIN GUARANTY
AGREEMENT DATED AS OF SEPTEMBER 20, 2005, EXECUTED BY AVATAR HOLDINGS INC. IN
FAVOR OF WACHOVIA BANK, NATIONAL ASSOCIATION, AS AGENT ON BEHALF OF THE LENDERS
IDENTIFIED ON SCHEDULE A ATTACHED HERETO.
RESTATED GUARANTY AGREEMENT
     THIS RESTATED GUARANTY dated as of October 21, 2005 (together with any
amendments or modifications hereto in effect from time to time, the “Restated
Guaranty”), made by AVATAR HOLDINGS INC., a Delaware corporation, having an
address at 201 Alhambra Circle, 12th Floor, Coral Gables, Florida 33134
(“Guarantor”), in favor of the lending institution(s) identified on Schedule A
attached hereto and made a part hereof and such other lending institutions which
may become parties hereto pursuant to the “Credit Agreement (as hereinafter
defined) (individually, a “Lender” and collectively, the “Lenders”) and WACHOVIA
BANK, NATIONAL ASSOCIATION, having an office at 200 East Broward Boulevard,
Suite 200, Fort Lauderdale, Florida 33301 (“Agent”).
     WHEREAS, Guarantor entered into that certain Guaranty Agreement dated as of
September 20, 2005 (“Guaranty Agreement”) to induce Lenders to make loans,
extensions of credit or other financial accommodations pursuant to the Credit
Agreement dated as of even date herewith to AVATAR PROPERTIES INC., a Florida
corporation (“Borrower”) (the “Credit Agreement”) and to secure the observance,
payment and performance of the “Liabilities” (as defined below), and with full
knowledge that Lenders would not make the said loans, extensions of credit or
financial accommodations without such Guaranty Agreement, which shall be
construed as a contract of suretyship;
     WHEREAS, Guarantor desires to amend and restate the Guaranty Agreement to
include the guarantee of full, prompt and unconditional performance of each term
and condition to be performed by Borrower under the additional Notes evidencing
a Facility Increase (as such term is defined in the Credit Agreement) in the
aggregate amount of Twenty Five Million Dollars ($25,000,000.00);
     NOW THEREFORE, Guarantor unconditionally agrees as follows:
1. LIABILITIES GUARANTEED.
     Guarantor hereby guarantees and becomes surety to Lenders for the full,
prompt and unconditional payment of the Liabilities, when and as the same shall
become due, whether at the stated maturity date, by acceleration or otherwise,
and the full, prompt and unconditional performance of each term and condition to
be performed by Borrower under the Notes (as herein defined) and the Credit
Agreement. This Restated Guaranty is a primary obligation of Guarantor and shall
be a continuing inexhaustible Guaranty. This is a guaranty of payment and not of
collection. Agent, in accordance with the Credit Agreement, may require
Guarantor to pay and perform its liabilities and obligations under this Restated
Guaranty and may proceed immediately against Guarantor without being required to
bring any proceeding or take any action against Borrower, any other guarantor or
any other person, entity or property prior thereto, the liability of Guarantor
hereunder being joint and several, and independent of and separate from the
liability of Borrower, any other guarantor or person, and the availability of
other collateral security for the Notes.
2. DEFINITIONS.
     2.1. “Notes” means those certain Consolidated Revolving Promissory Notes
dated as of even date herewith in the principal amounts as follows: Sixty-Eight
Million Dollars ($68,000,000) from Borrower to Wachovia Bank, National
Association; Thirty Two Million Dollars ($32,000,000) from Borrower to Guaranty
Bank; and Twenty Five Million Dollars ($25,000,000) from Borrower to

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Guaranty Bank; and Twenty Five Million Dollars ($25,000,000) from Borrower to
Franklin Bank, SSB, a Texas Savings Bank.
     2.2. “Liabilities” means, collectively: (i) the repayment of all sums due
under the Notes (and all extensions, renewals, replacements and amendments
thereof) and the other “Loan Documents” (as defined herein); (ii) the
performance of all terms, conditions and covenants set forth in the Loan
Documents, including the Obligations, as defined in the Credit Agreement;
(iii) the repayment of all sums due or that may become due under or in
connection with any present or future swap agreements (as defined in 11 U.S.C.
§101) between Borrower and Agent (or any of Agent’s affiliates); (iv) the
repayment of all reimbursement obligations due or that may become due under or
in connection with any present or future letters of credit for the account of
Borrower in accordance with and pursuant to the Credit Agreement; and (v) all
other obligations or indebtedness of Borrower to Lenders incurred in connection
with the Credit Agreement, including without limitation, principal, interest,
fees, late charges and expenses, including attorneys’ fees.
     2.3. “Loan Documents” shall have the meaning set forth in the Credit
Agreement. The terms of the Loan Documents are hereby made a part of this
Restated Guaranty to the same extent and with the same effect as if fully set
forth herein.
     2.4 All capitalized terms not otherwise defined herein shall have the
meaning ascribed to them in the Loan Documents.
3. REPRESENTATION AND WARRANTIES. Guarantor represents and warrants to Lenders
as follows:
     3.1. Organization, Powers. Guarantor (i) is a Delaware corporation, duly
organized, validly existing and in good standing under the laws of the state of
its organization, and is authorized to do business in each other jurisdiction
wherein its ownership of property or conduct of business legally requires such
authorization; (ii) has the power and authority to own its properties and assets
and to carry on its business as now being conducted and as now contemplated; and
(iii) has the power and authority to execute, deliver and perform, and by all
necessary action has authorized the execution, delivery and performance of, all
of its obligations under this Restated Guaranty and any other Loan Document to
which it is a party.
     3.2. Execution of Restated Guaranty. This Restated Guaranty and each other
Loan Document to which Guarantor is a party have been duly executed and
delivered by Guarantor. Execution, delivery and performance of this Restated
Guaranty and each other Loan Document to which Guarantor is a party will not:
(i) violate any of its organizational documents, provision of law, order of any
court, agency or instrumentality of government, or any provision of any
indenture, agreement or other instrument to which it is a party or by which it
or any of its properties is bound; (ii) result in the creation or imposition of
any lien, charge or encumbrance of any nature, other than the liens created by
the Loan Documents; and (iii) require any authorization, consent, approval,
license, exemption of, or filing or registration with, any court or governmental
authority.
     3.3. Obligations of Guarantor. This Restated Guaranty and each other Loan
Document to which Guarantor is a party are the legal, valid and binding
obligations of Guarantor, enforceable against it in accordance with their terms,
except as the same may be limited by bankruptcy, insolvency, reorganization or
other laws or equitable principles relating to or affecting the enforcement of
creditors’ rights generally. The loans or credit accommodations made by Lenders
to Borrower and the assumption by Guarantor of its obligations hereunder and
under any other Loan Document to which Guarantor is a party will result in
material benefits to Guarantor. This Restated Guaranty was entered into by
Guarantor for commercial purposes.
     3.4. Litigation. There is no action, suit, or proceeding at law or in
equity or by or before any governmental authority, agency or other
instrumentality now pending or, to the knowledge of Guarantor,

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threatened against or affecting Guarantor or any of its properties or rights
which, if adversely determined, would materially impair and adversely affect:
(i) the value of any collateral securing the Liabilities; (ii) Guarantor’s right
to carry on its business substantially as now conducted (and as now
contemplated); (iii) its financial condition; or (iv) its capacity to consummate
and perform its obligations under this Restated Guaranty or any other Loan
Document to which Guarantor is a party.
     3.5. No Defaults. Guarantor is not in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained herein or in any material agreement or instrument to which it is a
party or by which it or any of its properties is bound.
     3.6. No Untrue Statements. No Loan Document or other document, certificate
or statement furnished to Lenders by or on behalf of Guarantor contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained herein and therein not misleading.
Guarantor acknowledges that all such statements, representations and warranties
shall be deemed to have been relied upon by Lenders as an inducement to extend
credit to Borrower pursuant to the Credit Agreement (collectively, “Loan”).
4. NO LIMITATION OF LIABILITY.
     4.1. Without incurring responsibility to Guarantor, and without impairing
or releasing the obligations of Guarantor to Lenders, and without reducing the
amount due under the terms of this Restated Guaranty, Agent may at any time and
from time to time, without the consent of or notice to Guarantor, upon any terms
or conditions, and in whole or in part:
          4.1.1. Change the manner, place or terms of payment of (including,
without limitation, the interest rate and monthly payment amount), and/or change
or extend the time for payment of, or renew or modify, any of the Liabilities,
or any of the Loan Documents evidencing same, and the Restated Guaranty herein
made shall apply to the Liabilities and the Loan Documents as so changed,
extended, renewed or modified;
          4.1.2. Exercise or refrain from exercising any rights against Borrower
or other obligated parties (including Guarantor);
          4.1.3. Settle or compromise any Liabilities, whether in a proceeding
or not, and whether voluntarily or involuntarily, and subordinate the payment of
any of the Liabilities, whether or not due, to the payment of liabilities owing
to creditors of Borrower other than Lenders and Guarantor;
          4.1.4. Apply any sums it receives, by whomever paid or however
realized, to any of the Liabilities;
          4.1.5. Add, release, settle, modify or discharge the obligation of any
maker, endorser, guarantor, surety, obligor or any other party who is in any way
obligated for any of the Liabilities;
          4.1.6. Accept security for the Liabilities; and/or
          4.1.7. Take any other action which might constitute a defense
available to, or a discharge of, Borrower or any other obligated party
(including Guarantor) in respect of the Liabilities.
     4.2. The invalidity, irregularity or unenforceability of all or any part of
the Liabilities or any Loan Document, or the impairment or loss of any security
therefor, whether caused by any action or inaction of Agent, or otherwise, shall
not affect, impair or be a defense to Guarantor’s obligations under this
Restated Guaranty.
5. LIMITATION ON SUBROGATION. Until such time as the Liabilities are
indefeasibly paid in full in cash, Guarantor waives any present or future right
to which Guarantor is or may become entitled to be subrogated to Lenders’ rights
against Borrower or to seek contribution, reimbursement, indemnification,

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payment or the like, or participation in any claim, right or remedy of Lenders
against Borrower or any security which Lenders may hereafter acquire, whether or
not such claim, right or remedy arises under contract, in equity, by statute,
under common law or otherwise. If, notwithstanding such waiver, any funds or
property shall be paid or transferred to Guarantor on account of such
subrogation, contribution, reimbursement, or indemnification at any time when
all of the Liabilities have not been paid in full, Guarantor shall hold such
funds or property in trust for Lenders and shall forthwith pay over to Agent
such funds and/or property to be applied by Agent to the Liabilities.
6. COVENANTS.
     6.1. Financial Covenants.
     Guarantor shall maintain the financial covenants set forth in the Credit
Agreement (“Financial Covenants”) during the term of the Notes, compliance of
which shall be determined on the basis of the “Financial Reporting” (as
hereinafter defined) and other information to be provided to Agent by Guarantor
required by the Credit Agreement or the other Loan Documents. Except as may be
specifically provided otherwise in the Credit Agreement, review of the Financial
Covenants shall be tested quarterly during the term of the Notes, within
forty-five (45) days of each quarter end and within one hundred twenty
(120) days of each fiscal year end, subject to Agent’s receipt of the Financial
Reporting on a timely basis.
     6.2. Financial Statements; Compliance Certificate.
          6.2.1. Guarantor shall furnish to Agent the following financial
information, in each instance prepared in accordance with generally accepted
accounting principles consistently applied (collectively, “Financial
Reporting”):
               (a) Not later than 45 days after the end of each fiscal quarter,
management prepared financial statements (10-Q) for Guarantor including, without
limitation, statements of financial condition, income and cash flows, a
reconciliation of net worth, a listing of all contingent liabilities (other than
in the ordinary course of business to purchase materials, supplies, or other
properties from, or to obtain the services of, another Person, pursuant to a
contract or related document), notes to financial statements, and any other
information requested by Agent. An audited financial statement (10-K) for
Guarantor shall be presented to Agent not later than 120 days after end of each
fiscal year.
               (b) Not later than 30 days after filing with the Internal Revenue
Service, if requested by Agent, a true and complete copy of the federal tax
returns (with corresponding K-1’s), including all applicable schedules and tax
return extensions, of Guarantor.
               (c) Such other information respecting the operations of Guarantor
as Agent may from time to time reasonably request, including, but not limited
to, any information required of Guarantor pursuant to the terms of the Credit
Agreement.
          6.2.2. Guarantor shall furnish to Agent, with all Financial Reporting
and with each set of financial statements described herein, a compliance
certificate signed by Guarantor’s chief financial officer certifying that:
(i) all representations and warranties of Guarantor set forth in this Restated
Guaranty or any other Loan Document remain true and correct; (ii) none of the
covenants of Guarantor contained in this Restated Guaranty or any other Loan
Document have been breached; and (iii) to its knowledge, no event has occurred
which, with the giving of notice or the passage of time, or both, would
constitute an Event of Default under this Restated Guaranty or any other Loan
Document. In addition, Guarantor shall promptly notify Agent of the occurrence
of any default, Event of Default, adverse litigation or material adverse change
in its financial condition.
     6.3. Subordination of Other Debts. Guarantor agrees: (a) to subordinate the
obligations now or hereafter owed by Borrower to Guarantor (“Subordinated Debt”)
to any and all obligations of Borrower to Lenders now or hereafter existing
while this Restated Guaranty is in effect, provided however that Guarantor may
receive regularly scheduled principal and interest payments on the Subordinated
Debt

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so long as (i) all sums due and payable by Borrower to Lenders have been paid in
full on or prior to such date, and (ii) no event which is or, with the passage
of time or giving of notice or both, could become an Event of Default shall have
occurred and be continuing; (b) Guarantor will either place a legend indicating
such subordination on every note, ledger page or other document evidencing any
part of the Subordinated Debt or deliver such documents to Agent; and (c) except
as permitted by this paragraph, Guarantor will not request or accept payment of
or any security for any part of the Subordinated Debt, and any proceeds of the
Subordinated Debt paid to Guarantor, through error or otherwise, shall
immediately be forwarded to Agent by Guarantor, properly endorsed to the order
of Lenders as their interests appear, to apply to the Liabilities.
7. EVENTS OF DEFAULT.
     Each of the following shall constitute a default (each, an “Event of
Default”) hereunder:
     7.1. Non-payment when due of any sum required to be paid to Lenders under
any of the Loan Documents or of any of the other Liabilities after the
expiration of any applicable grace period, if any;
     7.2. A breach by Guarantor of any other material term, covenant, condition,
obligation or agreement under this Restated Guaranty, and the continuance of
such breach for a period of fifteen (15) days after written notice thereof shall
have been given to Guarantor;
     7.3. Any material representation or warranty made by Guarantor in this
Restated Guaranty shall prove to be false, incorrect or misleading in any
material respect as of the date when made; or
     7.4. An “Event of Default” (as defined in the Credit Agreement) under any
of the Loan Documents.
8. REMEDIES.
     8.1. Upon an Event of Default, all liabilities of Guarantor hereunder shall
become immediately due and payable without demand or notice and, in addition to
any other remedies provided by law, Agent may:
          8.1.1. Enforce the obligations of Guarantor under this Restated
Guaranty.
          8.1.2. Perform any covenant or agreement of Guarantor in default
hereunder (but without obligation to do so) and in that regard pay such money as
may be required or as Agent may reasonably deem expedient. Any costs, expenses
or fees, including reasonable attorneys’ fees and costs, incurred by Agent in
connection with the foregoing shall be included in the Liabilities guaranteed
hereby, and shall be due and payable on demand, together with interest at the
“Default Rate” (as defined and described in the Note), such interest to be
calculated from the date of such advance to the date of repayment thereof. Any
such action by Agent shall not be deemed to be a waiver or release of Guarantor
hereunder and shall be without prejudice to any other right or remedy of Agent.
     8.2. Settlement of any claim by Agent against Borrower, whether in any
proceeding or not, and whether voluntary or involuntary, shall not reduce the
amount due under the terms of this Restated Guaranty, except to the extent of
the amount actually paid by Borrower or any other obligated party and legally
retained by Agent in connection with the settlement (unless otherwise provided
for herein).
9. MISCELLANEOUS.
     9.1. Disclosure of Financial Information. Agent is hereby authorized to
disclose any financial or other information about Guarantor to all other Lenders
and to any regulatory body or agency having jurisdiction over any Lender or to
any present, future or prospective Lender or successor in interest. The
information provided may include, without limitation, amounts, terms, balances,
payment history, return item history and any financial or other information
about Guarantor.

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     9.2. Remedies Cumulative. The rights and remedies of Agent, as provided
herein and in any other Loan Document, shall be cumulative and concurrent, may
be pursued separately, successively or together, may be exercised as often as
occasion therefor shall arise, and shall be in addition to any other rights or
remedies conferred upon Agent at law or in equity. The failure, at any one or
more times, of Agent to exercise any such right or remedy shall in no event be
construed as a waiver or release thereof. Agent shall have the right to take any
action it deems appropriate without the necessity of resorting to any collateral
securing this Restated Guaranty, if any.
     9.3. Integration. This Restated Guaranty and the other Loan Documents
constitute the sole agreement of the parties with respect to the transaction
contemplated hereby and supersede all oral negotiations and prior writings with
respect thereto, including the Guaranty Agreement dated as of September 20, 2005
executed by Guarantor in favor of Agent.
     9.4. Attorneys’ Fees and Expenses. If Agent retains the services of counsel
by reason of a claim of a default or an Event of Default hereunder or under any
of the other Loan Documents, or on account of any matter involving this Restated
Guaranty, or for examination of matters subject to Agent’s approval under this
Restated Guaranty or the other Loan Documents, all costs of suit and all
reasonable attorneys’ fees and such other reasonable expenses so incurred by
Agent shall forthwith, on demand, become due and payable and shall be secured
hereby.
     9.5. No Implied Waiver. Neither Agent, Lenders nor Guarantor shall be
deemed to have modified or waived any of its rights or remedies hereunder unless
such modification or waiver is in writing and signed by Agent, Lenders or
Guarantor (as the case may be), and then only to the extent specifically set
forth therein. A waiver in one event shall not be construed as continuing or as
a waiver of or bar to such right or remedy on a subsequent event.
     9.6. Waiver. Guarantor waives notice of acceptance of this Restated
Guaranty and notice of the Liabilities and waives notice of default,
non-payment, partial payment, presentment, demand, protest, notice of protest or
dishonor, and all other notices to which Guarantor might otherwise be entitled
or which might be required by law to be given by Agent or Lenders. Guarantor
waives the right to marshalling of Borrower’s assets or any stay of execution
and the benefit of all exemption laws, to the extent permitted by law, and any
other protection granted by law to guarantors, now or hereafter in effect with
respect to any action or proceeding brought by Agent against it. Guarantor
irrevocably waives all claims of waiver, release, surrender, alteration or
compromise and the right to assert against Agent and Lenders any defenses,
set-offs, counterclaims, or claims that Guarantor may have at any time against
Agent, Lenders or any other party liable to Agent or Lenders.
     9.7. No Third Party Beneficiary. Except as otherwise provided herein,
Guarantor, Agent and Lenders do not intend the benefits of this Restated
Guaranty to inure to any third party and no third party (including Borrower)
shall have any status, right or entitlement under this Restated Guaranty.
     9.8. Partial Invalidity. The invalidity or unenforceability of any one or
more provisions of this Restated Guaranty shall not render any other provision
invalid or unenforceable. In lieu of any invalid or unenforceable provision,
there shall be added automatically a valid and enforceable provision as similar
in terms to such invalid or unenforceable provision as may be possible.
     9.9. Binding Effect. The covenants, conditions, waivers, releases and
agreements contained in this Restated Guaranty shall bind, and the benefits
thereof shall inure to, the parties hereto and their respective heirs,
executors, administrators, successors and assigns; provided, however, that this
Restated Guaranty cannot be assigned by Guarantor without the prior written
consent of Agent, and any such assignment or attempted assignment by Guarantor
shall be void and of no effect with respect to the Agent and Lenders.

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     9.10. Modifications. This Restated Guaranty may not be supplemented,
extended, modified or terminated except by an agreement in writing signed by the
party against whom enforcement of any waiver, change, modification or discharge
is sought.
     9.11. Sales or Participations. Each Lender, may from time to time sell or
assign, in whole or in part, or grant participations in the Loan, the Note
and/or the obligations evidenced thereby. The holder of any such sale,
assignment or participation, if the applicable agreement between the applicable
lender and such holder so provides shall be: (a) entitled to all of the rights,
obligations and benefits of the applicable Lender; and (b) deemed to hold and
may exercise the rights of setoff or banker’s lien with respect to any and all
obligations of such holder to Guarantor, in each case as fully as though
Guarantor were directly indebted to such holder. The applicable Lender shall
give written notice to Guarantor of such sale, assignment or participation;
however, the failure to give such notice shall not affect any of such Lender’s
or such holder’s rights hereunder.
     9.12. Jurisdiction. Guarantor agrees that it may be served by regular or
certified mail at the address set forth below, any notice, process or pleading
in any action or proceeding against it arising out of or in connection with this
Restated Guaranty or any other Loan Document; and Guarantor hereby consents that
any action or proceeding against it be commenced and maintained in a court of
appropriate jurisdiction in Miami-Dade or Broward Counties, Florida, subject to
removal to a particular County in which the applicable real estate collateral is
located in the event of a foreclosure proceeding by service of process on
Guarantor; and Guarantor agrees that the courts of such State shall have
jurisdiction with respect to the subject matter hereof and the person of
Guarantor and all collateral securing the obligations of Guarantor. Guarantor
agrees not to assert any defense to any action or proceeding initiated by Agent
based upon improper venue or inconvenient forum.
     9.13. Notices. All notices and communications under this Restated Guaranty
shall be in writing and shall be delivered in accordance with Section 11 of the
Credit Agreement.
     9.14. Governing Law. This Restated Guaranty shall be governed by and
construed in accordance with the substantive laws of the State of Florida, which
venue will be Broward or Miami-Dade County, Florida, without reference to
conflict of laws principles.
     9.15. Joint and Several Liability. If Guarantor consists of more than one
person or entity, the word “Guarantor” shall mean each of them and their
liability shall be joint and several. The liability of Guarantor shall also be
joint and several with the liability of any other guarantor under any other
guaranty.
     9.16. Continuing Enforcement. If, after receipt of any payment of all or
any part of the Liabilities, Agent is compelled or agrees, for settlement
purposes, to surrender such payment to any person or entity for any reason
(including, without limitation, a determination that such payment is void or
voidable as a preference or fraudulent conveyance, an impermissible setoff, or a
diversion of trust funds), then this Restated Guaranty shall continue in full
force and effect or be reinstated, as the case may be, and Guarantor shall be
liable for, and shall indemnify, defend and hold harmless Agent and Lenders with
respect to the full amount so surrendered. The provisions of this Section shall
survive the termination of this Restated Guaranty and shall remain effective
notwithstanding the payment of the Liabilities, the cancellation of the Note,
this Restated Guaranty or any other Loan Document, the release of any security
interest, lien or encumbrance securing the Liabilities, if any, or any other
action which Agent may have taken in reliance upon its receipt of such payment.
Any cancellation, release or other such action shall be deemed to have been
conditioned upon any payment of the Liabilities having become final and
irrevocable.
     9.17. Waiver of Jury Trial. GUARANTOR AGREES THAT, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR
COUNTERCLAIM, BROUGHT BY GUARANTOR ON OR WITH RESPECT TO THIS RESTATED GUARANTY,
THE CREDIT AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE DEALINGS

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OF THE PARTIES WITH RESPECT HERETO OR THERETO, SHALL BE TRIED ONLY BY A COURT
AND NOT BY A JURY. GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND
INTELLIGENTLY, AND WITH THE ADVICE OF COUNSEL, WAIVES, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR
PROCEEDING. FURTHER, GUARANTOR WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER,
IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE,
CONSEQUENTIAL OR OTHER DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES.
GUARANTOR ACKNOWLEDGES AND AGREES THAT THIS SECTION IS A SPECIFIC AND MATERIAL
ASPECT OF THIS RESTATED GUARANTY AND THAT LENDERS WOULD NOT EXTEND CREDIT TO
BORROWER IF THE WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS
RESTATED GUARANTY.
     9.18. Fraudulent Transfer. In the event any payment by Borrower or any
other person to Agent or Lenders is held to constitute a preference, fraudulent
transfer or other voidable payment under any Bankruptcy, insolvency or similar
law, or if for any other reason Agent or Lenders are required to refund such
payment or pay the amount thereof to any other party, such payment by Borrower
or any other party to Agent or Lenders shall not constitute a release of
Guarantor from any liability hereunder, and this Restated Guaranty shall
continue to be effective or shall be reinstated (notwithstanding any prior
release, surrender or discharge by Agent or Lenders of this Restated Guaranty or
of Guarantor), as the case may be, with respect to, and this Restated Guaranty
shall apply to, any and all amounts so refunded by Agent or Lenders or paid by
Agent or Lenders to another person (which amounts shall constitute part of the
Liabilities of Borrower), and any interest paid by Agent or Lenders and any
attorneys’ fees, costs and expenses paid or incurred by Agent or Lenders in
connection with any such event. It is the intent of Guarantor, Agent and Lenders
that the obligations and liabilities of Guarantor hereunder are absolute and
unconditional under any and all circumstances and that until the Liabilities of
Borrower are fully and finally paid and performed, and not subject to refund or
disgorgement, the obligations and liabilities of Guarantor hereunder shall not
be discharged or released, in whole or in part, by any act or occurrence that
might, but for the provisions of this Restated Guaranty, be deemed a legal or
equitable discharge or release of a guarantor. Notwithstanding anything in this
Restated Guaranty to the contrary, Liabilities under this Restated Guaranty
shall not exceed any amount that would cause this Restated Guaranty to be void,
invalid or unenforceable or subordinated to the claims of any other creditors
pursuant to any fraudulent transfer or conveyance laws or any bankruptcy or
other laws affecting the rights of creditors generally.
     9.19 Credit Agreement. Guarantor unconditionally guarantees to Agent and
Lenders the timely performance of all obligations of Borrower under the terms
and provisions of the Credit Agreement.
     9.20. Adequate and Sufficient Consideration. Guarantor hereby acknowledges
and agrees that it is solvent, it is receiving equivalent value in return for
guaranteeing the Liabilities of Borrower, and this Restated Guaranty does not
violate any lending restrictions imposed upon Guarantor by a third party.
[SIGNATURE PAGES TO FOLLOW]

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     IN WITNESS WHEREOF, Guarantor, intending to be legally bound, has duly
executed and delivered this Restated Guaranty Agreement as of the day and year
first above written.

                  GUARANTOR:
 
                AVATAR HOLDINGS INC.,     a Delaware corporation
 
           
/s/ Marlene Diaz
  By:   /s/ Dennis Getman    
 
     
 
   
Signature
      Dennis J. Getman    
 
      Executive Vice President    
Printed Name: Marlene Diaz
           
 
           
/s/ Karen Crew
           
 
Signature
           
 
           
Printed Name: Karen Crew
           

             
STATE OF FLORIDA
    )      
 
          ) SS:    
COUNTY OF Miami-Dade
    )      

     I HEREBY CERTIFY that on this day, before me, an officer duly authorized in
the State aforesaid and in the County aforesaid to take acknowledgments, the
foregoing instrument was acknowledged before me by DENNIS J. GETMAN, as the
Executive Vice President of AVATAR HOLDINGS INC., a Delaware corporation, freely
and voluntarily under authority duly vested in him by said corporation. He is
personally known to me or who has produced a drivers’ license as identification.
     WITNESS my hand and official seal in the County and State last aforesaid
this 21st day of October, 2005.

         
 
  /s/ Marlene Diaz    
 
 
 
Notary Public    
 
       
 
  Marlene Diaz    
 
       
 
    Typed, printed or stamped name of Notary Public    

My Commission Expires:

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SCHEDULE A
List of Lenders
Effective September 20, 2005
Wachovia Bank, National Association
Guaranty Bank
Franklin Bank, SSB, a Texas Savings Bank

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