Exhibit 10.1

 

GUARANTY AGREEMENT
(Secured Loan)

 

THIS Guaranty Agreement (this “Guaranty”) is made as of June 28, 2012, by
FORESTAR (USA) REAL ESTATE GROUP INC., a Delaware corporation (“Guarantor”) in
favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association
(“Lender”).

 

R E C I T A L S

 

A.                                   Pursuant to the terms of that certain
Construction Loan Agreement by and between FMF Peakview LLC, a Delaware limited
liability company (“Borrower”) and Lender dated of even date with this Guaranty
(the “Loan Agreement”), Lender has agreed to loan to Borrower the principal sum
of Thirty-One Million Five Hundred Fifty Thousand Two Hundred Eighty-Nine and
No/100 Dollars ($31,550,289.00) (“Loan”) for the purposes specified in the Loan
Agreement, which purposes include the construction of certain improvements
(“Improvements”) described in plans and specifications required by the Loan
Agreement (“Plans and Specifications”) upon real property described in the Loan
Agreement (collectively, the “Property”).

 

B.                                   The Loan Agreement provides that the Loan
shall be evidenced by that certain Promissory Note dated of even date with this
Guaranty, executed by Borrower payable to the order of Lender in the principal
amount of the Loan (the “Note”). The Loan is further evidenced and secured by
certain other documents described in the Loan Agreement as Loan Documents.

 

C.                                   The Note is secured by, among other things,
a Deed of Trust dated of even date with this Guaranty, executed by Borrower, as
Grantor, in favor of the Public Trustee of Arapahoe County, Colorado, for the
benefit of Lender, as Beneficiary, and recorded in the Real Property Records of
Arapahoe County, Colorado (the “Security Instrument”).

 

D.                                   The Loan Agreement, the Security
Instrument, the Note, and those other documents described in the Loan Agreement
as Loan Documents, together with all modifications, extensions, renewals and
amendments thereto, are collectively referred to hereinafter as the “Loan
Documents”.  This Guaranty is not one of the Loan Documents.

 

E.                                    Guarantor is an indirect owner of certain
equity interests in Borrower and will benefit from the Loan made by Lender to
Borrower.

 

THEREFORE, to induce Lender to enter into the Loan Agreement and to make the
Loan, and in consideration thereof, Guarantor unconditionally, absolutely and
irrevocably guarantees and agrees as follows:

 

1.                                      GUARANTY.

 

1.1.                            Repayment Guaranty.  Guarantor hereby guarantees
and promises to pay to Lender or order, on demand, in lawful money of the United
States, in immediately available funds, the aggregate outstanding principal
amount of the Loan or so much thereof as may be due and owing under the Note or
any of the other Loan Documents, together with accrued but unpaid interest not
funded from the Interest Reserve and any other sums payable under the Note or
any of the other Loan Documents (the “Repayment Guaranty”).  Notwithstanding the
foregoing, the maximum liability of Guarantor under the Repayment Guaranty shall
be limited to, (a) a sum equal to twenty-five percent (25.0%) of the aggregate
principal amount of the Loan outstanding at the earlier time of demand under
this Guaranty or bankruptcy of the Guarantor plus (b) all accrued but unpaid
interest, including interest that but for the filing of bankruptcy would have
accrued under the Note or any of the other Loan Documents, plus (c) reasonable
attorneys’ fees and all actual expenses, fees and costs of loan origination (to
the extent not already paid),

 

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maintenance and collection payable under the Note or any of the other Loan
Documents plus (d) all Operating Expenses related to the Property other than
Loan proceeds allocated for payment of Operating Expenses during the lease up of
the Property as set forth in the Construction Budget.  For the purpose of
determining the liability of Guarantor, the calculation of the aggregate
principal amount of the Loan shall not be reduced by the collateral held as
security for the Note nor by payments received nor to be received for credit to
the Loan from sources other than Borrower except as expressly set forth below.

 

For purposes of the Repayment Guaranty, the outstanding principal balance of the
Loan on any given date shall be calculated without regard to any reduction of
the Indebtedness on account of any foreclosure of, or other realization on
(including collection of insurance proceeds), or in respect of, any of the
liens, collateral assignments, security interests or other security devices
evidenced by the Loan Documents now or hereafter securing payment of the
Indebtedness; provided, however, such calculation shall be net of any payment
against or reduction of the Indebtedness evidenced by the Note and the Loan
Documents after the occurrence of a Default under any of the Loan Documents,
pursuant to the Repayment Guaranty or any other guaranty by any other guarantor
(if any) of all or any part of such Indebtedness and which are clearly
identified as principal payments made pursuant to the Repayment Guaranty in a
notice to Lender confirming the payment and reduction of the outstanding
principal balance of the Loan.  In the event of a foreclosure on any of the
Property and Improvements by Lender pursuant to the terms of the Loan Documents,
or the acceptance by Lender of a deed-in-lieu of foreclosure for an amount
agreed to by Lender (herein called a “Deed-in-Lieu”), the application of
proceeds of any such foreclosure sale or in exchange for such Deed-in-Lieu shall
be in such a manner so as not to reduce or extinguish Guarantor’s liability
hereunder for the portion of the Indebtedness for which Guarantor is liable
under this Guaranty until all of the outstanding Indebtedness under the Loan
Documents for which Guarantor is not liable hereunder has been paid in full.

 

1.2.                            Completion Guaranty.  Guarantor further hereby
guarantees the performance by Borrower of all the terms and provisions of the
Loan Agreement pertaining to Borrower’s obligations with respect to the
construction of the Improvements (as further hereinafter elaborated, the
“Completion Guaranty”). Without limiting the generality of the foregoing,
Guarantor guarantees that: (i) construction of the Improvements shall be
completed within the time limits set forth in the Loan Agreement, as renewed,
extended or modified from time to time; (ii) the Improvements shall be
constructed and completed in substantial accordance with the Plans and
Specifications and the other provisions of the Loan Documents, without
substantial deviation therefrom unless approved by Lender in writing; (iii) the
Improvements shall be constructed and completed free and clear of any mechanic’s
liens, materialman’s liens and equitable liens; and (iv) all costs of
constructing the Improvements shall be paid when due.

 

The term “Guaranty” as used hereinafter shall be a reference to both the
Repayment Guaranty and the Completion Guaranty.

 

2.                                      EXCEPTIONS; LIABILITIES. 
Notwithstanding the foregoing provisions of Section 1, in addition to, and not
in lieu of, but without duplication of, any other liability of Guarantor under
this Guaranty or the other Loan Documents, Guarantor guarantees and promises to
pay to Lender, or order, on demand, in lawful money of the United States of
America, in immediately available funds (and to defend, indemnify and hold
harmless Lender, its directors, officers, employees, successors and assigns from
and against any and all claims, suits, liabilities (including, without
limitation, strict liabilities), actions, or proceedings), any obligations,
debts, actual damages, losses, costs, expenses, fines, penalties, charges, fees,
judgments, awards, court costs, and reasonable legal or other expenses
(including, without limitation, reasonable attorneys’ fees and expenses and
amounts paid in settlement of whatever kind or nature), which Lender incurs or
suffers with respect to any of the following matters (collectively, the
“Nonrecourse Carveout Obligations”):

 

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2.1                               fraud or intentional or willful
misrepresentation by Borrower, a Guarantor, or any Affiliate or agent of
Borrower or Guarantor;

 

2.2                               the gross negligence, willful misconduct, or
commission of a criminal act by Borrower, a Guarantor, or any Affiliate or agent
of Borrower or a Guarantor which results in a forfeiture of the Property;

 

2.3                               material physical waste of the Property or the
Collateral by Borrower or Guarantor or by any Affiliate or agent of Borrower or
Guarantor;

 

2.4                               failure to pay property or other taxes,
assessments or charges that if not paid, would constitute a lien or encumbrance
on the Property, except to the extent that Borrower escrows sufficient funds
with Lender pursuant to the Security Instrument, but Lender fails to release
such funds to pay such taxes, assessments or charges and provided further that
Guarantor’s liability hereunder shall cease with respect to any amounts first
arising from and after such time, if any, that Lender or a trustee takes title
to the Property, including if such party forecloses under the Security
Instrument or accepts a Deed-In-Lieu;

 

2.5                               failure to maintain insurance as required by
the Loan Agreement, except to the extent that Borrower escrows sufficient funds
with Lender, but Lender fails to release such funds to pay such insurance and
provided further that Guarantor’s liability hereunder shall cease with respect
to any amounts first arising from and after such time, if any, that Lender or a
trustee takes title to the Property, including if such party forecloses under
the Security Instrument or accepts a Deed-In-Lieu;

 

2.6                               uninsured damage to the Property resulting
from any acts of terrorism, including, without limitation, the amounts of any
deductible and co-insurance that may be incurred;

 

2.7                               failure to deliver any insurance or
condemnation proceeds or awards received by or on behalf of Borrower to Lender
or to otherwise apply such sums received by or on behalf of Borrower as required
under the terms of the Loan Documents or any other instrument now or hereafter
securing the Loan;

 

2.8                               failure of Borrower, or any of its Affiliates
or agents, to apply any rents, royalties, accounts, revenues, income, issues,
profits and other benefits from the Property which are collected or received by
Borrower during the period of any Default or after acceleration of the
indebtedness and other sums owing under the Loan Documents, except in the case
where Borrower or any of its Affiliates or agents applied to the same to the
payment of either (A) such indebtedness or other sums due Lender or (B) the
normal and necessary operating expenses of the Property;

 

2.9                               failure of Borrower to timely pay any portion
of the Capital Fee or O&M Fee in accordance with Section 9.17 of the Loan
Agreement, provided that Guarantor’s liability hereunder shall cease with
respect to any amounts first arising from and after such time, if any, that
Lender or a trustee takes title to the Property, including if such party
forecloses under the Security Instrument or accepts a Deed-In-Lieu;

 

2.10                        intentional misappropriation or misapplication by
Borrower (i.e., in violation of the terms of the Loan Agreement and the Loan
Documents) of any funds from any account pledged by Borrower to Lender under the
Loan Agreement or the other Loan Documents;

 

2.11                        if, after a Default, any litigation or other legal
proceeding related to the Loan is filed by Borrower, Guarantor or SPE Component
Entity of: (x) Borrower, or (y) any Guarantor, that delays, opposes, impedes,
obstructs, hinders, enjoins or otherwise interferes with the

 

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efforts of Lender to exercise any rights and remedies available to Lender as
provided herein and in the other Loan Documents; or

 

2.12                        Borrower’s material breach of that certain
Section 7.1 entitled Representations, Warranties and Covenants Regarding Special
Purpose Entity Status of the Loan Agreement, provided, however, that the
occurrence of a deficiency in connection with any enforcement action under the
Loan Documents by Lender shall not constitute a violation of
Section 7.1(c)(xvii) of the Loan Agreement, and shall not impose or result in
liability on the part of Guarantor under this Guaranty.

 

3.                                      EXCEPTIONS; FULL RECOURSE. 
Notwithstanding the foregoing, or anything to the contrary contained in this
Guaranty or the other Loan Documents, including without limitation any
limitation on liability herein or therein Guarantor shall be fully and
personally liable for the payment and performance of all obligations set forth
in the Loan Agreement and the other Loan Documents, including the payment of all
principal, interest and other amounts under the Note, in immediately available
funds, in the event:

 

3.1                               Borrower, or any SPE Component Entity, files a
voluntary petition under the Bankruptcy Reform Act of 1978 (11 USC
Section 101-1330) as now or hereafter amended or recodified (“Bankruptcy Code”),
or under any other present or future state or federal law regarding bankruptcy,
reorganization or other debtor relief law; or

 

3.2                               an Affiliate, officer, director, or
representative which Controls Borrower or which Controls any SPE Component
Entity, files, or joins in the filing of, an involuntary petition against
Borrower or any SPE Component Entity under the Bankruptcy Code, or under any
other present or future state or federal law regarding bankruptcy,
reorganization or other debtor relief law, or colludes with, solicits or
actively causes to be solicited, petitioning creditors for any involuntary
petition against Borrower or any SPE Component Entity; or

 

3.3                               Borrower or any SPE Component Entity files an
answer consenting to or otherwise acquiescing in or joining in any involuntary
petition filed against it, by any other person or entity under the Bankruptcy
Code, or under any other present or future state or federal law regarding
bankruptcy, reorganization or other debtor relief law, or colludes with,
actively solicits or causes to be solicited, petitioning creditors for any
involuntary petition filed against either of the foregoing under the Bankruptcy
Code; or

 

3.4                               without the prior written consent of Lender
(which shall be in Lender’s sole and absolute discretion), any Affiliate,
officer, director, or representative which Controls Borrower or which Controls
any SPE Component Entity, consents to or acquiesces in writing or joins in an
application by a party (other than Lender, its designee or Affiliate) for the
appointment of a custodian, receiver, trustee, or examiner for Borrower, any SPE
Component Entity or any portion of the Property; or

 

3.5                               Borrower, or any SPE Component Entity, makes a
general assignment for the benefit of creditors; or

 

3.6                               there is substantive consolidation of
Borrower, or any SPE Component Entity, with any other person or entity in
connection with any federal or state bankruptcy proceeding due to a failure to
comply with that certain Section entitled Representations, Warranties and
Covenants Regarding Special Purpose Entity Status of the Loan Agreement; or

 

3.7                               Borrower, or any SPE Component Entity,
contests or opposes any motion made by Lender to obtain relief from the
automatic stay or seeks to reinstate the automatic stay in the event of any
federal or state bankruptcy or insolvency proceeding involving the Borrower or
any SPE Component Entity; or

 

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3.8                               existence of a Default resulting from a
Prohibited Property Transfer or a Prohibited Equity Transfer.

 

4.                                      NO WAIVER, RELEASE OR IMPAIRMENT. 
Nothing contained in this Guaranty shall be deemed to waive, release, affect or
impair the indebtedness evidenced by the Loan Documents or the obligations of
Borrower under the Loan Documents, or the liens and security interests created
by the Loan Documents, or Lender’s rights to enforce its rights and remedies
under the Loan Documents and under this Guaranty or the indemnity provided
herein (except as expressly provided herein), in the Loan Documents or in
connection with the Loan, or otherwise provided in equity or under applicable
law, including, without limitation, the right to pursue any remedy for
injunctive or other equitable relief, or any suit or action in connection with
the preservation, enforcement or foreclosure of the liens, mortgages,
assignments and security interests which are now or at any time hereafter
security for the payment and performance of all obligations under the Loan
Agreement or in the other Loan Documents.  The provisions of Sections 1 through
5 of this Guaranty shall prevail and control over any contrary provisions
elsewhere in this Guaranty or the other Loan Documents.

 

5.                                      CERTAIN DEFINITIONS. For purposes of
this Guaranty, the following capitalized terms shall have the following
meanings:

 

5.1                               “Affiliate” shall mean, as to any Person, any
other Person that, directly or indirectly, is in Control of, is Controlled by or
is under common ownership or Control with such Person, or is a director or
officer of such Person, or of an Affiliate of such Person.

 

5.2                               “Control” shall mean the power to direct the
management and policies of an entity, directly or indirectly, whether through
the ownership of voting securities or other beneficial interests, by contract or
otherwise.

 

5.3                               “SPE Component Entity” shall mean, if Borrower
is a limited partnership or a limited liability company, each general partner or
managing member of Borrower.

 

6.                                      LIEN FREE COMPLETION.  Completion of the
Improvements free and clear of liens shall be deemed to have occurred upon
Completion of Construction, as defined in the Loan Agreement.

 

7.                                      OBLIGATIONS OF GUARANTOR UPON DEFAULT BY
BORROWER.  If the Improvements are not commenced and completed in the manner and
within the time required by the Loan Agreement, or if, prior to the expiration
of the time limits for said completion set forth in the Loan Agreement,
construction of the Improvements should cease or be halted prior to completion
and such cessation or halt constitutes a Default (as defined in the Loan
Agreement), Guarantor shall, subject to its right to undisbursed Loan proceeds
provided below, within ten (10) Business Days of demand of Lender: 
(a) diligently proceed to complete, or cause to be completed, construction of
the Improvements at Guarantor’s sole cost and expense; (b) subject to the
contest rights of Borrower set forth in the Loan Agreement, fully pay and
discharge all claims for labor performed for, and material and services
furnished in connection with the construction of the Improvements; and
(c) release and discharge all mechanic’s liens, materialman’s liens and related
claims, affidavits or notices that may arise in connection with the construction
of the Improvements.  Without in any way limiting the above obligations of
Guarantor, Lender shall make the undisbursed Loan funds available to Guarantor
(pursuant to the terms and conditions of the Loan Documents to the extent
Guarantor and/or Borrower can satisfy the same and notwithstanding that Borrower
defaults in completing the Improvements pursuant to the Loan Agreement) for the
purposes of completing the Improvements and fulfilling Guarantor’s other
obligations under this Guaranty; provided, however, that the obligation of
Lender to make such undisbursed Loan funds available to Guarantor is expressly
conditioned upon: (x) there being no continuing default by Guarantor under this
Guaranty; and (y) Borrower (and/or Guarantor) having provided to Lender all
Borrower’s Funds then required by the terms and conditions of the Loan
Agreement.

 

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8.                                      REMEDIES.  If Guarantor fails to perform
its obligations under this Guaranty following ten (10) Business Days’ written
notice to Guarantor, Lender shall have the following remedies:

 

8.1                               At Lender’s option, and without any obligation
to do so, to proceed to perform on behalf of Guarantor any or all of Guarantor’s
obligations hereunder and Guarantor shall, promptly upon demand and whether or
not construction is actually completed by Lender, pay to Lender all sums
expended by Lender in performing Guarantor’s obligations hereunder together with
interest thereon at the highest rate specified in the Note; however, so long as
Guarantor is not in Default and has commenced and is diligently pursuing
completion of the Improvements in accordance with the Plans and Specifications
and the other requirements of the Loan Agreement (insofar as they apply to the
quality of construction), then Lender shall not exercise the foregoing rights,
including without limitation, any self-help right to complete construction of
Improvements; and

 

8.2                               From time to time, and without first requiring
performance by Borrower or any other guarantor or exhausting any or all security
(if any) for the Loan, bring any action at law or in equity or both to compel
Guarantor to perform its obligations hereunder, and to collect in any such
action compensation for all loss, cost, actual damage, injury and expense
sustained or incurred by Lender as a result of the failure of Guarantor to
perform its obligations hereunder, together with interest thereon at the rate of
interest applicable to the principal balance of the Note.  Such damages may
include, without limitation, payment to Lender of any actual loss or damage
incurred by Lender as a result of any delay in the completion of construction of
the Improvements beyond the time specified in the Loan Agreement for such
completion, and if Lender completes any portion of the Improvements on
Borrower’s behalf in accordance with the Loan Documents, then Lender shall
direct contractors engaged by it to complete such work on a commercially
reasonable basis and in all material respects in substantial accordance with the
Plans and Specifications.

 

9.                                      RIGHTS OF LENDER.  Guarantor authorizes
Lender, without giving notice to Guarantor or obtaining Guarantor’s consent and
without affecting the liability of Guarantor, from time to time to: (a) approve
modifications to the Plans and Specifications so long as such modifications do
not materially increase the cost of constructing the Improvements nor materially
increase the time necessary to complete the Improvements; (b) change the terms
or conditions of disbursement of the Loan so long as such changes do not
materially interfere with Borrower’s ability to construct the Improvements as
and when required under the Loan Agreement; (c) renew, modify or extend all or
any portion of Borrower’s obligations under the Note or any of the other Loan
Documents; (d) declare all sums owing to Lender under the Note or any of the
other Loan Documents due and payable upon the occurrence and during the
continuance of a Default under the Loan Documents; (e) make non-material changes
in the dates specified for payments of any sums payable in periodic installments
under the Note or any of the other Loan Documents; (f) otherwise modify the
terms of any of the Loan Documents, except for the following modifications which
require the consent of Guarantor: (i) increases in the principal amount of the
Note for or changes in the manner by which interest rates, fees or charges are
calculated under the Note and the other Loan Documents (Guarantor acknowledges
that if the Note or the other Loan Documents so provide, said interest rates,
fees and charges may vary from time to time) or (ii) advancement of the Maturity
Date (as defined in the Note) of the Note where no Default has occurred under
the Loan Documents; (g) take and hold security for the performance of Borrower’s
obligations under Note or the other Loan Documents and exchange, waive,
subordinate, release or during the continuance of a Default, enforce any such
security in whole or part; (h) apply such security and direct the order or
manner of sale thereof as Lender in its discretion may determine (except,
however, that if the Loan Documents require a specific application of such
security or order or manner of sale, then Lender shall comply with any such
requirements), subject to applicable law which cannot and has not been otherwise
overridden by the Loan Documents; (i) release, substitute or add any one or more
endorsers of the Note or guarantors of Borrower’s obligations

 

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under the Note or the other Loan Documents; (j) subject to applicable law which
cannot and has not been otherwise overridden by the Loan Documents, apply
payments received by Lender from Borrower to any obligations of Borrower to
Lender, in such order as Lender shall determine in its sole discretion, whether
or not any such obligations are covered by this Guaranty (except, however, that
if the Loan Documents require a specific application of such security or order
or manner of sale, then Lender shall comply with any such requirements);
(k) assign this Guaranty in whole or in part, subject to the express
restrictions in the Loan Documents; and (l) assign, transfer or negotiate all or
any part of the indebtedness guaranteed by this Guaranty, subject to the express
restrictions in the Loan Documents.

 

10.                               GUARANTOR’S WAIVERS. Guarantor waives: (a) any
defense based upon any legal disability or other defense of Borrower, any other
guarantor or other person, or by reason of the cessation or limitation of the
liability of Borrower from any cause other than payment or performance of those
obligations of Borrower which are guaranteed hereunder; (b) any defense based
upon any lack of authority of the officers, directors, partners, managers,
members or agents acting or purporting to act on behalf of Borrower, Guarantor
or any principal of Borrower or Guarantor, any defect in the formation of
Borrower, Guarantor or any principal of Borrower or Guarantor; (c) any defense
based upon the application by Borrower of the proceeds of the Loan for purposes
other than the purposes represented by Borrower to Lender or intended or
understood by Lender or Guarantor; (d) any and all rights and defenses arising
out of an election of remedies by Lender, even though that election of remedies,
such as a nonjudicial foreclosure with respect to security for a guaranteed
obligation, has destroyed Guarantor’s rights of subrogation or reimbursement
against the principal (i.e., generally, Borrower) by the operation of any
applicable state law or otherwise; (e) any defense based upon Lender’s failure
to disclose to Guarantor any information concerning Borrower’s financial
condition or any other circumstances bearing on Borrower’s ability to pay and
perform its obligations under the Note or any of the other Loan Documents or
upon the failure of any other principals of Borrower to guaranty the Loan;
(f) any defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in any other
respects more burdensome than that of a principal; (g) any defense based upon
Lender’s election, in any proceeding instituted under the Federal Bankruptcy
Code, of the application of Section 1111(b)(2) of the Federal Bankruptcy Code or
any successor statute; (h) any defense based upon any borrowing or any grant of
a security interest under Section 364 of the Federal Bankruptcy Code;
(i) subject to the terms of Section 14 below, any right of subrogation, any
right to enforce any remedy which Lender may have against Borrower and any right
to participate in, or benefit from, any security for the Note or the other Loan
Documents now or hereafter held by Lender; (j) presentment, demand, protest and
except as expressly set forth herein or in any Loan Document, notice of any
kind; (k) the benefit of any applicable statute of limitations affecting the
liability of Guarantor hereunder or the enforcement hereof; (l) any right to
require Lender to institute suit or exhaust remedies against Borrower or others
liable for any of such indebtedness, to enforce Lender’s rights against any
collateral which shall have been given to secure the Loan, to enforce Lender’s
rights against any other guarantors of such indebtedness, to join Borrower or
any others liable on such indebtedness in any action seeking to enforce this
Guaranty, to resort to any other means of obtaining payment of such
indebtedness; (m) notices of disbursement of Loan proceeds, acceptance hereof,
proof of non-payment, default under any of the Loan Documents, notices and
demands of any kind except as expressly set forth herein or in any other Loan
Documents or Other Related Documents (it being Guarantor’s and Lender’s intent
that Guarantor shall not be considered a “debtor” in accordance with
Section 9.102 of the Texas Business and Commerce Code, as now existing or
hereafter amended); and (n) the invalidity, illegality or unenforceability of
all or any portion of the indebtedness guaranteed hereby or any of the Loan
Documents for any reason whatsoever, including that interest on such
indebtedness violates applicable usury laws, that Borrower or others liable for
all or a portion thereof have valid defenses, claims or offsets to all or a
portion of such indebtedness, or that the Note or other Loan Documents have been
forged or otherwise are irregular or not genuine or authentic (it being agreed
that Guarantor shall remain liable under this Guaranty regardless of whether
Borrower or any other person shall be found not liable for repayment of all or a
portion of such indebtedness).  Guarantor further waives any and all rights

 

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and defenses that Guarantor may have because Borrower’s debt is secured by real
property; this means, among other things, that: (1) Lender may collect from
Guarantor without first foreclosing on any real or personal property collateral
pledged by Borrower; (2) if Lender forecloses on any real property collateral
pledged by Borrower, then (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, and (B) Lender may collect from
Guarantor even if Lender, by foreclosing on the real property collateral, has
destroyed any right Guarantor may have to collect from Borrower.  The foregoing
sentence is an unconditional and irrevocable waiver of any rights and defenses
Guarantor may have because Borrower’s debt is secured by real property.  These
rights and defenses being waived by Guarantor include, but are not limited to,
any rights or defenses based upon deficiency limitation or anti-deficiency,
redemption or other similar rights.  Without limiting the generality of the
foregoing or any other provision hereof, Guarantor further expressly waives to
the extent permitted by law any and all rights and defenses, including without
limitation, any rights of subrogation, reimbursement, indemnification and
contribution, and which might otherwise be available to Guarantor under Texas
Property Code Sections 51.003, 51.004 and 51.005 or otherwise. Finally,
Guarantor agrees that the payment or performance of any act which tolls any
statute of limitations applicable to the Note or any of the other Loan Documents
shall similarly operate to toll the statute of limitations applicable to
Guarantor’s liability hereunder.

 

11.                               GUARANTOR’S WARRANTIES.  Guarantor warrants,
represents, covenants and acknowledges to Lender that: (a) Lender would not make
the Loan but for this Guaranty; (b) Guarantor has reviewed all of the terms and
provisions of the Loan Agreement, Plans and Specifications and the other Loan
Documents; (c) there are no conditions precedent to the effectiveness of this
Guaranty; (d) Guarantor has, as of the date hereof, established adequate means
of obtaining from sources other than Lender, on a continuing basis, financial
and other information pertaining to Borrower’s financial condition, the Property
and Borrower’s activities relating thereto and the status of Borrower’s
performance of its obligations under the Loan Documents, and Guarantor agrees to
keep adequately informed from such means of any facts, events or circumstances
which might in any way affect Guarantor’s risks hereunder, and Lender has made
no representation to Guarantor as to any such matters; (e) the most recent
financial statements of Guarantor heretofore delivered to Lender are true and
correct in all material respects, have been prepared in accordance with
generally accepted accounting principles consistently applied (or other
principles acceptable to Lender) and fairly and accurately represent the
financial condition of Guarantor as of the respective dates thereof, and no
material adverse change has occurred as of the date hereof in the financial
condition of Guarantor since the respective dates thereof; and (f) Guarantor is
not and will not be, as a consequence of the execution and delivery of this
Guaranty, impaired or rendered “insolvent”, as that term is defined in either
Texas Business and Commerce Code § 24.003 or Section 101 of the Federal
Bankruptcy Code, or otherwise rendered unable to pay Guarantor’s debts as the
same mature and will not have thereby undertaken liabilities in excess of the
present fair value of Guarantor’s assets.  Notwithstanding the foregoing, the
calculation of liabilities shall NOT include any fair value adjustments to the
carrying value of liabilities to record such liabilities at fair value pursuant
to electing the fair value option election under FASB ASC 825-10-25 (formerly
known as FAS 159, The Fair Value Option for Financial Assets and Financial
Liabilities) or other FASB standards allowing entities to elect fair value
option for financial liabilities.  Therefore, the amount of liabilities shall be
the historical cost basis, which generally is the contractual amount owed
adjusted for amortization or accretion of any premium or discount. Guarantor
acknowledges and agrees that Lender may request and obtain additional
information from third parties regarding any of the above, including, without
limitation, credit reports.

 

12.                               FINANCIAL COVENANTS.  So long as Guarantor is
Forestar, Guarantor shall maintain compliance, at all times that any portion of
the Loan is outstanding, with the following financial covenants (the “Financial
Covenants”).:

 

12.1                        Guarantor shall maintain Net Unencumbered Liquid
Assets (as defined in the Loan Agreement) on an aggregate basis of not less than
$30,000,000.

 

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12.2                        Guarantor shall maintain a Tangible Net Worth (as
defined in the Loan Agreement) of not less than $250,000,000.

 

12.3                        Guarantor shall remain listed and publicly traded
on, and in good standing with, the New York Stock Exchange.

 

13.                               FINANCIAL STATEMENTS.

 

13.1.                     Guarantor Financial Statements.

 

(a)                                 Guarantor shall deliver to Lender, as soon
as available, but in no event later than ninety (90) days after Guarantor’s
fiscal year end, a current financial statement (including a balance sheet,
income and expense statement and cash flow statement) signed and certified to be
true, complete and correct, by Guarantor, together with any other financial
information, including, without limitation, quarterly financial statements,
reasonably requested by Lender for the Guarantor.

 

(b)                                 Guarantor shall deliver to Lender, within
forty-five (45) days after the end of each calendar quarter, a compliance
certificate executed by Guarantor in form and substance reasonably acceptable to
Lender, certifying as to the status of the Financial Covenants for the calendar
quarter then ended, and Guarantor’s compliance (or non-compliance, as the case
may be) with such Financial Covenants.

 

13.2                        Other Information.  From time to time, upon Lender’s
delivery to Guarantor of at least ten (10) days prior written notice, with
regard to Guarantor, Guarantor shall deliver to Lender such other information as
is reasonably available to Guarantor and as Lender may reasonably request with
regard to Guarantor’s creditworthiness.

 

13.3                        Form; Warranty.  Guarantor agrees that all financial
statements to be delivered to Lender pursuant to this Section shall:  (a) be
complete and correct in all material respects as of the date of such statement;
(b) present fairly the financial condition of the party; (c) disclose all
liabilities that are required to be reflected or reserved against; and (d) to
the best of Guarantor’s knowledge, be prepared in accordance with generally
accepted accounting principles, or other principles acceptable to Lender, in
each case consistently applied (it being understood and agreed that the
accounting principles used in preparing the Guarantor’s financial statements
submitted to Lender in connection with the underwriting and closing of the Loan
(the “Original Statement of Financial Condition”) are acceptable to Lender). 
Lender, by acceptance of this Guaranty acknowledges and agrees that the form of
the Original Statement of Financial Condition is acceptable and that such form
(updated to reflect Guarantor’s then current financial condition) shall be
acceptable on an ongoing basis.  Notwithstanding the foregoing, the calculation
of liabilities shall NOT include any fair value adjustments to the carrying
value of liabilities to record such liabilities at fair value pursuant to
electing the fair value option election under FASB ASC 825-10-25 (formerly known
as FAS 159, The Fair Value Option for Financial Assets and Financial
Liabilities) or other FASB standards allowing entities to elect fair value
option for financial liabilities. Therefore, the amount of liabilities shall be
the historical cost basis, which generally is the contractual amount owed
adjusted for amortization or accretion of any premium or discount. Guarantor
acknowledges and agrees that Lender may request and obtain additional
information from third parties regarding any of the above. By Guarantor’s
execution of this Guaranty, Guarantor shall be deemed to warrant and represent
that, as of the date of delivery of any such financial statement, such financial
statement satisfies the criteria set forth in clauses (a) through (d) of the
first sentence of this Section 13.3.  Guarantor agrees that it shall use
commercially reasonable efforts to ensure that any information to be delivered
to Lender

 

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pursuant to this Section shall not contain any misrepresentation of any material
fact or omission of a material fact.

 

14.                               SUBORDINATION.  Until the Loan is indefeasibly
paid in full, Guarantor subordinates all present and future indebtedness owing
by Borrower or, following the occurrence and during the continuance of a
Default, by any other guarantor under any guaranty or indemnity of the Loan, to
Guarantor to the obligations at any time owing by Borrower to Lender under the
Note and the other Loan Documents.  Guarantor collaterally assigns all such
indebtedness of Borrower to Guarantor to Lender as security for this Guaranty,
the Note and the other Loan Documents.  Guarantor agrees (except as necessary to
preserve the validity of a claim) to make no claim for such indebtedness of
Borrower to Guarantor until all obligations of Borrower under the Note and the
other Loan Documents have been fully discharged. Guarantor further agrees not to
assign all or any part of such indebtedness of Borrower to Guarantor unless
Lender is given prior notice and such assignment is expressly made subject to
the terms of this Guaranty.  If Lender so requests, (a) all instruments
evidencing such indebtedness of Borrower to Guarantor shall be duly endorsed and
delivered to Lender, (b) all security for such indebtedness of Borrower to
Guarantor shall be duly assigned and delivered to Lender, (c) until the Loan is
indefeasibly paid in full, such indebtedness of Borrower to Guarantor shall be
enforced, collected and held by Guarantor as trustee for Lender and upon the
occurrence of a Default which is continuing shall be paid over to Lender on
account of the Loan but without reducing or affecting in any manner the
liability of Guarantor under the other provisions of this Guaranty, and
(d) Guarantor shall execute, file and record such documents and instruments and
take such other action as Lender deems necessary or appropriate to perfect,
preserve and during the continuance of a Default enforce Lender’s rights in and
to such indebtedness and any security therefor.  If Guarantor fails to take any
such action within ten (10) Business Days of written request from Lender,
Lender, as attorney-in-fact for Guarantor, is hereby authorized to do so in the
name of Guarantor.  The foregoing power of attorney is coupled with an interest
and cannot be revoked.

 

15.                               BANKRUPTCY OF BORROWER.  In any bankruptcy or
other similar proceeding of Borrower in which the filing of claims is required
by law, Guarantor shall file all claims which Guarantor may have against
Borrower relating to any indebtedness of Borrower to Guarantor and shall assign
to Lender all rights of Guarantor thereunder. If Guarantor does not file any
such claim within ten (10) Business Days of written request therefor, Lender, as
attorney-in-fact for Guarantor, is hereby authorized to do so in the name of
Guarantor or, in Lender’s discretion, to assign the claim to a nominee and to
cause proof of claim to be filed in the name of Lender’s nominee.  The foregoing
power of attorney is coupled with an interest and cannot be revoked.  Lender or
Lender’s nominee shall have the right, in its reasonable discretion, to accept
or reject any plan proposed in such proceeding and to take any other action
which a party filing a claim is entitled to do.  In all such cases, whether in
administration, bankruptcy or otherwise, the person or persons authorized to pay
such claim shall pay to Lender the amount payable on such claim and, to the full
extent necessary for that purpose, Guarantor hereby assigns to Lender all of
Guarantor’s rights to any such payments or distributions; provided, however,
Guarantor’s obligations hereunder shall not be satisfied except to the extent
that Lender receives cash by reason of any such payment or distribution.  If
Lender receives anything hereunder other than cash, the same shall be held as
collateral for amounts due under this Guaranty.  If all or any portion of the
obligations guaranteed hereunder are paid or performed, the obligations of
Guarantor hereunder shall continue and shall remain in full force and effect in
the event that all or any part of such payment or performance is avoided or
recovered directly or indirectly from Lender as a preference, fraudulent
transfer or otherwise under the Bankruptcy Code or other similar laws,
irrespective of (a) any notice of revocation given by Guarantor prior to such
avoidance or recovery, or (b) full payment and performance of all of the
indebtedness and obligations evidenced and secured by the Loan Documents.

 

16.                               ADDITIONAL, INDEPENDENT AND UNSECURED
OBLIGATIONS.  This Guaranty is a continuing guaranty of payment and not of
collection and cannot be revoked by Guarantor and shall continue to be effective
with respect to any indebtedness referenced in Section 1 hereof

 

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arising or created after any attempted revocation hereof or after the death of
Guarantor (if Guarantor is a natural person, in which event this Guaranty shall
be binding upon Guarantor’s estate and Guarantor’s legal representatives and
heirs). The obligations of Guarantor hereunder shall be in addition to and shall
not limit or in any way affect the obligations of Guarantor under any other
existing or future guaranties unless said other guaranties are expressly
modified or revoked in writing. This Guaranty is independent of the obligations
of Borrower under the Note and the other Loan Documents, and the Security
Instrument. Lender may bring a separate action to enforce the provisions hereof
against Guarantor without taking action against Borrower or any other party or
joining Borrower or any other party as a party to such action.  Except as
otherwise provided in this Guaranty, this Guaranty is not secured and shall not
be deemed to be secured by any security instrument unless such security
instrument expressly recites that it secures this Guaranty.

 

17.                               CREDIT REPORTS.  Each legal entity and
individual obligated on this Guaranty hereby authorizes Lender to order and
obtain, from a credit reporting agency of Lender’s choice, a third party credit
report on such legal entity and individual.

 

18.                               ENFORCEABILITY.  Guarantor hereby acknowledges
that: (a) the obligations undertaken by Guarantor in this Guaranty are complex
in nature, and (b) numerous possible defenses to the enforceability of these
obligations may presently exist and/or may arise hereafter, and (c) as part of
Lender’s consideration for entering into this transaction, Lender has
specifically bargained for the waiver and relinquishment by Guarantor of all
such defenses other than the defense of payment or that the obligations
hereunder are not due pursuant to the terms of this Guaranty or the Loan
Documents, and (d) Guarantor has had the opportunity to seek and receive legal
advice from skilled legal counsel in the area of financial transactions of the
type contemplated herein.  Given all of the above, Guarantor does hereby
represent and confirm to Lender that Guarantor is fully informed regarding, and
that Guarantor does thoroughly understand: (i) the nature of all such possible
defenses, and (ii) the circumstances under which such defenses may arise, and
(iii) the benefits which such defenses might confer upon Guarantor, and (iv) the
legal consequences to Guarantor of waiving such defenses.  Guarantor
acknowledges that Guarantor makes this Guaranty with the intent that this
Guaranty and all of the informed waivers herein shall each and all be fully
enforceable by Lender, and that Lender is induced to enter into this transaction
in material reliance upon the presumed full enforceability thereof.

 

19.                               MISCELLANEOUS.

 

19.1.                     Notices.  All notices, demands, or other
communications under this Guaranty and the other Loan Documents shall be in
writing and shall be delivered to the appropriate party at the address set forth
below (subject to change from time to time by written notice to all other
parties to this Guaranty).  All notices, demands or other communications shall
be considered as properly given if delivered personally or sent by first class
United States Postal Service mail, postage prepaid, or by Overnight Express Mail
or by overnight commercial courier service, charges prepaid, or by facsimile
transmission with Overnight Express Mail or overnight commercial courier
service, with charges prepaid, to follow, except that notice of Default may be
sent by certified mail, return receipt requested, charges prepaid.  Notices so
sent shall be effective upon delivery or refusal; provided, however, that
non-receipt of any communication as the result of any change of address of which
the sending party was not notified or as the result of a refusal to accept
delivery shall be deemed receipt of such communication.  For purposes of notice,
the address of the parties shall be:

 

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Guarantor:

 

Forestar (USA) Real Estate Group Inc.
6300 Bee Cave Road
Building 2, Suite 500
Austin, Texas 78746
Attention: Legal Department
Facsimile: (512) 433-5201

 

 

 

With a copy to:

 

Locke Lord LLP
2200 Ross Avenue, Suite 2200
Dallas, Texas 75201
Attention: R. Brent Clifton
Facsimile: (214) 740-8800

 

 

 

With a copy to:

 

Guggenheim Plus Leveraged LLC
c/o Guggenheim Real Estate LLC
500 Boylston St.
Boston, Massachusetts 02116
Attention: Mr. Joseph P. Mahoney
Facsimile: (617) 536-5455

 

 

 

With a copy to:

 

Goodwin Procter LLP
Exchange Place
Boston, Massachusetts 02109-2881
Attention: Samuel L. Richardson, Esq.
Facsimile: (617) 523-1231

 

 

 

Lender:

 

Wells Fargo Bank, National Association
Commercial Real Estate (AU #64061)
111 Congress Avenue, Suite 530
MAC T7044-050
Austin, Texas 78701
Attention: Chris M. Garza
Loan #: 1007252
Facsimile: (512) 344-6818

 

 

 

With a copy to:

 

Wells Fargo Bank, National Association
Minneapolis Loan Center
608 2nd Ave South, 11th Floor
Minneapolis, MN 55402
Attention: Valerie Amolo

 

Any party shall have the right to change its address for notice hereunder to any
other location within the continental United States by the giving of thirty (30)
days notice to the other party in the manner set forth hereinabove.  Guarantor
shall forward to Lender, without delay, any notices, letters or other written
communications delivered to the Property or to Guarantor naming Lender or the
“Construction Lender”.

 

19.2.       Attorneys’ Fees and Expenses; Enforcement.  If any attorney is
engaged by Lender to enforce or defend any provision of this Guaranty, or as a
consequence of any Default under this Guaranty, with or without the filing of
any legal action or proceeding, then Guarantor shall pay to Lender, within ten
(10) days of written demand, the amount of all reasonable attorneys’ fees and
out-of-pocket expenses (other than the customarily charged internal costs of
Lender’s group responsible for construction review and costing,

 

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which shall be included hereunder, if any) and all costs incurred by Lender in
connection therewith, together with interest thereon from the date of such
demand until paid at the rate of interest applicable to the principal balance of
the Note as specified therein.  In the event of any legal proceedings, court
costs and reasonable attorneys’ fees shall be set by the court and not by jury
and shall be included in any judgment obtained by Lender.

 

19.3.                     No Waiver.  No previous waiver and no failure or delay
by Lender in acting with respect to the terms of the Note or this Guaranty shall
constitute a waiver of any breach, default, or failure of condition under the
Note or this Guaranty or the obligations secured thereby.  A waiver of any term
of the Note or this Guaranty or of any of the obligations secured thereby must
be made in writing and shall be limited to the express written terms of such
waiver.

 

19.4.                     Loan Sales and Participation; Disclosure of
Information.  Guarantor agrees that Lender may elect to sell, assign or
participate the Loan in accordance with Section 13.7 of the Loan Agreement.  The
terms and provisions of Section 13.7 of the Loan Agreement are incorporated
herein by reference.

 

Anything in this Guaranty to the contrary notwithstanding, and without the need
to comply with any of the formal or procedural requirements of this Guaranty,
including this Section, any lender may at any time and from time to time pledge
and assign all or any portion of its rights under all or any of the Loan
Documents to a Federal Reserve Bank; provided that no such pledge or assignment
shall release such lender from its obligations thereunder.

 

19.5.                     Waiver of Right to Trial by Jury.  TO THE EXTENT
PERMITTED BY APPLICABLE STATE LAW, EACH PARTY TO THIS GUARANTY HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION (a) ARISING UNDER THE LOAN DOCUMENTS, INCLUDING, WITHOUT LIMITATION, ANY
PRESENT OR FUTURE MODIFICATION THEREOF OR (b) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO THE LOAN DOCUMENTS (AS MAY NOW OR HEREAFTER BE MODIFIED) OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION IS NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES
AND CONSENTS THAT ANY PARTY TO THIS GUARANTY MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF ANY RIGHT THEY MIGHT OTHERWISE HAVE TO TRIAL BY
JURY.  THIS PROVISION IS A MATERIAL INDUCEMENT OF LENDER TO MAKE THE LOAN TO
BORROWER.

 

19.6.                     Severability.  If any provision or obligation under
this Guaranty shall be determined by a court of competent jurisdiction to be
invalid, illegal or unenforceable, that provision shall be deemed severed from
this Guaranty and the validity, legality and enforceability of the remaining
provisions or obligations shall remain in full force as though the invalid,
illegal, or unenforceable provision had never been a part of this Guaranty.

 

19.7.                     Heirs, Successors and Assigns.  Except as otherwise
expressly provided under the terms and conditions herein, the terms of this
Guaranty shall bind and inure to the benefit of the heirs, executors,
administrators, nominees, successors and assigns of the parties hereto.

 

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19.8.                     Time.  Time is of the essence of each and every term
herein.

 

19.9.                     Governing Law And Consent To Jurisdiction.  This
Guaranty and any claim, controversy or dispute arising under or related to this
Guaranty, the relationship of the parties, and/or the interpretation and
enforcement of the rights and duties of the parties will be governed by, and
construed and enforced in accordance with, the laws of the State of Texas
without regard to any conflicts of law principles, except to the extent
preempted by federal laws.  Guarantor and all persons and entities in any manner
obligated to Lender under the Loan Documents consent to the jurisdiction of any
federal or state court within the State of Texas or State of Colorado having
proper venue and also consent to service of process by any means authorized by
Texas or Colorado or federal law.

 

19.10.              Survival.  Subject to the release provisions as provided in
Section 12.2 of the Loan Agreement, this Guaranty shall be deemed to be
continuing in nature and shall remain in full force and effect and shall survive
the exercise of any remedy by Lender under the Security Instrument or any of the
other Loan Documents, including, without limitation, any foreclosure or
Deed-In-Lieu thereof, subject to Section 1.1 and the following provisions
related to the Completion Guaranty.  Notwithstanding the foregoing, the
obligations of Guarantor under the Completion Guaranty, but not Guarantor’s
other obligations under this Guaranty, shall be deemed released in their
entirety at such time as all of the following conditions have been satisfied
(the “Release Conditions”):

 

(a)           Borrower has satisfied all conditions for the final advance of the
Loan proceeds in accordance with the provisions of Section 3.4 and 3.5 (as
applicable) of the Loan Agreement and Completion of Construction shall have been
achieved;

 

(b)           No Default shall then exist under the Loan Documents;

 

(c)           the statutory period(s) within which valid mechanic’s liens,
materialman’s liens and/or similar claims, affidavits or notices may be recorded
and/or served by reason of construction of the Improvements shall have expired
or, if any such lien is recorded against the Property prior to the expiration of
such statutory period, Borrower shall have bonded around such lien (any lien
bonded around being referred to a “Bonded Lien”) in accordance with all
applicable laws so that such lien is not an encumbrance on the Property and
Improvements; and

 

(d)           Any contractor, subcontractor or supplier who provided work or
materials in connection with construction of the Improvements shall have been
paid in full except for any payments relating to a Bonded Lien.

 

Guarantor or Borrower shall pay within thirty (30) days after demand all
reasonable third party costs and third party expenses incurred by or charged to
Lender, not to exceed then market rates, in connection with verifying that the
Release Conditions have been satisfied. To the extent the foregoing Release
Conditions have been satisfied, upon Guarantor’s written request to Lender,
Lender shall provide confirmation of the satisfaction of the Release Conditions
within ten (10) Business Days after receipt of such written request.

 

19.11.              Headings.  All article, section or other headings appearing
in this Guaranty are for convenience of reference only and shall be disregarded
in construing this Guaranty.

 

19.12.              Powers Of Attorney.  The powers of attorney granted by
Guarantor to Lender in this Guaranty shall be unaffected by the disability of
the principal so long as any portion of the Loan remains unpaid or unperformed. 
Lender shall have no obligation to exercise any of the foregoing rights and
powers in any event.  Guarantor acknowledges that this power of

 

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attorney forms a part of a contract (this Guaranty) and is security for money or
for the performance of a valuable act.  Lender hereby discloses that it may
exercise the foregoing power of attorney for Lender’s benefit, and such
authority need not be exercised for Guarantor’s best interest.

 

19.13.              Defined Terms.  Unless otherwise defined herein, capitalized
terms used in this Guaranty shall have the meanings attributed to such terms in
the Loan Agreement.

 

19.14.              Rules Of Construction.  The word “Borrower” as used herein
shall include both the named Borrower and any other person at any time assuming
or otherwise becoming primarily liable for all or any part of the obligations of
the named Borrower under the Note and the other Loan Documents.  The term
“person” as used herein shall include any individual, company, trust or other
legal entity of any kind whatsoever. If this Guaranty is executed by more than
one person, the term “Guarantor” shall include all such persons. The word
“Lender” as used herein shall include Lender and its permitted successors and
assigns.

 

19.15.              Use Of Singular And Plural; Gender.  When the identity of
the parties or other circumstances make it appropriate, the singular number
includes the plural, and the masculine gender includes the feminine and/or
neuter.

 

19.16.              Exhibits, Schedules And Riders.  All exhibits, schedules,
riders and other items attached hereto are incorporated into this Guaranty by
such attachment for all purposes.

 

19.17.              Integration; Interpretation.  THIS GUARANTY REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE MATTERS CONTEMPLATED
HEREBY AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.  THIS INSTRUMENT MAY BE AMENDED ONLY BY AN
INSTRUMENT IN WRITING EXECUTED BY THE PARTIES HERETO.

 

19.18.              Exculpation.  Notwithstanding anything to the contrary
contained herein, no present or future Constituent Member in Guarantor, nor any
present or future, direct or indirect, shareholder, officer, director, employee,
trustee, beneficiary, advisor, member, partner, principal, participant or agent
of or in Guarantor or of or in any person or entity that is or becomes a
Constituent Member in Guarantor, shall have any personal liability, directly or
indirectly, under or in connection with this Guaranty or any amendment or
amendments to this Guaranty made at any time or times, heretofore or hereafter,
and Lender on behalf of itself and its successors and assigns, hereby waives any
and all such personal liability. As used herein, “Constituent Member” shall mean
any direct shareholder, member or partner in Guarantor and any person or entity
that, directly or indirectly through one or more other partnerships, limited
liability companies, corporations or other entities is a member or partner in
Guarantor or owns an interest in Guarantor.  To the extent Guarantor is a
limited liability company, limited partnership, or other similar entity, for
purposes hereof, neither the negative capital account of any Constituent Member
in Guarantor nor any obligation of any Constituent Member in Guarantor to
restore a negative capital account or to contribute or loan capital to Guarantor
or to any other Constituent Member in Guarantor shall at any time be deemed to
be the property or an asset of Guarantor (or any such other Constituent Member)
and neither Lender nor any of its successors or assigns shall have any right to
collect, enforce or proceed against with respect to any such negative capital
account or obligation to restore, contribute or loan.  Nothing contained in this
Section 19.18 shall be deemed to waive, release, affect, alter or impair (i) the
Indebtedness evidenced by the Loan Documents, (ii) the obligations of Borrower
under the Loan Documents, the obligations of Guarantor under this Guaranty or
the obligations of the Indemnitor under the Hazardous Materials Indemnity
Agreement

 

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(the “Indemnity”), (iii) the liens and security interests created by the Loan
Documents, or (iv) Lender’s rights to enforce its rights and remedies against
Borrower, Guarantor, Indemnitor and/or the Property, as applicable, under the
Loan Documents, this Guaranty or the Indemnity, provided in the Loan Documents
or Other Related Documents or in connection with the Loan, or otherwise provided
in equity or under applicable law, including, without limitation, the right to
pursue any remedy for injunctive or other equitable relief, or any suit or
action in connection with the preservation, enforcement or foreclosure of the
liens, security interests and assignments which are now or at any time hereafter
security for the payment and performance of all indebtedness and obligations
under the Loan Documents.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date
appearing on the first page of this Guaranty.

 

 

 

GUARANTOR:

 

 

 

FORESTAR (USA) REAL ESTATE GROUP INC.,

 

a Delaware corporation

 

 

 

By:

/s/ Charles T. Etheredge, Jr.

 

Name: Charles T. Etheredge, Jr.

 

Title: Executive Vice President

 

[Signature Page — Guaranty Agreement]

 

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