Restated Guarenty Agreement



 






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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