TARR Tarragon (MM)

Tarragon Corporation (NASDAQ: TARR) today announced that it has entered into a restructuring support and forbearance agreement with the holders of its $125 million of corporate-level unsecured subordinated notes. The holders of the subordinated notes have agreed to support a financial restructuring of Tarragon and to refrain from exercising any of their rights and remedies under the terms of the subordinated notes through June 30, 2009, subject to the terms and conditions of the agreement. As part of the financial restructuring, the subordinated notes and approximately $38 million of indebtedness held by an affiliate of William S. Friedman, Tarragon�s Chairman and Chief Executive Officer, and Robert P. Rothenberg, Tarragon�s President, would be restructured and become obligations of a reorganized Tarragon or an affiliated issuer. The agreement also contemplates that Tarragon would enter into one or more definitive agreements with a sponsor of an overall financial restructuring plan. Under the overall plan, which may be implemented through a voluntary petition for Chapter 11 bankruptcy protection, the sponsor of the plan and certain Tarragon debtholders would receive shares of reorganized Tarragon�s equity representing a controlling interest in the reorganized company in exchange for the assumption of indebtedness discussed above. The Tarragon board of directors is being advised by Lazard in connection with the board�s evaluation of alternatives that may be available to Tarragon to maximize stakeholder value. These alternatives may include, but are not limited to, a possible sale or other recapitalization or restructuring of the Company, and all available forms and sources of financing, property sales or other strategic transactions, including the implementation of an overall financial restructuring plan. Forward-Looking Statements Information in this press release includes "forward-looking statements" made pursuant of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that are based on management�s expectations, estimates, projections and assumptions. Words such as "expects," "anticipates," "intends," "estimates" and variations of these words and similar expressions are intended to identify forward-looking statements, which include but are not limited to statements regarding Tarragon�s expectations regarding the terms and conditions of a financial restructuring of the company. Actual results and the timing of certain events could differ materially from those projected or contemplated by the forward-looking statements due to a number of factors, including, but not limited to: the ability of Tarragon to negotiate satisfactory definitive agreements to implement an overall financial restructuring plan and the satisfaction of any conditions thereunder and under the restructuring support and forbearance agreement with the holders of Tarrragon�s subordinated notes; conditions in the homebuilding industry and residential real estate and mortgage markets; risks associated with the implementation of the financial restructuring; conditions in the capital and financial markets generally; and general economic conditions, interest rates and other risk factors outlined in Tarragon�s SEC reports, including its Annual Report on Form 10-K for the year ended December 31, 2007 and more recent Quarterly Reports on Form 10-Q.