Exhibit 10.4

 

GUARANTY AGREEMENT

 

This GUARANTY AGREEMENT (this “Guaranty”) is made as of the 27th day of
December, 2012, by BEHRINGER HARVARD OPPORTUNITY REIT I, INC., a Maryland
corporation (“Guarantor”), in favor of (a) BANK OF AMERICA, N.A., a national
banking association (“Bank of America”; and together with its successors and
assigns, “Syndicated Administrative Agent”), as Administrative Agent acting for
and on behalf of BANK OF AMERICA and REGIONS BANK, an Alabama banking
corporation (“Regions Bank”; and Bank of America and Regions Bank, together with
their respective successors and assigns, are, collectively hereafter referred to
as the “Syndicated Lenders”), and (b) BANK OF AMERICA(together with its
successors and assigns, “Theater Administrative Agent”), as Administrative Agent
acting for and on behalf of BANK OF AMERICA (together with its successors and
assigns, the “Theater Lender”) (Syndicated Lenders and Theater Lender are
referred to herein, collectively, as the “Lenders”, and each, a “Lender”).

 

PRELIMINARY STATEMENTS

 

BHFS I, LLC, BHFS II, LLC, BHFS III, LLC, and BHFS IV, LLC, each a Delaware
limited liability company (collectively, the “Original Syndicated Loan
Borrowers”) entered into a lending transaction with Syndicated Agent and
Syndicated Lenders on July 28, 2008, as evidenced by certain promissory notes
(collectively, the “Original Syndicated Notes”), and governed by that certain
Loan Agreement, as amended from time to time prior to the date hereof 
(“Original Syndicated Loan Agreement”), whereby the Original Syndicated Loan
Borrowers obtained loans from the Syndicated Lenders in the aggregate original
principal amount of $57,779,019.00 (“Original Syndicated Loan”).

 

BHFS Theater, LLC, a Delaware limited liability company (“Theater Borrower”),
entered into a lending transaction with Theater Administrative Agent and Theater
Lender on December 10, 2010, as evidenced by that certain promissory note
(“Original Theater Note”), and which Original Theater Note is governed by that
certain Construction Loan Agreement (“Original Theater Loan Agreement”), whereby
the Theater Borrower obtained a loan from Theater Lender in the original
principal amount of $5,047,057.00 (“Original Theater Loan”).

 

Guarantor and Fairways Frisco, LP, a Texas limited partnership (“Fairways”),
executed that certain Guaranty Agreement, dated July 28, 2008, as amended from
time to time prior to the date hereof (“Original Syndicated Guaranty
Agreement”), in favor of Bank of America, as Administrative Agent on behalf of
Syndicated Lenders, guaranteeing, among other things, the repayment of the
Original Syndicated Loan, as described therein.  Additionally, Guarantor and
Fairways executed that certain Guaranty Agreement, dated December 10, 2010
(“Original Theater Guaranty Agreement”) in favor of Bank of America, as
Administrative Agent on behalf of Theater Lender, guaranteeing the repayment of
the Original Theater Loan, as described therein.  The Original Syndicated
Guaranty Agreement and the Original Theater Guaranty Agreement are, collectively
referred to as the “Original Guaranty Agreement”.

 

The Original Syndicated Notes matured on January 28, 2012, and as a result of
such maturity, all amounts owed by Original Syndicated Loan Borrowers under the
Original Syndicated Loan Agreement became due and payable on that date, after
which time Original

 

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Syndicated Loan Borrowers were in default.  Additionally, the Original Theater
Note was accelerated and therefore deemed matured on February 14, 2012, and as a
result of such maturity, all amounts owed by Theater Borrower under the Original
Theater Loan Agreement became due and payable on that date, after which time
Theater Borrower was in default.

 

On June 13, 2012, Original Syndicated Loan Borrowers and Theater Borrower
(collectively, the “Debtors”) filed voluntary petitions for relief commencing
bankruptcy cases under Chapter 11 of the United States Bankruptcy Code, jointly
administered under Bankruptcy Case No. 12-41581, in the United States Bankruptcy
Court for the Eastern District of Texas, Sherman Division (the “Bankruptcy
Court”).  The Debtors subsequently filed Debtors Amended Joint Consolidated Plan
of Reorganization (the “Plan”) in the Bankruptcy Court.  The Bankruptcy Court
entered its order (“Order”) confirming the Plan on December 20, 2012, and the
Plan is currently in effect in accordance with its terms.

 

Pursuant to the Plan and the Order, Syndicated Administrative Agent, Syndicated
Lenders, Original Syndicated Loan Borrowers, Theater Borrower, and Behringer
Harvard Frisco Square LP, a Delaware limited partnership (collectively,
“Syndicated Borrowers”), have entered into, are entering into concurrently
herewith, or contemplate entering into, that certain Amended and Restated Loan
Agreement dated of even date herewith (herein called, as it may hereafter be
modified, supplemented, restated, extended, or renewed and in effect from time
to time, the “Syndicated Loan Agreement”), which Syndicated Loan Agreement sets
forth the terms and conditions of a loan (the “Syndicated Loan”) to Syndicated
Borrowers for the reinstatement, renewal, extension and modification of the
Original Syndicated Loan.  The Syndicated Loan is secured in part by the Deeds
of Trust (as defined in the Syndicated Loan Agreement), and which are referred
to herein as the “Syndicated Deeds of Trust”.

 

Also, pursuant to the Plan and the Order, Theater Administrative Agent, Theater
Lender and Syndicated Borrowers have entered into, are entering into
concurrently herewith, or contemplate entering into, that certain Loan
Modification Agreement dated of even date herewith (the “Theater Loan
Modification Agreement”, and the Original Theater Loan Agreement, as modified by
the Theater Loan Modification Agreement, and as the same may have hereafter be
modified, supplemented, restated, extended, or renewed and in effect from time
to time, the “Theater Loan Agreement”), which Theater Loan Modification
Agreement modifies the terms and conditions of the Original Theater Loan (such
Original Theater Loan, as modified by the Theater Loan Modification Agreement,
the “Theater Loan”).  The Theater Loan is secured in part by the Original Deed
of Trust (as defined in the Theater Loan Modification Agreement), and which, as
modified by the Theater Loan Modification Agreement is referred to herein as the
“Theater Deed of Trust”.

 

The Syndicated Loan is or will be also evidenced by those certain Reinstated,
Renewal, Modification and Extension Promissory Notes dated or to be dated the
date of the Syndicated Loan Agreement, issued or to be issued by Syndicated
Borrowers pursuant to the Syndicated Loan Agreement in the aggregate principal
amount of $26,962,923.49 (such notes, as they may hereafter be renewed,
extended, supplemented, increased or modified and in effect from time to time,
and all other notes given in substitution therefor in accordance with the
Syndicated Loan Agreement, or in modification, renewal, or extension thereof, in
whole or in part, are herein collectively called the “Syndicated Note”; this
Guaranty, Syndicated Loan Agreement,

 

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Syndicated Note, Syndicated Deeds of Trust, and all other documents now or
hereafter securing, guaranteeing or executed by Syndicated Borrowers or
Guarantor in connection with the Syndicated Loan are, as the same have been or
may be amended, restated, modified or supplemented from time to time, hereafter
referred to collectively as the “Syndicated Loan Documents”).

 

The Theater Loan is or will be also evidenced by the Original Theater Note, as
modified by the Theater Loan Modification Agreement (such Original Theater Note,
as modified by the Theater Loan Modification Agreement, and as the same may be
renewed, extended, supplemented, increased or modified and in effect from time
to time, and all other notes given in substitution therefor in accordance with
the Theater Loan Agreement, or in modification, renewal, or extension thereof,
in whole or in part, are herein collectively called the “Theater Note”; this
Guaranty, Theater Loan Agreement, Theater Note, Theater Deed of Trust, and all
other documents now or hereafter securing, guaranteeing or executed by Theater
Borrower or Guarantor in connection with the Theater Loan are, as the same have
been or may be amended, restated, modified or supplemented from time to time,
hereafter referred to collectively as the “Theater Loan Documents”), and such
Theater Loan Modification Agreement provides that the outstanding principal
amount of the Theater Loan is $4,981,578.39.

 

The Syndicated Administrative Agent and the Theater Administrative Agent are
referred to collectively herein as “Administrative Agent”; Syndicated Borrowers
are referred to collectively herein as the “Borrowers” and each, a “Borrower”;
the Syndicated Loan Agreement and the Theater Loan Agreement are referred to
collectively herein as the “Loan Agreement”; the Syndicated Loan and the Theater
Loan are referred to collectively herein as the “Loan”; the Syndicated Deeds of
Trust and the Theater Deed of Trust are referred to collectively herein as the
“Deed of Trust”; the Syndicated Note and the Theater Note are referred to
collectively as the “Note”; the Syndicated Loan Documents and the Theater Loan
Documents are referred to collectively herein as the “Loan Documents”.

 

A condition precedent to the effectiveness of the Loan Agreement is Guarantor’s
execution and delivery to Administrative Agent of this Guaranty.

 

Any capitalized term used and not defined in this Guaranty shall have the
meaning given to such term in the Loan Agreement.  This Guaranty is one of the
Loan Documents described in the Loan Agreement.

 

STATEMENT OF AGREEMENTS

 

For good and valuable consideration, the receipt, sufficiency and adequacy of
which are hereby acknowledged, and as a material inducement to Lenders to enter
into the Loan Agreement, Guarantor hereby guarantees to Administrative Agent and
the Lenders the prompt and full payment of the indebtedness and obligations
described below in this Guaranty (such indebtedness and obligations owed by
Syndicated Borrowers, the “Syndicated Guaranteed Obligations”; such indebtedness
and obligations owed by Theater Borrower, the “Theater Guaranteed Obligations”;
the Syndicated Guaranteed Obligations and the Theater Guaranteed Obligations are
referred to collectively herein as the “Guaranteed Obligations”), upon the
following terms and conditions:

 

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1.                                      Guaranty of Payment.

 

(a)                                 Subject to the provisions of Section 2 of
this Guaranty, including the Guaranteed Obligations Cap, Guarantor hereby
unconditionally and irrevocably guarantees to Administrative Agent and the
Lenders the full, complete and punctual payment when due, whether by lapse of
time, by acceleration of, maturity, or otherwise, of the following (collectively
called, the “Indebtedness”):

 

(i)                                     the Principal Liability Amount (as
defined below); plus

 

(ii)                                  the Accrued Interest Amount (as defined
below); plus

 

(iii)                               the Personal Liability Amount (as defined
below); plus

 

(iv)                              all costs, expenses, and other sums of money
now or hereafter due and owing, arising out of or relating to the enforcement of
this Guaranty.

 

This Guaranty covers the Indebtedness, whether presently outstanding or arising
subsequent to the date hereof.  The guaranty of Guarantor set forth in this
Section 1 is a continuing guaranty of payment and not a guaranty of collection,
provided, however that Guarantor’s obligations and liability under this Guaranty
shall be limited to payment only, and, with that exception, Guarantor shall have
no obligation to perform under the Syndicated Loan Agreement, the Theater Loan
Agreement, or any other Loan Document.  For purposes of determining Guarantor’s
liability hereunder with respect to the Principal Liability Amount, to the
extent any Lender receives any payments under the Note or receives any proceeds
from foreclosure of or other realization upon any of the security for the Note
(including proceeds from foreclosure), except as expressly provided in Section 2
of this Guaranty, such payments or proceeds shall first be applied to that
portion of the Indebtedness for which Guarantor has no liability for payment,
and shall then (and only after payment in full of the portion of the Obligations
for which Guarantor has no liability for payment) be applied against the portion
of the Indebtedness for whose payment Guarantor is liable.

 

(b)                                 Unless otherwise defined herein, the
following capitalized terms when used in this Guaranty shall have the respective
meanings set forth below:

 

“Accrued Interest Amount” means all accrued and unpaid interest on the
Indebtedness as of the Satisfaction Date (as defined below).

 

“Demand for Payment Notice” means a writing from Administrative Agent to
Guarantor setting forth all amounts owed by Guarantor under this Guaranty as of
a certain date.

 

“Personal Liability Amount” means all damages, losses, costs and expenses
suffered or incurred by Administrative Agent and/or either of the Lenders as a
result of (i) fraud by any Borrower, Guarantor or any employee of any Borrower
or Guarantor or any agent of any Borrower or Guarantor if acting at the
direction of any Borrower, Guarantor or any employee or principal of Borrowers
or Guarantor; (ii) any untruth or

 

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inaccuracy in any material respect, which untruth or inaccuracy was known to
Borrowers when delivered, of any instrument or information delivered to
Administrative Agent or any Lender by or on behalf of Borrowers as a condition
to or in connection with the execution of the Loan Agreement or to satisfy any
condition set forth in the Loan Agreement or in any Loan Document; (iii) any
representation or warranty of Borrowers that is knowingly untrue or inaccurate
in any material respect or knowingly fails to include any fact or information
necessary to keep the information contained therein from being materially
misleading; (iv) the misapplication or misuse by Borrowers or anyone acting for
or on behalf of Borrowers (in the case of an agent, at the direction of any
Borrower, Guarantor, or any employee, officer, director or principal of any
Borrower or Guarantor) of any insurance proceeds or condemnation awards, or any
Loan proceeds, contrary to the terms of the Loan Agreement; (v) following
written notice of a Default, the failure of Borrowers to apply all revenues,
rents, issues, accounts, profits, accounts receivable and income of Borrowers to
the normal operating expenses of any of the properties making up the Property
(as defined in each Deed of Trust) (which expenses shall not include the payment
of any legal fees other than those incurred by Borrower in the ordinary course
of operating the Property (e.g., legal fees incurred in connection with lease
negotiations) and shall expressly exclude legal fees incurred in connection with
litigation or other actions against any of the Lenders, unless first approved in
writing by Administrative Agent or expenses or overhead of any direct or
indirect owner of Borrowers, or Guarantor) and/or any payments due under the
Loan; (vi) [intentionally deleted]; (vii) all costs, expenses and fees
including, but not limited to, court costs and reasonable attorneys’ fees, costs
and expenses, arising in connection with any proceedings under Debtor Relief
Laws applicable to Borrowers or Guarantor; (viii) failure of Borrowers to pay
all taxes and general and special assessments relating to any of the properties
making up the Property; and (ix) a casualty affecting any of the properties
making up the Property to the extent such casualty was not covered by insurance
because Borrowers failed to carry the insurance required by the Loan Documents
or because Borrowers failed to pay in full the losses arising from such casualty
under any plan of self-insurance of Borrowers.

 

“Principal Liability Amount” means, as of any date, 100% of the outstanding
principal balance of the Loan.

 

“Satisfaction Date” means the date on which Guarantor pays to Administrative
Agent, for the ratable benefit of the Lenders, the Principal Liability Amount
and all other sums which are owed by Guarantor under this Guaranty as of such
date.

 

2.                                      Guaranteed Obligations Cap. 
Notwithstanding anything contained in this Guaranty to the contrary, the
aggregate amount payable by Guarantor under this Guaranty or otherwise with
respect to the Guaranteed Obligations shall be limited to and shall not exceed
(i) an initial amount equal to $11,180,575.66 (such amount, as the same may be
from time to time reduced as hereinafter set forth, the “Guaranteed Obligations
Cap”), which such initial amount equals thirty-five percent (35%) of the
aggregate principal balances of the Indebtedness as of the date of this
Guaranty, and (ii) any attorneys’ fees or costs of collection permitted under
Section 12 of this Guaranty.  For any voluntary payments made to reduce the
Indebtedness that is in excess of payments to Administrative Agent, on behalf of
any one or more of the Lenders, required by the

 

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Loan Documents (“Voluntary Payments”), the Guaranteed Obligations Cap shall be
reduced $1.40 for every $1.00 of Voluntary Payments made after the date of this
Guaranty but on or before March 31, 2013, and, commencing April 1, 2013 and
thereafter, the Guaranteed Obligations Cap shall be reduced $1.00 for every
$1.00 of Voluntary Payments made by or on behalf of any of the Borrowers to
Administrative Agent, on behalf of any one or more of the Lenders.  Voluntary
Payments do not include (i) payments made by Borrowers due to the sale of any of
the Collateral (as defined in the Loan Agreement), or (ii) any other payments
made pursuant to any of the Loan Documents, including the Note. The Guaranteed
Obligations shall, at no time, exceed the aggregate unpaid principal balance of
the Loan plus any attorneys’ fees or costs of collection incurred by
Administrative Agent, on behalf of any of the Lenders, in the enforcement or
preservation of the Lenders’ rights under this Guaranty, as provided in
Section 12.

 

3.                                      Primary Liability of Guarantor.

 

(a)                                 This Guaranty is an absolute, irrevocable
and unconditional guaranty of payment.  Guarantor shall be liable for the
payment of the Guaranteed Obligations, to the extent set forth in Section 2, as
a primary obligor.  This Guaranty shall be effective as a waiver of, and
Guarantor hereby expressly waives, any and all rights to which Guarantor may
otherwise have been entitled under any suretyship laws in effect from time to
time, including any right or privilege, whether existing under statute, at law
or in equity, to require Administrative Agent, on behalf of the Lenders, to take
prior recourse or proceedings against any Collateral, security or Person
(hereinafter defined) whatsoever.

 

(b)                                 Liability of Guarantor for Syndicated
Guaranteed Obligations.

 

(i)                                     Guarantor hereby agrees that upon the
occurrence of a Syndicated Event of Default (being an “Event of Default” as
defined in the Syndicated Loan Agreement), the Syndicated Guaranteed
Obligations, for purposes of this Guaranty, shall be deemed immediately due and
payable at the election of Syndicated Administrative Agent (with the consent of
the Syndicated Lenders, as appropriate or applicable), and Guarantor shall,
within 10 days after written demand therefor is given by Syndicated
Administrative Agent to Guarantor as provided in Section 16 of this Guaranty and
without presentment, protest, notice of protest, further notice of nonpayment or
of dishonor, default or nonperformance, or notice of acceleration or of intent
to accelerate, or any other notice whatsoever, without any notice having been
given to Guarantor previous to such demand of the acceptance by Syndicated
Administrative Agent of this Guaranty, and without any notice having been given
to Guarantor previous to such demand of the creating or incurring of such
Indebtedness or of such obligation to perform, all such notices being hereby
waived by Guarantor, pay the full amount of the Syndicated Guaranteed
Obligations then due (subject to the Guaranteed Obligations Cap as determined
under Section 2 of this Guaranty) to Syndicated Administrative Agent for the
account of the Syndicated Lenders, whether or not suit is filed thereon, or
whether at maturity or by acceleration, or whether in connection with
bankruptcy, insolvency or appeal.  It shall not be necessary for Syndicated
Administrative Agent, on behalf of the Syndicated Lenders, in order to enforce
such payment by Guarantor, first to institute suit or

 

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pursue or exhaust any rights or remedies against Syndicated Borrowers or others
liable on such Indebtedness or for performance under the Syndicated Loan
Documents, or to enforce any rights against any security that shall ever have
been given to secure such Indebtedness or such performance, or to join
Syndicated Borrowers or any others liable for the payment of the Syndicated
Guaranteed Obligations or any part thereof, in any action to enforce this
Guaranty, or to resort to any other means of obtaining payment of the Syndicated
Guaranteed Obligations or performance under the Syndicated Loan Documents;
provided, however, that nothing herein contained shall prevent Syndicated
Administrative Agent or any of the Syndicated Lenders from suing on the
Syndicated Note or foreclosing the Syndicated Deeds of Trust or from exercising
any other rights thereunder, and if such foreclosure or other remedy is availed
of, only the net proceeds therefrom, after deduction of all charges and expenses
of every kind and nature whatsoever, shall be applied in reduction of the amount
due on the Syndicated Note and Syndicated Deeds of Trust, and Syndicated
Administrative Agent and the Syndicated Lenders shall not be required to
institute or prosecute proceedings to recover any deficiency as a condition of
payment hereunder or enforcement hereof.  At any sale of the Collateral given
for the Indebtedness or any part thereof, whether by foreclosure or otherwise,
any Syndicated Lender may at its discretion purchase all or any part of the
Collateral so sold or offered for sale for its own account and may, in payment
of the amount bid therefor, deduct such amount from the balance due it pursuant
to the terms of the Syndicated Note and Syndicated Deeds of Trust.

 

(ii)                                  Suit may be brought or demand may be made
against Syndicated Borrowers or against all parties who have signed this
Guaranty or any other guaranty covering all or any part of the Syndicated
Guaranteed Obligations, or against any one or more of them, separately or
together, without impairing the rights of Syndicated Administrative Agent and
the Syndicated Lenders against any party hereto.

 

(c)                                  Liability of Guarantor for Theater
Guaranteed Obligations.

 

(i)                                     Guarantor hereby agrees that upon the
occurrence of a Theater Event of Default (being an “Event of Default” as defined
in the Theater Loan Agreement), the Theater Guaranteed Obligations, for purposes
of this Guaranty, shall be deemed immediately due and payable at the election of
Theater Administrative Agent (with the consent of the Theater Lender, as
appropriate or applicable), and Guarantor shall, within 10 days after written
demand therefor is given by Theater Administrative Agent to Guarantor as
provided in Section 16 of this Guaranty and without presentment, protest, notice
of protest, further notice of nonpayment or of dishonor, default or
nonperformance, or notice of acceleration or of intent to accelerate, or any
other notice whatsoever, without any notice having been given to Guarantor
previous to such demand of the acceptance by Theater Administrative Agent of
this Guaranty, and without any notice having been given to Guarantor previous to
such demand of the creating or incurring of such Indebtedness or of such
obligation to perform, all such notices being hereby

 

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waived by Guarantor, pay the full amount of the Theater Guaranteed Obligations
then due (subject to the Guaranteed Obligations Cap as determined under
Section 2 of this Guaranty) to Theater Administrative Agent for the account of
the Theater Lender, whether or not suit is filed thereon, or whether at maturity
or by acceleration, or whether in connection with bankruptcy, insolvency or
appeal.  It shall not be necessary for Theater Administrative Agent, on behalf
of the Theater Lender, in order to enforce such payment by Guarantor, first to
institute suit or pursue or exhaust any rights or remedies against Theater
Borrower or others liable on such Indebtedness or for performance under the
Theater Loan Documents, or to enforce any rights against any security that shall
ever have been given to secure such Indebtedness or such performance, or to join
Theater Borrower or any others liable for the payment of the Theater Guaranteed
Obligations or any part thereof, in any action to enforce this Guaranty, or to
resort to any other means of obtaining payment of the Theater Guaranteed
Obligations or performance under the Theater Loan Documents; provided, however,
that nothing herein contained shall prevent Theater Administrative Agent or the
Theater Lender from suing on the Theater Note or foreclosing the Theater Deed of
Trust or from exercising any other rights thereunder, and if such foreclosure or
other remedy is availed of, only the net proceeds therefrom, after deduction of
all charges and expenses of every kind and nature whatsoever, shall be applied
in reduction of the amount due on the Theater Note and Theater Deed of Trust,
and Theater Administrative Agent and the Theater Lender shall not be required to
institute or prosecute proceedings to recover any deficiency as a condition of
payment hereunder or enforcement hereof.  At any sale of the Collateral given
for the Indebtedness or any part thereof, whether by foreclosure or otherwise,
any Theater Lender may at its discretion purchase all or any part of the
Collateral so sold or offered for sale for its own account and may, in payment
of the amount bid therefor, deduct such amount from the balance due it pursuant
to the terms of the Theater Note and Theater Deed of Trust.

 

(ii)                                  Suit may be brought or demand may be made
against Theater Borrower or against all parties who have signed this Guaranty or
any other guaranty covering all or any part of the Theater Guaranteed
Obligations, or against any one or more of them, separately or together, without
impairing the rights of Theater Administrative Agent and the Theater Lender
against any party hereto.

 

(d)                                 If, under Section 3(b), Syndicated
Administrative Agent makes a demand for payment on Guarantor for the Syndicated
Guaranteed Obligations, and, under Section 3(c), Theater Administrative Agent
makes a demand for payment on Guarantor for the Theater Guaranteed Obligations,
then payments made by Guarantor for the Guaranteed Obligations shall be applied
to the Loan by the Administrative Agent in its sole discretion.

 

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4.                                      Certain Agreements and Waivers by
Guarantor.

 

(a)                                 Guarantor hereby agrees that neither the
Lenders’ rights or remedies nor Guarantor’s obligations under the terms of this
Guaranty shall be released, diminished, impaired, reduced or affected by any one
or more of the following events, actions, facts, circumstances or rights, and
the liability of Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:

 

(i)                                     any limitation of liability or recourse
in any other Loan Document or arising under any law;

 

(ii)                                  any claim or defense that this Guaranty
was made without consideration or is not supported by adequate consideration;

 

(iii)                               the taking or accepting of any other
security or guaranty for, or right of recourse with respect to, any or all of
the Guaranteed Obligations;

 

(iv)                              any homestead exemption or any other exemption
under applicable Law;

 

(v)                                 any release, surrender, abandonment,
exchange, alteration, sale or other disposition, subordination, deterioration,
waste, failure to protect or preserve, impairment, or loss of, or any failure to
create or perfect any lien or security interest with respect to, or any other
dealings with, any collateral or security at any time existing or purported,
believed or expected to exist in connection with any or all of the Guaranteed
Obligations, including any impairment of Guarantor’s recourse against any Person
or collateral;

 

(vi)                              whether express or by operation of law, any
partial release of the liability of Guarantor hereunder, or if one or more other
guaranties are now or hereafter obtained by the Lenders covering all or any part
of the Guaranteed Obligations, any complete or partial release of any one or
more of such guarantors under any such other guaranty, or any complete or
partial release of Borrowers or any other party liable, directly or indirectly,
for the payment or performance of any or all of the Guaranteed Obligations;

 

(vii)                           the death, insolvency, bankruptcy, disability,
dissolution, liquidation, termination, receivership, reorganization, merger,
consolidation, change of form, structure or ownership, sale of all assets, or
lack of corporate, partnership or other power of Borrowers or any other party at
any time liable for the payment or performance of any or all of the Guaranteed
Obligations;

 

(viii)                        either with or without notice to or consent of
Guarantor: any renewal, extension, modification, supplement, subordination or
rearrangement of the terms of any or all of the Guaranteed Obligations and/or
any of the Loan Documents, including, without limitation, material alterations
of the terms of payment (including changes in maturity date(s) and interest
rate(s)) or performance or any other terms thereof, or any waiver, termination,
or release of,

 

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or consent to departure from, any of the Loan Documents or any other guaranty of
any or all of the Guaranteed Obligations, or any adjustment, indulgence,
forbearance, or compromise that may be granted from time to time by
Administrative Agent, on behalf of the Lenders, to Borrowers, Guarantor, and/or
any other Person at any time liable for the payment or performance of any or all
of the Guaranteed Obligations;

 

(ix)                              any neglect, lack of diligence, delay,
omission, failure, or refusal of Administrative Agent, on behalf of the Lenders,
to take or prosecute (or in taking or prosecuting) any action for the collection
or enforcement of any of the Guaranteed Obligations, or to foreclose or take or
prosecute any action to foreclose (or in foreclosing or taking or prosecuting
any action to foreclose) upon any security therefor, or to exercise (or in
exercising) any other right or power with respect to any security therefor, or
to take or prosecute (or in taking or prosecuting) any action in connection with
any Loan Document, or any failure to sell or otherwise dispose of in a
commercially reasonable manner any collateral securing any or all of the
Guaranteed Obligations;

 

(x)                                 any failure of Administrative Agent, on
behalf of the Lenders, to notify Guarantor of any creation, renewal, extension,
rearrangement, modification, supplement, subordination, or assignment of the
Guaranteed Obligations or any part thereof, or of any Loan Document, or of any
release of or change in any security, or of any other action taken or refrained
from being taken by Administrative Agent, on behalf of the Lenders, against
Borrowers or any security or other recourse, or of any new agreement between
Administrative Agent, for the Lenders, and Borrowers, it being understood that
unless otherwise expressly provided for in this Guaranty, the Lenders shall not
be required to give Guarantor any notice of any kind under any circumstances
with respect to or in connection with the Guaranteed Obligations, any and all
rights to notice Guarantor may have otherwise had being hereby waived by
Guarantor, and Guarantor shall be responsible for obtaining for itself
information regarding the Borrowers, including, but not limited to, any changes
in the business or financial condition of Borrowers, and Guarantor acknowledges
and agrees that the Administrative Agent and the Lenders shall have no duty to
notify Guarantor of any information which the Administrative Agent and the
Lenders may have concerning Borrowers.

 

(xi)                              if for any reason any Lender is required to
refund any payment by Borrowers to any other party liable for the payment or
performance of any or all of the Guaranteed Obligations or pay the amount
thereof to someone else;

 

(xii)                           the making of advances by Administrative Agent,
on behalf of the Lenders, to protect the interest of the Lenders in the
Property, preserve the value of the Property, or for the purpose of performing
any term or covenant contained in any of the Loan Documents;

 

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(xiii)                        the existence of any claim, counterclaim, set-off
or other right that Guarantor may at any time have against Borrowers,
Administrative Agent, any Lender, or any other Person, whether or not arising in
connection with this Guaranty, the Note, the Loan Agreement, or any other Loan
Document;

 

(xiv)                       the unenforceability of all or any part of the
Guaranteed Obligations against all or any of the Borrowers, whether because the
Guaranteed Obligations exceed the amount permitted by law or violate any usury
law, or because the act of creating the Guaranteed Obligations, or any part
thereof, is ultra vires, or because the officers or Persons creating the
Guaranteed Obligations acted in excess of their authority, or because of a lack
of validity or enforceability of or defect or deficiency in any of the Loan
Documents, or because any Borrower has any valid defense, claim or offset with
respect thereto, or because such Borrower’s obligation ceases to exist by
operation of law, or because of any other reason or circumstance, it being
agreed that Guarantor shall remain liable hereon regardless of whether such
Borrower or any other Person be found not liable on the Guaranteed Obligations,
or any part thereof, for any reason (and regardless of any joinder of such
Borrower or any other party in any action to obtain payment or performance of
any or all of the Guaranteed Obligations); or

 

(xv)                          any order, ruling or plan of reorganization
emanating from proceedings under Title 11 of the United States Code with respect
to Borrowers or any other Person, including any extension, reduction,
composition, or other alteration of the Guaranteed Obligations, whether or not
consented to by Administrative Agent and the Lenders.

 

(b)                                 In the event any payment by any Borrower or
any other Person to any Lender 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 any Lender is required to refund such payment or
pay the amount thereof to any other party, such payment by Borrowers or any
other party to any Lender shall not constitute a release of Guarantor from any
liability hereunder, and this Guaranty shall continue to be effective or shall
be reinstated (notwithstanding any prior release, surrender or discharge by the
Lenders of this Guaranty or of Guarantor), as the case may be, with respect to,
and this Guaranty shall apply to, any and all amounts so refunded by any such
Lender or paid by any such Lender to another Person (which amounts shall
constitute part of the Guaranteed Obligations), and any interest paid by any
such Lender and any attorneys’ fees, costs and expenses paid or incurred by
Lender in connection with any such event.  It is the intent of Guarantor and the
Lenders that the obligations and liabilities of Guarantor hereunder are absolute
and unconditional under any and all circumstances and that until the Guaranteed
Obligations 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 Guaranty, be deemed a legal or
equitable discharge or release of a guarantor.  Administrative Agent, on behalf
of the Lenders, shall be entitled to continue to hold this Guaranty in its
possession for the longer of (i) the period after which any performance of
obligations under the Loan Agreement shall accrue, or (ii) a period of one

 

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year from the date the Guaranteed Obligations are paid and performed in full and
for so long thereafter as may be necessary to enforce any obligation of
Guarantor hereunder and/or to exercise any right or remedy of the Lenders
hereunder.

 

(c)                                  If acceleration of the time for payment of
any amount payable by Borrowers under the Note, the Loan Agreement, or any other
Loan Document that constitutes any of the Guaranteed Obligations is stayed or
delayed by any law or tribunal, all such amounts shall nonetheless be payable by
Guarantor within 10 days after written demand therefor is given by
Administrative Agent to Guarantor as provided in Section 16 of this Guaranty.

 

5.                                      Reserved.

 

6.                                      Subordination.  If, for any reason
whatsoever, any Borrower is now or hereafter becomes indebted to Guarantor:

 

(a)                                 such indebtedness and all interest thereon
and all liens, security interests and rights now or hereafter existing with
respect to property of such Borrower securing such indebtedness shall, at all
times, be subordinate in all respects to the Guaranteed Obligations and to all
liens, security interests and rights now or hereafter existing to secure the
Guaranteed Obligations;

 

(b)                                 Guarantor shall not be entitled to enforce
or receive payment, directly or indirectly, of any such indebtedness of such
Borrower to Guarantor (other than trade payables or other customary expenses
incurred in the ordinary course of business) until the Guaranteed Obligations
have been fully and finally paid and performed;

 

(c)                                  Guarantor hereby assigns and grants to
Administrative Agent, on behalf of the Lenders, a security interest in all such
indebtedness and security therefor, if any, of such Borrower to Guarantor now
existing or hereafter arising by reason of any payment by Guarantor in respect
of the Guaranteed Obligations or the Loan, including any dividends and payments
pursuant to debtor relief or insolvency proceedings referred to below.  In the
event of receivership, bankruptcy, reorganization, arrangement or other debtor
relief or insolvency proceedings involving such Borrower as debtor,
Administrative Agent, on behalf of the Lenders, shall have the right to prove
its claim in any such proceeding so as to establish its rights hereunder and
shall have the right to receive directly from the receiver, trustee or other
custodian (whether or not a Default shall have occurred or be continuing under
any of the Loan Documents), dividends and payments that are payable upon any
obligation of such Borrower to Guarantor now existing or hereafter arising, and
to have all benefits of any security therefor, until the Guaranteed Obligations
have been fully and finally paid and performed.If, notwithstanding the foregoing
provisions, Guarantor should receive any payment, claim or distribution that is
prohibited as provided above in this Section 6, Guarantor shall pay the same to
Administrative Agent, on behalf of the Lenders, immediately, Guarantor hereby
agreeing that it shall receive the payment, claim or distribution in trust for
Administrative Agent, on behalf of the Lenders, and shall have absolutely no
dominion over the same except to pay it immediately to Administrative Agent; and

 

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(d)                                 Guarantor shall promptly upon request of
Administrative Agent from time to time execute such documents and perform such
acts as Administrative Agent may require to evidence and perfect its interest
and to permit or facilitate exercise of its rights under this Section 6,
including, but not limited to, execution and delivery of financing statements,
proofs of claim, further assignments and security agreements, and delivery to
Administrative Agent of any promissory notes or other instruments evidencing
indebtedness of such Borrower to Guarantor.  All promissory notes, accounts
receivable ledgers or other evidences, now or hereafter held by Guarantor, of
obligations of such Borrower to Guarantor shall contain a specific written
notice thereon that the indebtedness evidenced thereby is subordinated under and
is subject to the terms of this Guaranty.

 

7.                                      Other Liability of Guarantor or
Borrowers.  If Guarantor is or becomes liable, by endorsement or otherwise, for
any indebtedness owing by Borrowers to Administrative Agent and the Lenders
other than under this Guaranty, such liability shall not be in any manner
impaired or affected hereby, and the rights of Administrative Agent and the
Lenders hereunder shall be cumulative of any and all other rights that
Administrative Agent and the Lenders may have against Guarantor.  If any
Borrower is or becomes indebted to Lenders for any indebtedness other than or in
excess of the Indebtedness for which Guarantor is liable under this Guaranty,
any payment received or recovery realized upon such other indebtedness of such
Borrower to the Lenders may, except to the extent paid by Guarantor on the
Indebtedness or specifically required by law or agreement of Administrative
Agent to be applied to the Indebtedness, in Administrative Agent’s sole
discretion, be applied upon indebtedness of such Borrower to the Lenders other
than the Indebtedness.  Notwithstanding the foregoing, it is expressly
acknowledged and agreed that this Guaranty is an amendment and full restatement
of the Original Guaranty Agreement as to the obligations of Guarantor only, and
supersedes and replaces the Original Guaranty Agreement as it applies to
Guarantor.

 

8.                                      Assigns.  This Guaranty is for the
benefit of Administrative Agent and the Lenders and their successors and
assigns, and in the event of an assignment of the Guaranteed Obligations, or any
part thereof, the rights and benefits hereunder, to the extent applicable to the
Guaranteed Obligations so assigned, may be transferred with such Guaranteed
Obligations.  Guarantor waives notice of any transfer or assignment of the
Guaranteed Obligations, or any part thereof, and agrees that failure to give
notice of any such transfer or assignment will not affect the liabilities of
Guarantor hereunder.

 

9.                                      Binding Effect.  This Guaranty is
binding not only on Guarantor, but also on Guarantor’s successors and assigns.

 

10.                               Governing Law; Forum; Consent to
Jurisdiction.  The validity, enforcement, and interpretation of this Guaranty,
shall for all purposes be governed by and construed in accordance with the laws
of the State of Texas and applicable United States federal law, and is intended
to be performed in accordance with, and only to the extent permitted by, such
laws.  All obligations of Guarantor hereunder are payable and performable at the
place or places where the Guaranteed Obligations are payable and performable. 
Guarantor hereby irrevocably submits generally and unconditionally for Guarantor
and in respect of Guarantor’s property to the nonexclusive jurisdiction of any
court of the State of Texas, or any United States federal court,

 

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sitting in the County of Dallas, State of Texas and to the jurisdiction of any
state or United States federal court sitting in the County of Dallas, State of
Texas, over any suit, action or proceeding arising out of or relating to this
Guaranty or the Guaranteed Obligations.  Guarantor hereby irrevocably waives, to
the fullest extent permitted by law, any objection that Guarantor may now or
hereafter have to the laying of venue in any such court and any claim that any
such court is an inconvenient forum.  Final judgment in any such suit, action or
proceeding brought in any such court shall be conclusive and binding upon
Guarantor and may be enforced in any court in which Guarantor is subject to
jurisdiction.  Guarantor hereby agrees and consents that, in addition to any
methods of service of process provided for under applicable law, all service of
process in any such suit, action or proceeding in any state court, or any United
States federal court, sitting in the State of Texas may be made by certified or
registered mail, return receipt requested, directed to Guarantor at the address
set forth at the end of this Guaranty, or at a subsequent address of which
Administrative Agent receives actual notice from Guarantor in accordance with
the notice provisions hereof, and service so made shall be complete five
(5) days after the same shall have been so mailed.  Nothing herein shall affect
the right of Administrative Agent to serve process in any manner permitted by
law or limit the right of Administrative Agent, on behalf of the Lenders, to
bring proceedings against Guarantor in any other court or jurisdiction. 
Guarantor hereby releases, to the extent permitted by applicable law, all errors
and all rights of exemption, appeal, stay of execution, inquisition, and other
rights to which Guarantor may otherwise be entitled under the laws of the United
States of America or any State or possession of the United States of America now
in force or which may hereinafter be enacted.  The authority and power to appear
for and enter judgment against Guarantor shall not be exhausted by one or more
exercises thereof or by any imperfect exercise thereof and shall not be
extinguished by any judgment entered pursuant thereto.  Such authority may be
exercised on one or more occasions or from time to time in the same or different
jurisdiction as often as the Administrative Agent shall deem necessary and
desirable.

 

11.                               Invalidity of Certain Provisions.  If any
provision of this Guaranty or the application thereof to any Person or
circumstance shall, for any reason and to any extent, be declared to be invalid
or unenforceable, neither the remaining provisions of this Guaranty nor the
application of such provision to any other Person or circumstance shall be
affected thereby, and the remaining provisions of this Guaranty, or the
applicability of such provision to other Persons or circumstances, as
applicable, shall remain in effect and be enforceable to the maximum extent
permitted by applicable law.

 

12.                               Attorneys’ Fees and Costs of Collection. 
Guarantor shall pay on demand all attorneys’ fees and all other costs and
expenses incurred by Administrative Agent, on behalf of the Lenders, in the
enforcement of or preservation of the Lenders’ rights under this Guaranty
including, without limitation, all attorneys’ fees and expenses, investigation
costs, and all court costs, whether or not suit is filed hereon, or whether at
maturity or by acceleration, or whether before or after maturity, or whether in
connection with bankruptcy, insolvency or appeal.  Subject to the provisions of
Section 2 of the Guaranty, Guarantor agrees to pay interest on any expenses or
other sums due to Administrative Agent under this Section 12 that are not paid
within 10 days after written demand therefor is given by Administrative Agent to
Guarantor as provided in Section 16 of this Guaranty, at a rate per annum equal
to the Past Due Rate.

 

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13.                               Payments.  All sums payable under this
Guaranty shall be paid in lawful money of the United States of America that at
the time of payment is legal tender for the payment of public and private debts.

 

14.                               Controlling Agreement.  It is not the
intention of Administrative Agent, the Lenders or Guarantor to obligate
Guarantor to pay interest in excess of that lawfully permitted to be paid by
Guarantor under applicable law.  Should it be determined that any portion of the
Guaranteed Obligations or any other amount payable by Guarantor under this
Guaranty constitutes interest in excess of the maximum amount of interest that
Guarantor, in Guarantor’s capacity as guarantor, may lawfully be required to pay
under applicable law, the obligation of Guarantor to pay such interest shall
automatically be limited to the payment thereof in the maximum amount so
permitted under applicable law.  The provisions of this Section 14 shall
override and control all other provisions of this Guaranty and of any other
agreement between Guarantor, Administrative Agent, and the Lenders.

 

15.                               Representations, Warranties, and Covenants of
Guarantor.  Guarantor hereby represents, warrants, and covenants to
Administrative Agent and the Lenders that (a) Guarantor owns, directly or
indirectly, an interest in Borrowers and will derive a material and substantial
benefit, directly or indirectly, from the making of the Loan to Borrowers and
from the making of this Guaranty by Guarantor; (b) this Guaranty is duly
authorized and valid, and is binding upon and enforceable against Guarantor;
(c) Guarantor is not, and the execution, delivery and performance by Guarantor
of this Guaranty will not cause Guarantor to be, in violation of any law or in
default (or at risk of acceleration of indebtedness) under any agreement or
restriction by which such Guarantor is bound or affected; (d) Guarantor is duly
organized, validly existing, and in good standing under the laws of the state of
its organization and has full power and authority to enter into and perform this
Guaranty; (e) Guarantor will indemnify Administrative Agent and the Lenders from
any loss, cost or expense as a result of any representation or warranty of
Guarantor being false, incorrect, incomplete or misleading in any material
respect; (f) except as disclosed to Administrative Agent in writing, there is no
litigation pending or, to the knowledge of Guarantor, threatened before or by
any tribunal against or affecting Guarantor that would have a material impact on
Guarantor (for purposes of this subsection, “material” shall mean that the
amount in controversy shall be in excess of ten percent (10%) of the Guarantor’s
total assets); (g) all financial statements and such information hereafter
furnished to Administrative Agent by Guarantor will, fairly and accurately
present in all material respects the financial condition of Guarantor as of
their dates and the results of Guarantor’s operations for the periods therein
specified; (h) after giving effect to this Guaranty, Guarantor is solvent, is
not engaged or about to engage in business or a transaction for which the
property of Guarantor is an unreasonably small capital, and does not intend to
incur or believe that it will incur debts that will be beyond its ability to pay
as such debts mature; (i) neither Administrative Agent nor the Lenders have any
duty at any time to investigate or inform Guarantor of the financial or business
condition or affairs of Borrowers or any change therein, and Guarantor will keep
fully apprised of each Borrower’s financial and business condition;
(j) Guarantor acknowledges and agrees that Guarantor may be required to make
payments with respect to the Guaranteed Obligations as provided in this Guaranty
without assistance or support from Borrowers or any other Person; and
(k) Guarantor has read and fully understands the provisions contained in the
Note, the Loan Agreement, the Deed of Trust, and the other Loan Documents. 
Guarantor’s representations, warranties and covenants are a material inducement
to Administrative Agent and the Lenders to enter into the other Loan Documents
and

 

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transactions contemplated thereby and shall survive the execution hereof and any
bankruptcy, foreclosure, transfer of security or other event affecting
Borrowers, Guarantor, any other party, or any security for all or any part of
the Guaranteed Obligations.

 

16.                               Notices.  All notices, requests, consents,
demands and other communications required or which any party desires to give
hereunder or under any other Loan Document shall be in writing and, unless
otherwise specifically provided in such other Loan Document, shall be deemed
sufficiently given or furnished if delivered by personal delivery, by courier,
or by registered or certified United States mail, postage prepaid, addressed to
the party to whom directed at the addresses specified in this Guaranty (unless
changed by similar notice in writing given by the particular party whose address
is to be changed) or by facsimile (with a confirmatory duplicate copy sent by
first class United States mail), addressed to Guarantorat the address set forth
at the end of this Guaranty or to Administrative Agent or the Lenders at the
addresses specified for notices in the Loan Agreement (unless changed by similar
notice in writing given by the particular party whose address is to be
changed).  Any such notice or communication shall be deemed to have been given
either at the time of personal delivery or, in the case of courier or mail, as
of the date of first attempted delivery at the address and in the manner
provided herein, or, in the case of facsimile, upon receipt; provided that,
service of a notice required by any applicable statute shall be considered
complete when the requirements of that statute are met.  Notwithstanding the
foregoing, no notice of change of address shall be effective except upon actual
receipt.  This Section shall not be construed in any way to affect or impair any
waiver of notice or demand provided in this Guaranty or in any Loan Document or,
except as expressly provided in this Guaranty, to require giving of notice or
demand to or upon any Person in any situation or for any reason.

 

17.                               Cumulative Rights.  The exercise by
Administrative Agent, on behalf of the Lenders, of any right or remedy hereunder
or under any other Loan Document, or at law or in equity, shall not preclude the
concurrent or subsequent exercise of any other right or remedy.  Administrative
Agent, on behalf of the Lenders, shall have all rights, remedies and recourses
afforded to the Lenders by reason of this Guaranty or any other Loan Document or
by law or equity or otherwise, and the same (a) shall be cumulative and
concurrent, (b) may be pursued separately, successively or concurrently against
Guarantor or others obligated for the Guaranteed Obligations, or any part
thereof, or against any one or more of them, or against any security or
otherwise, at the sole and absolute discretion of Administrative Agent, on
behalf of the Lenders, (c) may be exercised as often as occasion therefor shall
arise, it being agreed by Guarantor that the exercise of, discontinuance of the
exercise of or failure to exercise any of such rights, remedies, or recourses
shall in no event be construed as a waiver or release thereof or of any other
right, remedy, or recourse, and (d) are intended to be, and shall be,
nonexclusive.  No waiver of any default on the part of Guarantor or of any
breach of any of the provisions of this Guaranty or of any other document shall
be considered a waiver of any other or subsequent default or breach, and no
delay or omission in exercising or enforcing the rights and powers granted
herein or in any other document shall be construed as a waiver of such rights
and powers, and no exercise or enforcement of any rights or powers hereunder or
under any other document shall be held to exhaust such rights and powers, and
every such right and power may be exercised from time to time.  The granting of
any consent, approval or waiver by Administrative Agent, on behalf of the
Lenders, shall be limited to the specific instance and purpose therefor and
shall not constitute consent or approval in any other instance or for any other
purpose.  No notice to or demand on

 

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Guarantor in any case shall of itself entitle Guarantor to any other or further
notice or demand in similar or other circumstances.  No provision of this
Guaranty or any right, remedy or recourse of Administrative Agent and the
Lenders with respect hereto, or any default or breach, can be waived, nor can
this Guaranty or Guarantor be released or discharged in any way or to any
extent, except specifically in each case by a writing intended for that purpose
(and which refers specifically to this Guaranty) executed, and delivered to
Guarantor, by Administrative Agent, on behalf of the Lenders.

 

18.                               Term of Guaranty.  This Guaranty shall
continue in effect until the earlier of (a) the date on which all the Guaranteed
Obligations are fully and finally paid, performed and discharged or (b) the date
on which the full amount of the Guaranteed Obligations Cap (plus any attorneys’
fees or other costs of collection incurred by Administrative Agent, on behalf of
any of the Lenders, in the enforcement or preservation of the Lenders’ rights
under this Guaranty as provided by Section 12 of this Guaranty) has been fully
paid by Guarantor.

 

19.                               Financial Statements.

 

(a)                                 As used in this Section, “Financial
Statements” means a balance sheet, income statement, statements of cash flow and
amount and sources of contingent liabilities, a reconciliation of changes in
equity and liquidity verification, and, unless Administrative Agent otherwise
consents, consolidated statements if the reporting party is a holding company or
a parent of a subsidiary entity.  Each party for whom Financial Statements are
required is a “reporting party” and a specified period to which the required
Financial Statements relate is a “reporting period”.

 

(b)                                 Guarantor shall provide or cause to be
provided to Administrative Agent the following:

 

(i)                                     within one hundred twenty (120) days
after the close of each fiscal year of Guarantor, annual, audited Financial
Statements of Guarantor;

 

(ii)                                  within seventy-five (75) days after the
close of each fiscal quarter of each fiscal year of Guarantor, quarterly,
unaudited Financial Statements of Guarantor;

 

(iii)                               (A) as to the annual, audited Financial
Statements referenced in Section 19(b)(i), within one hundred twenty (120) days
after the close of each fiscal year of Guarantor, and (B) as to the quarterly
Financial Statements referenced in Section 19(b)(ii), within seventy-five (75)
days after the close of each fiscal quarter of each fiscal year of Guarantor, a
Compliance Certificate for Guarantor, executed by any executive level officer of
Guarantor, in the form of that attached hereto as Exhibit A (“Compliance
Certificate”) evidencing Guarantor’s compliance (or noncompliance, as
applicable) with the covenant in Section 19(c) of this Guaranty; and

 

(iv)                              from time to time promptly after
Administrative Agent’s request, such additional information, reports and
statements regarding the business

 

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operations and financial condition of each reporting party as Administrative
Agent may reasonably request.

 

All Financial Statements shall be in form and detail reasonably satisfactory to
Administrative Agent in its good faith business judgment and shall contain or be
attached to the signed and dated written certification of the reporting party in
form satisfactory to Administrative Agent to certify that the Financial
Statements have been prepared in accordance with GAAP (subject, in the case of
quarterly Financial Statements, to normal year-end audit adjustments and the
absence of footnotes) and are furnished to Administrative Agent in connection
with the extension of credit by Administrative Agent and the Lenders, and fairly
present in all material respects the reporting party’s financial position as of
the date and for the period therein specified.  Administrative Agent agrees that
the Financial Statements of Guarantor delivered to Administrative Agent in
satisfaction of the conditions to closing and funding of the Loan are
satisfactory as to form, detail and accounting principles used therein and
Financial Statements to be provided in satisfaction of the requirements of this
Guaranty shall be satisfactory to Administrative Agent as to form, detail and
accounting principles if consistent with such Financial Statements.  All
certifications and signatures on behalf of corporations, partnerships or other
entities shall be by an authorized representative of the entity satisfactory to
Administrative Agent in its good faith business judgment.  Except as provided in
Section 19(b) above, all Financial Statements shall be audited or certified, as
required by Administrative Agent, without any qualification or exception not
acceptable to Administrative Agent in its good faith business judgment, by
Deloitte Touche Tohmatsu or another independent certified public accountants
acceptable to Administrative Agent, and shall contain all reports and
disclosures required by generally accepted accounting principles for a fair
presentation.  Acceptance of any Financial Statement by Administrative Agent,
whether or not in the form prescribed herein, shall be relied upon by
Administrative Agent and the Lenders in the administration, enforcement, and
extension of the Guaranteed Obligations.

 

(c)                                  Guarantor covenants and agrees with
Administrative Agent and the Lenders that it will maintain, as of each Test Date
during the term of this Guaranty, Liquid Assets of at least $2,500,000.00.

 

(d)                                 For purposes of this Section 19, the
following capitalized terms have the meanings set forth below:

 

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

 

“Liquid Assets” means the sum of the total assets of Guarantor that are cash,
cash equivalents, accounts and other highly liquid investments that are not
pledged, hypothecated, subject to rights of offset or otherwise restricted
(other than pursuant to customary banker’s or broker’s liens with respect to
deposit or similar accounts not maintained for the purpose of providing
security).

 

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“Test Date” shall mean, the last day of each fiscal quarter of each fiscal year
of Guarantor during the term of this Guaranty.

 

20.                               Disclosure of Information.  Lenders may sell
or offer to sell the Loan or interests in the Loan to one or more assignees or
participants and may disclose to any such assignee or participant or prospective
assignee or participant, to Lenders’ affiliates, to any regulatory body having
jurisdiction over Lenders and to any other parties as necessary or appropriate
in any Lender’s reasonable judgment, any information Lenders now have or
hereafter obtain pertaining to the Guaranteed Obligations, this Guaranty, or
Guarantor, including, without limitation, information regarding any security for
the Guaranteed Obligations or for this Guaranty, credit or other information on
Guarantor, Borrowers, and/or any other party liable, directly or indirectly, for
any part of the Guaranteed Obligations.  Any disclosures by Lenders or
Administrative Agent pursuant to this Section 20 shall be made in compliance
with the provisions of Section 7.6 of the Loan Agreement.

 

21.                               Right of Set-Off.  If Guarantor fails to pay
to Administrative Agent any amount payable by Guarantor to Administrative Agent
under this Guaranty and such failure continues for a period of 10 days after
written demand therefor is given by Administrative Agent to Guarantor as
provided in Section 16 of this Guaranty, then, at any time thereafter until such
payment is made or deemed made by Guarantor, each Lender is hereby authorized
with prior notice to and consent of Administrative Agent, to the fullest extent
permitted by applicable law, without notice to any Person (any such notice being
expressly waived by Guarantor to the fullest extent permitted by applicable
law), to set off and apply any and all deposits, funds, or assets at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of Guarantor against any and all of the obligations of
Guarantor now or hereafter existing under this Guaranty that are then due and
payable.  Such Lender will promptly notify Guarantor after any such set-off and
application made by such Lender, provided that the failure to give such notice
shall not affect the validity of such set-off and application.  The rights of
Lenders under this Section 21 are in addition to the other rights and remedies
(including other rights of set-off) that Administrative Agent may have, on
behalf of all Lenders, and every right of setoff and lien shall continue in full
force and effect until such right of setoff or lien is specifically waived or
released by an instrument in writing executed by Administrative Agent.  Each
amount so set off and applied pursuant to this Section 21 shall constitute and
be deemed to be for all purposes of this Guaranty a payment in such amount made
by Guarantor under this Guaranty with respect to the Guaranteed Obligations.

 

22.                               Subrogation.  Notwithstanding anything to the
contrary contained herein, Guarantor shall not have any right of subrogation in
or under any of the Loan Documents or to participate in any way therein, or in
any right, title or interest in and to any security or right of recourse for the
Indebtedness or any right to reimbursement, exoneration, contribution,
indemnification or any similar rights against any party liable for the
Indebtedness, until the Indebtedness has been fully paid.  This waiver is given
to induce the Lenders to make certain financial accommodations to Borrowers.

 

23.                               Further Assurances.  Guarantor at Guarantor’s
expense will promptly execute and deliver to Administrative Agent upon
Administrative Agent’s request all such other and further

 

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documents, agreements, and instruments in compliance with or accomplishment of
the agreements of Guarantor under this Guaranty.

 

24.                               No Fiduciary Relationship.  The relationship
between Administrative Agent and the Lenders, on the one hand, and Guarantor, on
the other hand, is solely that of lender and guarantor.  Administrative Agent
and the Lenders have no fiduciary or other special relationship with or duty to
Guarantor and none is created hereby or may be inferred from any course of
dealing or act or omission of Administrative Agent or Lender.

 

25.                               Interpretation.  If this Guaranty is signed by
more than one Person as “Guarantor”, then the term “Guarantor” as used in this
Guaranty shall refer to all such Persons, jointly and severally, and all
promises, agreements, covenants, waivers, consents, representations, warranties
and other provisions in this Guaranty are made by and shall be binding upon each
and every such Person, jointly and severally and Administrative Agent, on behalf
of all Lenders, may pursue any Guarantor hereunder without being required (i) to
pursue any other Guarantor hereunder or (ii) pursue rights and remedies under
the Deed of Trust and/or applicable law with respect to the Property or any
other Loan Documents.  The term “Administrative Agent” shall be deemed to
include any subsequent administrative agent appointed under the Loan Agreement. 
Whenever the context of any provisions hereof shall require it, words in the
singular shall include the plural, words in the plural shall include the
singular, and pronouns of any gender shall include the other gender.  Captions
and headings in the Loan Documents are for convenience only and shall not affect
the construction of the Loan Documents.  All references in this Guaranty to
Schedules, Articles, Sections, Subsections, paragraphs and subparagraphs refer
to the respective subdivisions of this Guaranty, unless such reference
specifically identifies another document.  The terms “herein”, “hereof”,
“hereto”, “hereunder” and similar terms refer to this Guaranty and not to any
particular Section or subsection of this Guaranty.  The terms “include” and
“including” shall be interpreted as if followed by the words “without
limitation”.  All references in this Guaranty to sums denominated in dollars or
with the symbol “$” refer to the lawful currency of the United States of
America, unless such reference specifically identifies another currency.  For
purposes of this Guaranty, “Person” or “Persons” shall include firms,
associations, partnerships (including limited partnerships), joint ventures,
trusts, corporations, limited liability companies, and other legal entities,
including governmental bodies, agencies, or instrumentalities, as well as
natural persons.

 

26.                               Time of Essence.  Time shall be of the essence
in this Guaranty with respect to all of Guarantor’s obligations hereunder.

 

27.                               Counterparts.  This Guaranty may be executed
in multiple counterparts, each of which, for all purposes, shall be deemed an
original, and all of which taken together shall constitute but one and the same
agreement.

 

28.                               Entire Agreement.  This Guaranty embodies the
entire agreement between Administrative Agent, the Lenders and Guarantor with
respect to the guaranty by Guarantor of the Guaranteed Obligations.  This
Guaranty supersedes all prior agreements and understandings, if any, with
respect to the guaranty by Guarantor of the Guaranteed Obligations.No condition
or conditions precedent to the effectiveness of this Guaranty exist.  This
Guaranty shall be effective upon execution by Guarantor and delivery to
Administrative Agent.  This Guaranty may not be

 

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modified, amended or superseded except in a writing signed by Administrative
Agent, on behalf of the Lenders, and Guarantor referencing this Guaranty by its
date and specifically identifying the portions hereof that are to be modified,
amended or superseded.

 

29.                               FINAL AGREEMENT.

 

(A)          THIS GUARANTY REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.

 

(B)          THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

30.                               Dispute Resolution.

 

(a)                                 Arbitration.  Except to the extent expressly
provided below, any controversy, claim or dispute between or among the parties
hereto, including any such controversy, claim or dispute arising out of or
relating to (i) this Guaranty, (ii) any other Loan Document, (iii) any related
agreements or instruments, or (iv) the transaction contemplated herein or
therein (including any claim based on or arising from an alleged personal injury
or business tort) (collectively, a “Dispute”), shall, upon the request of either
party, be determined by binding arbitration in accordance with the Federal
Arbitration Act, Title 9, United States Code (or if not applicable, the
applicable state law), the then current rules for arbitration of financial
services disputes of the American Arbitration Association, or any successor
thereof (“AAA”), and the”Special Rules” set forth below.  In the event of any
inconsistency, the Special Rules shall control.  The filing of a court action is
not intended to constitute a waiver of the right of Guarantor or Lenders,
including the suing party, thereafter to require submittal of the Dispute to
arbitration.  Any party to this Guaranty may bring an action, including a
summary or expedited proceeding, to compel arbitration of any Dispute in any
court having jurisdiction over such action.  For the purposes of this Dispute
Resolution Section only, the terms “party” and “parties” shall include any
parent corporation, subsidiary or affiliate of Lenders involved in the
servicing, management or administration of any obligation described in or
evidenced by this Guaranty, together with the officers, employees, successors
and assigns of each of the foregoing.

 

(b)                                 Special Rules.

 

(i)                                     The arbitration shall be conducted in
the City of Dallas, Texas.

 

(ii)                                  The arbitration shall be administered by
AAA, who will appoint an arbitrator; if AAA is unwilling or unable to administer
or legally precluded from administering the arbitration or if AAA is unwilling
or unable to enforce or legally precluded from enforcing any and all provisions
of this Dispute Resolution Section, then any party to this Guaranty may
substitute, without the necessity of the agreement of consent of the other party
or parties, another arbitration organization that has similar procedures to AAA
but that will observe and enforce

 

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any and all provisions of this Dispute Resolution Section.  All Disputes shall
be determined by one arbitrator; however, if the amount in controversy in a
Dispute exceeds Five Million Dollars ($5,000,000), upon the request of any
party, the Dispute shall be decided by three arbitrators (for purposes of this
Guaranty, referred to collectively as the “arbitrator”).

 

(iii)                               All arbitration hearings will be commenced
within ninety (90) days of the demand for arbitration and completed within
ninety (90) days from the date of commencement; provided, however, that upon a
showing of good cause, the arbitrator shall be permitted to extend the
commencement of such hearing for up to an additional sixty (60) days.

 

(iv)                              The judgment and the award, if any, of the
arbitrator shall be issued within thirty (30) days of the close of the hearing. 
The arbitrator shall provide a concise written statement setting forth the
reasons for the judgment and for the award, if any.  The arbitration award, if
any, may be submitted to any court having jurisdiction to be confirmed and
enforced, and such confirmation and enforcement shall not be subject to
arbitration.

 

(v)                                 The arbitrator will give effect to statutes
of limitations and any waivers thereof in determining the disposition of any
Dispute and may dismiss one or more claims in the arbitration on the basis that
such claim or claims is or are barred.  For purposes of the application of the
statute of limitations, the service on AAA under applicable AAA rules of a
notice of Dispute is the equivalent of the filing of a lawsuit.

 

(vi)                              Any dispute concerning this Dispute Resolution
Section, including any such dispute as to the validity or enforceability of this
provision, or whether a Dispute is arbitrable, shall be determined by the
arbitrator; provided, however, that the arbitrator shall not be permitted to
vary the express provisions of the Special Rules or the Reservation of Rights in
subsection (c) below.

 

(vii)                           The arbitrator shall have the power to award
legal fees and costs pursuant to the terms of this Guaranty.

 

(viii)                        The arbitration will take place on an individual
basis without reference to, resort to, or consideration of any form of class or
class action.

 

(c)                                  Reservations of Rights.  Nothing in this
Guaranty shall be deemed to (i) limit the applicability of any otherwise
applicable statutes of limitation and any waivers contained in this Guaranty, or
(ii) apply to or limit the right of Administrative Agent, on behalf of the
Lenders, or any Lender, (A) to exercise self help remedies such as (but not
limited to) setoff, or(B) to foreclose judicially or nonjudicially against any
real or personal property collateral, or to exercise judicial or nonjudicial
power of sale rights, (C) to obtain from a court provisional or ancillary
remedies such as (but not limited to) injunctive relief, writ of possession,
prejudgment attachment, or the appointment of a receiver, or (D) to pursue
rights against a party to this Guaranty in a third-party

 

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proceeding in any action brought against Administrative Agent or any Lender in a
state, federal or international court, tribunal or hearing body (including
actions in specialty courts, such as bankruptcy and patent courts). 
Administrative Agent, on behalf of the Lenders, may exercise the rights set
forth in clauses (A) through (D), inclusive, and Lenders may exercise the right
of setoff, before, during or after the pendency of any arbitration proceeding
brought pursuant to this Guaranty.  Neither the exercise of self help remedies
nor the institution or maintenance of an action for foreclosure or provisional
or ancillary remedies shall constitute a waiver of the right of any party,
including the claimant in any such action, to arbitrate the merits of the
Dispute occasioning resort to such remedies.  No provision in the Loan Documents
regarding submission to jurisdiction and/or venue in any court is intended or
shall be construed to be in derogation of the provisions in any Loan Document
for arbitration of any Dispute.

 

(d)                                 Conflicting Provisions for Dispute
Resolution.  Except as provided in the Plan or Order, if there is any conflict
between the terms, conditions and provisions of this Section and those of any
other provision or agreement for arbitration or dispute resolution, the terms,
conditions and provisions of this Section shall prevail as to any Dispute
arising out of or relating to (i) this Guaranty, (ii) any other Loan Document,
(iii) any related agreements or instruments, or (iv) the transaction
contemplated herein or therein (including any claim based on or arising from an
alleged personal injury or business tort).  In any other situation, if the
resolution of a given Dispute is specifically governed by another provision or
agreement for arbitration or dispute resolution, the other provision or
agreement shall prevail with respect to said Dispute.

 

(e)                                  Jury Trial Waiver in Arbitration.  By
agreeing to this Section, the parties irrevocably and voluntarily waive any
right they may have to a trial by jury in respect of any Dispute.

 

31.                               Waiver of Jury Trial.  WITHOUT INTENDING IN
ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO ARBITRATE ANY “DISPUTE” (FOR PURPOSES
OF THIS SECTION, AS DEFINED ABOVE) AS SET FORTH IN THIS GUARANTY, TO THE EXTENT
ANY “DISPUTE” IS NOT SUBMITTED TO ARBITRATION OR IS DEEMED BY THE ARBITRATOR OR
BY ANY COURT WITH JURISDICTION TO BE NOT ARBITRABLE OR NOT REQUIRED TO BE
ARBITRATED, GUARANTOR AND ADMINISTRATIVE AGENT, ON BEHALF OF ALL LENDERS, WAIVE
TRIAL BY JURY IN RESPECT OF ANY SUCH “DISPUTE” AND ANY ACTION ON SUCH “DISPUTE.”
THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY GUARANTOR AND
ADMINISTRATIVE AGENT, ON BEHALF OF ALL LENDERS, AND GUARANTOR AND ADMINISTRATIVE
AGENT HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE
BY ANY PERSON OR ENTITY ACTING FOR OR ON BEHALF OF ADMINISTRATIVE AGENT OR
LENDERS TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR
NULLIFY ITS EFFECT.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES
ENTERING INTO THE LOAN DOCUMENTS.  GUARANTOR AND ADMINISTRATIVE AGENT ARE EACH
HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE
EVIDENCE OF THIS WAIVER OF JURY TRIAL.  GUARANTOR FURTHER REPRESENTS AND
WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING

 

23

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OF THIS GUARANTY AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL,
OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL
SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS
THIS WAIVER WITH COUNSEL.

 

32.                               Reserved.

 

33.                               Amendment and Restatement.  The Guaranty is an
amendment and restatement of the Original Guaranty Agreementonly as to the
obligations of Guarantor and supersedes and replaces the Original Guaranty
Agreement as it applies to Guarantor.  The Guaranty does not supersede and
replace the Original Guaranty Agreement as it applies to Fairways.  The Original
Guaranty Agreement is and shall remain in full force and effect as to the
obligations of Fairways.

 

THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

24

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IN WITNESS WHEREOF, Guarantor duly executed this Guaranty under seal as of the
date first written above.

 

Address of Guarantor:

 

Behringer Harvard Opportunity
REIT I, Inc.
15601 Dallas Parkway, Suite 600

GUARANTOR:

BEHRINGER HARVARD OPPORTUNITY
REIT I, INC., a Maryland corporation

Dallas, TX 75001

 

Attention: Gerald J. Reihsen, III

By:

 

 

Name:

Michael O’Hanlon

 

Title:

Chief Executive Officer and President

 

--------------------------------------------------------------------------------

 

EXHIBIT “A”

 

FORM OF COMPLIANCE CERTIFICATE

 

COMPLIANCE CERTIFICATE

 

To:                             Bank of America, N.A., as Administrative Agent
(“Administrative Agent”)
901 Main Street, 20th Floor
Dallas, Texas 75202-3714
Attention: Daniel Puls

 

Re:                             $                     Loan to BHFS II, LLC, BHFS
III, LLC, and BHFS IV, LLC;

$                     Loan to BHFS Theater, LLC

 

1.                                      The undersigned certifies to
Administrative Agent and the Lenders that he/she is the
                                of Behringer Harvard Opportunity REIT I, Inc.
(“Guarantor’’) and that this Compliance Certificate has been prepared pursuant
to the Guaranty Agreement dated as of December      , 2012 (“Guaranty”),
executed by Guarantor.  Capitalized terms used herein but not otherwise defined
herein shall have the meanings given to such terms in the Guaranty.

 

2.                                      The undersigned further certifies to
Administrative Agent and the Lenders that (i) a review of the activities of
Guarantor, as of the fiscal quarter ending
                                                  (the “Reporting Period”), has
been made under my supervision with a view to determining whether Guarantor has
fulfilled all of its obligations during the Reporting Period under the Guaranty;
(ii) Guarantor is in compliance with all covenants and provisions in the
Guaranty, and no Default or Potential Default has occurred which is continuing.

 

3.                                      Pursuant to the Guaranty, the following
documents are delivered to Administrative Agent with this Compliance Certificate
and deemed a part of this Compliance Certificate [check appropriate box]:

 

o                                    Quarterly Financial Statements, or

 

o                                    Annual Financial Statements.

 

The Financial Statements fairly and accurately present, in all material
respects, the financial condition of Guarantor and its Subsidiaries as of the
Reporting Period, and have been prepared in accordance with GAAP (subject, in
the case of quarterly Financial Statements, to normal year-end audit adjustments
and the absence of footnotes).

 

4.                                      The undersigned further certifies to
Administrative Agent and the Lenders that the following amounts and calculations
made pursuant to the Guaranty are true and correct in all material respects, for
the referenced Reporting Period:

 

1

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FINANCIAL COVENANTS

 

Minimum Liquidity.  Guarantor shall maintain, as of each Test Date, Liquid
Assets at least equal to $2,500,000.

 

Specify Test Date =

Actual Liquid Assets of Guarantor as of such Test Date= $

In Compliance?  Check One:  o Yes     o No

 

WITNESS the due execution of this Compliance Certificate on
                             , 20      .

 

GUARANTOR:

 

BEHRINGER HARVARD OPPORTUNITY

REIT I, INC., a Maryland corporation

 

By:

 

 

Name:

 

 

Title:

 

 

 

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