Exhibit 10.3


 


LIMITED
GUARANTY AGREEMENT


 


This LIMITED GUARANTY
AGREEMENT (this “Guaranty”) is made as of the 31st day of December,
2008, by BEHRINGER HARVARD OPPORTUNITY REIT
II, INC., a Maryland corporation  (the
“Guarantor”), in favor of MUTUAL OF
OMAHA BANK, a federally chartered savings bank, having an address
for notice purposes at 4455 LBJ Freeway, Suite 907, Dallas, Texas 75244
(the “Lender”).


 


PRELIMINARY
STATEMENTS


 


Behringer Harvard 1875
Lawrence, LLC, a Delaware limited liability company (“Borrower”), and
Lender have entered into, are entering into concurrently herewith, or
contemplate entering into, that certain 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 “Loan
Agreement”), which Loan Agreement sets forth the terms and conditions of a
loan (the “Loan”) to Borrower with respect to property located in  Denver County, Colorado, as more particularly
described in the Loan Agreement and identified therein as the Land.  The Loan is secured in part by the Mortgage
(as defined and described in the Loan Agreement).


 


The Loan is, or will be,
evidenced by a Promissory Note issued pursuant to the Loan Agreement, executed
by Borrower and payable to the order of Lender, in the aggregate principal
amount of up to TWENTY-THREE MILLION FIVE HUNDRED THOUSAND AND NO/100 Dollars
($23,500,000.00) (such note, as the same may hereafter be renewed, extended,
supplemented, increased or modified and in effect from time to time, and any
other notes given in substitution therefor, or in modification, renewal, or
extension thereof, in whole or in part, are herein collectively called the “Note”).  For the purposes hereof the term “Obligations”
shall have the meaning given such term in the Loan Agreement and includes the
obligation of Borrower to pay the Note and other Indebtedness (as such term is
defined in the Loan Agreement).


 


A condition precedent to
Lender’s agreement to make the Loan to Borrower is the execution and delivery
by Guarantor of this Guaranty.  This
Guaranty is one of the Loan Documents described in the Loan Agreement.


 


STATEMENT
OF AGREEMENTS


 


For good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, and
as a material inducement to Lender to extend credit to Borrower, Guarantor
hereby guarantees to Lender the prompt and full payment and performance of the
obligations and liabilities described below in this Guaranty, this Guaranty
being upon the following terms and conditions:


 


1.                  Guaranty of Payment.


 


(a)           Guarantor hereby unconditionally and
irrevocably, guarantees to Lender the punctual payment and performance when
due, whether by lapse of time, by


 


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acceleration of maturity, or
otherwise, of the following (collectively, the “Guaranteed Indebtedness”):


 


(i)            all principal and accrued interest
due and payable to Lender under the Note, provided, however, such liability
shall not exceed the lesser of; (a) Eleven Million Seven Hundred Fifty
Thousand and No/100 Dollars ($11,750,000.00); and (b) the amount equal to
fifty percent (50%) of the aggregate Advances made by Lender under the Loan
Agreement if such aggregate Advances are less than Twenty-Three Million Five
Hundred Thousand and No/100 Dollars ($23,500,000.00).


 


(ii)           all Costs incurred by or on behalf of
Lender (including, without limitation, expenses and reasonable attorneys’ fees)
in enforcing the rights and remedies of Lender under this Guaranty and the Loan
Documents, together with interest on all such Costs, accruing at the Default
Rate for the period commencing on the date demand for payment is delivered by
Lender to Guarantor until the date paid by Guarantor;


 


(iii)          all Costs suffered or incurred by
Lender as a result of any fraud or misappropriation by Borrower or any untruth
or inaccuracy in any material respect, which untruth or inaccuracy was known to
Borrower or Guarantor at the time of delivery to Lender, of any instrument or
information delivered to Lender by or on behalf of Borrower or Guarantor
(including the Loan Documents) 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 to the funding of the Loan;


 


(iv)          all Costs suffered or incurred by
Lender as a result of intentional physical waste with respect to any portion of
the Improvements;


 


(v)           all Costs suffered or incurred by
Lender as a result of the removal or disposal of any property in which Lender
has a security interest, beneficial or otherwise, in violation of the terms and
conditions of the Loan Documents;


 


(vi)          all Costs suffered or incurred by
Lender as a result of any mechanic’s or materialmen’s liens not expressly
permitted or contested, paid and released pursuant to the terms of the Loan
Documents, to the extent that revenues from the Mortgaged Property are
insufficient to pay such Costs together with all other amounts due under the
Loan Documents and other costs of operation of the Mortgaged Property;


 


(vii)         all Costs suffered or incurred by
Lender as a result of the misapplication of any insurance proceeds or
condemnation awards in violation of the Loan Documents or the failure of
Borrower to maintain the insurance coverages required by the Loan Documents;


 


(viii)        all revenues received by or on behalf of
Borrower from the operation or ownership of the Property and not delivered to
Lender during the


 


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occurrence of a Default
under the Loan Documents or applied to the Reserves or the costs of the Project
as required by the terms of the Loan Agreement; and


 


(ix)           all Environmental Damages.


 


The guaranty of Guarantor as
set forth in this Section 1 is a continuing guaranty of payment and
not a guaranty of collection. Guarantor’s obligations shall not be affected,
impaired, lessened or released by loans, credits or other financial
accommodations now existing or hereafter advanced by Lender to Borrower in
excess of the Guaranteed Indebtedness. 
In no event shall the Guaranteed Indebtedness be reduced as a result of (i) Borrower’s
payment of any part of the Obligations; (ii) Lender’s foreclosure or
acceptance of a deed in lieu of foreclosure with respect to any collateral
securing the Obligations; or (iii) any amount applied, from any source
other than Guarantor, against the principal amount of the Obligations as a
result of the foreclosure of or other realization upon any of the security for
the Obligations, unless such amount applied results in repayment in full of all
Obligations.  To the extent Lender
receives any payments under the Loan Agreement or any Note or receives any
proceeds from foreclosure of or other realization upon any of the security for
the Obligations (including proceeds from foreclosure), such payments or
proceeds shall first be applied to that portion of the Obligations for which
Guarantor has no liability for payment under this Guaranty, and shall then (and
only after payment in full of the portion of the Obligations for which
Guarantor has no liability for payment under this Guaranty) be applied against
the portion of the Obligations for which payment Guarantor is liable.


 


(b)           All capitalized terms used in this
Guaranty, but not defined herein, shall have the meaning given such terms in
the Loan Agreement.  As used in this
Guaranty, the following capitalized terms shall have the following meanings:


 


“Bankruptcy
Code”  means Title 11 of the
United States Code, as the same may be hereafter amended or modified.


 


“Costs”  any claims (including, without limitation,
third party claims), settlements of claims, actions, administrative proceedings
(including informal proceedings), judgments, damages, punitive damages,
penalties, fines, costs, taxes, assessments, liabilities, interest or losses,
including reasonable attorneys’ fees and expenses (including, without
limitation, any such reasonable fees and expenses incurred in enforcing this
Guaranty or collecting any sums due hereunder), consultant fees, and expert
fees, together with all other out-of-pocket costs and expenses of any kind or
nature.


 


2.                Primary Liability of
Guarantor.


 


(a)           This Guaranty is an
absolute, irrevocable and unconditional guaranty of payment of the Guaranteed
Indebtedness.  Guarantor shall be liable
for the payment of the Guaranteed Indebtedness 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,


 


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including
any right or privilege, whether existing under statute, at law or in equity, to
require Lender to take prior recourse or proceedings against any collateral,
security or Person (hereinafter defined) whatsoever.  Guarantor expressly waives each and every
right to which Guarantor may be entitled by virtue of the suretyship laws of
the State of Texas, including without limitation, and rights Guarantor may have
pursuant to Rule 31, Texas Rules of Civil Procedure, Chapter 17 of
the Texas Civil Practice and Remedies Code and Chapter 34 of the Texas Business
and Commerce Code.


 


(b)           It shall not be
necessary for Lender in order to enforce such payment or performance by
Guarantor, first to institute suit or pursue or exhaust any rights or remedies
against Borrower or others liable on such indebtedness or for such performance,
or to enforce any rights against any security that shall ever have been given
to secure such indebtedness or performance, or to join Borrower or any others
liable for the payment or performance of the 
Obligations or any part thereof in any action to enforce this Guaranty,
or to resort to any other means of obtaining payment or performance of the
Obligations; provided, however, that nothing herein contained
shall prevent Lender from suing on the Note and other Loan Documents or
foreclosing the Mortgage 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 Note and
other Loan Documents, and 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 Property or other collateral given for the Obligations or any part
thereof, whether by foreclosure or otherwise, Lender may at its discretion
purchase all or any part of the Property or 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 Loan
Documents.


 


(c)           Suit may be brought
or demand may be made against Borrower or against all parties who have signed
this Guaranty or any other guaranty covering all or any part of the Guaranteed
Indebtedness, or against any one or more of them, separately or together,
without impairing the rights of Lender against any party hereto.  Any time that Lender is entitled to exercise
its rights or remedies hereunder, it may in its discretion elect to demand
payment and performance.  If Lender
elects to demand performance, it shall at all times thereafter have the right
to demand payment until all of the Obligations have been paid and performed in
full.  If Lender elects to demand
payment, it shall at all times thereafter have the right to demand performance
until all of the Obligations have been paid and performed in full.


 


3.                Certain Agreements and
Waivers by Guarantor.


 


(a)           Guarantor hereby
agrees that neither Lender’s 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:


 


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


 


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


 


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


 


(4)           any homestead
exemption or any other exemption under applicable law;


 


(5)           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 Obligations, including any impairment of
Guarantor’s recourse against any Person or collateral;


 


(6)           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
Lender covering all or any part of the 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 Borrower or any other party liable, directly
or indirectly, for the payment or performance of any or all of the Obligations;


 


(7)           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 Borrower or any other party at any time liable for the payment or
performance of any or all of the Obligations;


 


(8)           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 Obligations and any of the Loan Documents, including, without limitation,
material alterations of the terms of payment (including changes in maturity
dates and interest rates) or performance (including terms or aspects relating
to the Improvements) or any other terms thereof, or any waiver, termination, or
release of, or consent to departure from, any of the Loan Documents or any
other guaranty of any or all of the Obligations, or any adjustment, indulgence,
forbearance, or compromise that may be granted from time to time by Lender, to
Borrower, Guarantor, and any other Person at any time liable for the payment or
performance of any or all of the Obligations;


 


(9)           any neglect, lack of
diligence, delay, omission, failure, or refusal of Lender, to take or prosecute
(or in taking or prosecuting) any action for the collection or enforcement of
any of the 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


 


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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 Obligations;


 


(10)         any failure of Lender
to notify Guarantor of any creation, renewal, extension, rearrangement,
modification, supplement, subordination, or assignment of the 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 Lender,
against Borrower or any security or other recourse, or of any new agreement
between Lender and Borrower, it being understood that Lender shall not be
required to give Guarantor any notice of any kind under any circumstances with
respect to or in connection with the 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
Borrower, including, but not limited to, any changes in the business or
financial condition of Borrower, and Guarantor acknowledges and agrees that Lender
shall have no duty to notify Guarantor of any information which Lender may have
concerning Borrower;


 


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


 


(12)         the making of
advances by Lender to protect its interest 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;


 


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


 


(14)         the unenforceability
of all or any part of the Obligations against Borrower, whether because the
Obligations exceed the amount permitted by law or violate any usury law, or
because the act of creating the Obligations, or any part thereof, is ultra
vires, or because the officers or Persons creating the 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 Borrower has
any valid defense, claim or offset with respect thereto, or because 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 Borrower or any other Person be found not liable on the
Obligations, or any part thereof, for any reason (and regardless of any joinder
of Borrower or any other party in any action to obtain payment or performance
of any or all of the Obligations); or


 


(15)         any order, ruling or
plan of reorganization emanating from proceedings under Title 11 of the United
States Code with respect to Borrower or any


 


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other
Person, including any extension, reduction, composition, or other alteration of
the Obligations, whether or not consented to by Lender.


 


(b)           In the event any
payment by Borrower or any other Person to Lender in respect of the Obligations
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 Lender is required to refund such payment or pay the amount thereof to
any other party, such payment by Borrower or any other party to 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 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 Lender or paid by Lender to another
Person (which amounts shall constitute part of the Obligations), and any
interest paid by 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 Lender that
the obligations and liabilities of Guarantor hereunder are absolute and
unconditional under any and all circumstances and that until the Obligations are
fully and finally paid, and any applicable preference period has expired, 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 Guarantor.  Lender shall be
entitled to continue to hold this Guaranty in its possession for the longer of (i) the
period during which any performance of the obligations under the Loan Agreement
shall be required by its terms, or (ii) a period of one year from the date
the Obligations are paid in full and for so long thereafter as may be necessary
to enforce any obligation of Guarantor hereunder and to exercise any right or
remedy of Lender hereunder.


 


4.                Subordination.  If,
for any reason whatsoever, 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 Borrower securing such
indebtedness shall, at all times, be subordinate in all respects to the
Obligations and to all liens, security interests and rights now or hereafter
existing to secure the Obligations;


 


(b)           Guarantor shall not
be entitled to enforce or receive payment, directly or indirectly, of any such
indebtedness of Borrower to Guarantor during the continuance of an Event of
Default;


 


(c)           In the event of
receivership, bankruptcy, reorganization, arrangement or other debtor relief or
insolvency proceedings involving Borrower as debtor, Lender 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 Borrower to Guarantor now existing or hereafter
arising, and to have all benefits of any security therefor, until the
Obligations have been fully and finally paid and performed.


 


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If,
notwithstanding the foregoing provisions, Guarantor should receive any payment,
claim or distribution that is prohibited as provided above in this Section,
Guarantor shall pay the same to Lender immediately, Guarantor hereby agreeing
that it shall receive the payment, claim or distribution in trust for Lender
and shall have absolutely no dominion over the same except to pay it
immediately to Lender; and


 


(d)                                 Guarantor shall
promptly upon request of Lender from time to time execute such documents and perform
such acts as Lender may require to permit or facilitate exercise of its rights
under this Section, including, but not limited to, execution and delivery of
proofs of claim.  All promissory notes,
accounts receivable ledgers or other evidences, now or hereafter held by
Guarantor, of obligations of 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.


 


5.                                       Other Liability of Guarantor or Borrower.  If Guarantor is or becomes liable, by
endorsement or otherwise, for any indebtedness owing by Borrower to Lender
other than under this Guaranty, such liability shall not be in any manner
impaired or affected hereby, and the rights of Lender hereunder shall be
cumulative of any and all other rights that Lender may have against
Guarantor.  If Borrower is or becomes
indebted to Lender for any indebtedness other than or in excess of the
Obligations for which Guarantor is liable under this Guaranty, any payment
received or recovery realized upon such other indebtedness of Borrower to
Lender may, except to the extent paid by Guarantor on the Obligations or
specifically required by law or agreement of Lender to be applied to the
Obligations, in Lender’s sole discretion, be applied upon indebtedness of
Borrower to Lender other than the Obligations. 
This Guaranty is independent of (and shall not be limited by) any other
guaranty now existing or hereafter given. 
Further, Guarantor’s liability under this Guaranty is in addition to any
and all other liability Guarantor may have in any other capacity, including
without limitation, its capacity as a general partner.


 


6.                                       Lender’s Assigns.  This Guaranty is for the benefit of Lender
and their successors and assigns, and in the event of an assignment of the
Obligations, or any part thereof, in accordance with the Loan Agreement, the
rights and benefits hereunder, to the extent applicable to the Obligations so
assigned, may be transferred with such Obligations.  Lender shall endeavor to give notice to
Guarantor of any transfer or assignment of the Obligations, or any part
thereof, but Guarantor agrees that failure to give notice of any such transfer
or assignment will not affect the liabilities of Guarantor hereunder.


 


7.                                       Binding Effect.  This
Guaranty is binding not only on Guarantor, but also on Guarantor’s successors
and assigns. If this Guaranty is signed by more than one Person, then all of
the obligations of Guarantor arising hereunder shall be jointly and severally
binding on each of the undersigned, and their respective heirs, personal
representatives, successors and assigns, and the term “Guarantor” shall mean
all of such Persons and each of them individually.


 


8.                                                       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,


 


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such laws.  All obligations of Guarantor hereunder are
payable and performable at the place or places where the 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 state
court, or any United States federal court, sitting in the state specified in
the first sentence of this Section and to the jurisdiction of any state or
United States federal court sitting in the state in which any of the Land is
located, over any suit, action or proceeding arising out of or relating to this
Guaranty or the 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 specified in the first sentence of this Section 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 Lender 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 Lender to serve process in any
manner permitted by law or limit the right of Lender 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 Lender shall deem necessary and
desirable.


 


9.                                                       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.


 


10.                                                 Attorneys’ Fees and Costs of Collection.  Guarantor shall pay on demand all reasonable
attorneys’ fees and all other costs and expenses incurred by Lender in the
enforcement of or preservation of Lender’s rights under this Guaranty
including, without limitation, all reasonable 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, or whether in
connection with the collection and enforcement of this Guaranty against any other
Guarantor, if there be more than one. 
Guarantor agrees to pay interest on any expenses or other sums due to
Lender under this Section that are not paid when due, at a rate per annum
equal to the Default Rate provided


 


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for in the Loan
Agreement.  Guarantor’s obligations and
liabilities under this Section shall survive any payment or discharge in
full of the Obligations.


 


11.                                                 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.


 


12.                                                 Controlling Agreement.  It is not the intention of Lender 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 Indebtedness or 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 shall
override and control all other provisions of this Guaranty and of any other
agreement between Guarantor and Lender.


 


13.                                                 Representations, Warranties, and Covenants of Guarantor.  Guarantor hereby represents, warrants, and
covenants that (a) Guarantor has a 
financial interest in Borrower and will derive a material and
substantial benefit, directly or indirectly, from the making of the Loan to
Borrower and from the making of this Guaranty by Guarantor; (b) to
Guarantor’s knowledge, this Guaranty is 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 or in default with respect to any law known to Guarantor
or in default (or at risk of acceleration of indebtedness) under any agreement
or restriction by which Guarantor is bound or affected; (d) Guarantor will
indemnify Lender 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; (e) there is no litigation pending or,
to the knowledge of Guarantor, threatened before or by any tribunal against or
affecting Guarantor which would materially and adversely affect Guarantor’s
ability to perform its obligations under this Guaranty; (f) all financial
statements and information heretofore furnished to Lender by Guarantor do, and
all financial statements and information hereafter furnished to Lender by
Guarantor will, fairly present the condition (financial or otherwise) of
Guarantor as of their dates and the results of Guarantor’s operations for the
periods therein specified, and, since the date of the most recent financial
statements of Guarantor heretofore furnished to Lender, no material adverse
change has occurred in the financial condition of Guarantor, nor, except as
heretofore disclosed in writing to Lender, has Guarantor incurred any material
liability, direct or indirect, fixed or contingent, which would affect
Guarantor’s ability to perform its duties and obligations under this Guaranty; (g) 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; (h) Lender
has no duty at any time to investigate or inform Guarantor of the financial or
business condition or affairs of Borrower or any change therein, and Guarantor
will keep fully apprised of Borrower’s financial and business condition; (i) Guarantor
acknowledges and agrees that Guarantor may be required to pay the Guaranteed
Indebtedness in full without assistance or support from Borrower


 


10

















 


or any other Person; and (j) Guarantor
has read and fully understands the provisions contained in the Note, the Loan
Agreement, the Mortgage, and the other Loan Documents.  Guarantor’s representations, warranties and
covenants are a material inducement to Lender to enter into the other Loan
Documents and shall survive the execution hereof and any bankruptcy,
foreclosure, transfer of security or other event affecting Borrower, Guarantor,
any other party, or any security for all or any part of the Obligations.


 


14.                                                 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 telegram, telex,
or facsimile.  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
telegram or 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 to require giving of notice or demand to or upon any Person in any
situation or for any reason.


 


15.                                                 Cumulative Rights.  The exercise by Lender 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.  Lender shall have all rights,
remedies and recourses afforded to Lender 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 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 Lender, (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 Lender 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 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 Lender with respect hereto, or any
default or


 


11

















 


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 Lender.


 


16.                                                 Term of Guaranty.  This Guaranty shall continue in effect until
all the Guaranteed Indebtedness is fully and finally paid, except that, and
notwithstanding any return of this Guaranty to Guarantor, this Guaranty shall
continue in effect with respect to all obligations and liabilities of Guarantor
under Section 10 and as provided in Section 3(b).


 


17.                                                 Financial Statements.  As used in this Section, “Financial
Statements” means (i) for each reporting party other than an individual, a
balance sheet, income statement, statements of cash flow and amounts and
sources of contingent liabilities, a reconciliation of changes in equity and
liquidity verification, and, unless Lender otherwise consents, consolidated and
consolidating statements if the reporting party is a holding company or a
parent of a subsidiary entity; and (ii) for each reporting party who is an
individual, a balance sheet, statements of amounts and sources of contingent
liabilities, sources and uses of cash and liquidity verification, and, unless
Lender otherwise consents, Financial Statements for each entity owned or
jointly owned by the reporting party. 
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”.  Guarantor shall
provide or cause to be provided to Lender the following:


 


(a)                                  for each fiscal
year of Guarantor, audited Financial Statements of Guarantor, as soon as
reasonably practicable and in any event within one hundred twenty (120) days
after the close of each fiscal year; and


 


(b)                                 for each fiscal
quarter of such Guarantor, unaudited Financial Statements of such Guarantor, as
soon as reasonably practicable and in any event within ninety (90) days after the
close of each fiscal quarter.


 


(c)                                  From time to
time promptly after Lender’s request, such additional information, reports and
statements regarding the business operations and financial condition of each
reporting party as Lender may reasonably request.


 


All Financial Statements
shall be in form and detail reasonably satisfactory to Lender and shall contain
or be attached to the signed and dated written certification of the reporting
party in form reasonably satisfactory to Lender to certify that the Financial
Statements are furnished to Lender in connection with the extension of credit
by Lender and constitute a fair statement of the reporting party’s financial
position.  The Financial Statements shall
reflect a minimum net worth of the Guarantor of at least Thirty-Five Million
and No/100 Dollars ($35,000,000.00) and an ongoing liquidity of at least Four
Million and No/100 Dollars ($4,000,000.00), provided, however, that the
liquidity calculation shall include all available funds under any existing credit
lines to the Guarantor or its affiliates. 
In no event shall the Financial Statements reflect a debt to asset
leverage ratio (determined exclusive of accumulated depreciation and
amortization) in excess of seventy-five percent (75%).  All certifications and signatures on behalf
of corporations, partnerships or other entities shall be by a representative of
the entity reasonably satisfactory to Lender. 
All annual Financial Statements shall be audited or certified, as
required by Lender,


 


12

















 


without any qualification or
exception not acceptable to Lender, by independent certified public accountants
reasonably acceptable to Lender (provided that only Financial Statements of
Guarantor may be required to be audited), and shall contain all reports and
disclosures required by generally accepted accounting principles for a fair
presentation.  All assets shown on the
Financial Statements provided by Guarantor, unless clearly designated to the
contrary, shall be conclusively deemed to be free and clear of any exemption or
any claim of exemption of Guarantor at the date of the Financial Statements and
at all times thereafter. Acceptance of any Financial Statement by Lender,
whether or not in the form prescribed herein, shall be relied upon by Lender in
the administration, enforcement, and extension of the Obligations.


 


18.                                                 Disclosure of Information.  Lender 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
Lender’s affiliates, including without limitation, to any regulatory body
having jurisdiction over Lender upon request by such regulatory body, any
information Lender now has or hereafter obtains pertaining to the Obligations,
this Guaranty, or Guarantor, including, without limitation, information
regarding any security for the Obligations or for this Guaranty, credit or
other information on Guarantor, Borrower, and/or any other party liable,
directly or indirectly, for any part of the Obligations.


 


19.                                                 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 Obligations or any right to
reimbursement, exoneration, contribution, indemnification or any similar
rights, until the Obligations has been fully and finally paid.


 


20.                                                 Further Assurances.  Guarantor at Guarantor’s expense will
promptly execute and deliver to Lender upon Lender’s reasonable request all
such other and further documents, agreements, and instruments in compliance
with or accomplishment of the agreements of Guarantor under this Guaranty.


 


21.                                                 No Fiduciary Relationship.  The relationship between Lender and Guarantor
is solely that of lender and guarantor. 
Lender has 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 Lender.


 


22.                                                 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
Lender, may pursue any Guarantor hereunder without being required (i) to
pursue any other Guarantor hereunder or (ii) pursue rights and remedies
under the Mortgage and/or applicable law with respect to the Property or any
other Loan Documents.  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,


 


13

















 


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.  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.


 


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


 


24.                                                 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.


 


25.                                                 Entire Agreement.  This Guaranty embodies the entire agreement
between, Lender and Guarantor with respect to the guaranty by Guarantor of the
Guaranteed Indebtedness.  This Guaranty
supersedes all prior agreements and understandings, if any, with respect to the
guaranty by Guarantor of the Guaranteed Indebtedness.  No condition or conditions precedent to the
effectiveness of this Guaranty exist. 
This Guaranty shall be effective upon execution by Guarantor and
delivery to Lender.  This Guaranty may
not be modified, amended or superseded except in a writing signed by Lender and
Guarantor referencing this Guaranty by its date and specifically identifying
the portions hereof that are to be modified, amended or superseded.


 


26.                                                 Waiver of Jury Trial.  GUARANTOR
AND LENDER, WAIVE TRIAL BY JURY IN RESPECT OF ANY DISPUTE AND ANY ACTION ON
SUCH DISPUTE.  THIS WAIVER IS KNOWINGLY,
WILLINGLY AND VOLUNTARILY MADE BY GUARANTOR AND LENDER, AND GUARANTOR AND
LENDER HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN
MADE BY ANY PERSON OR ENTITY 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 LENDER
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 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.


 


THE LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF


 


14

















 


PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.


 


[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT
BLANK; SIGNATURE PAGE FOLLOWS.]


 


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


 


	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  BEHRINGER
  HARVARD OPPORTUNITY

  REIT II, INC., a Maryland corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerald J. Reihsen, III

  
	
   

  	
  Name:

  	
  Gerald J. Reihsen, III

  
	
   

  	
  Title:

  	
  Executive Vice President

  
					



 


Signature
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