Exhibit
10.3




 





GUARANTY
OF RECOURSE OBLIGATIONS


made by


BEHRINGER HARVARD OPPORTUNITY
REIT I, INC.


as guarantor,


in favor of


CITIGROUP
GLOBAL MARKETS REALTY CORP.


Dated as of June
8, 2007




 



















GUARANTY OF RECOURSE
OBLIGATIONS


This GUARANTY (this “Guaranty”), dated as of June 8,
2007, made by BEHRINGER HARVARD OPPORTUNITY REIT I, INC.
a Maryland corporation (“Behringer REIT”),
having an address at Behringer Harvard Holdings, LLC, 15601 Dallas Parkway,
Suite 600, Addison, Texas 75001, (“Guarantor”), in favor of CITIGROUP GLOBAL MARKETS REALTY CORP., a New York
corporation (together with its successors and assigns, hereinafter referred to
as “Lender”), having an address at 388
Greenwich Street, Floor 11, New York, New York 
10013.


R  E  C  I  T  A
L  S:


A.                                   Pursuant to that certain Loan Agreement
dated as of the date hereof (as the same may be amended, modified, supplemented
or replaced from time to time, the “Loan Agreement”)
between BEHRINGER HARVARD SANTA
CLARA LP, a Delaware limited partnership (“Borrower”)
and Lender, Lender has agreed to make a loan (the “Loan”)
to Borrower in the maximum principal amount of up to $59,500,000.00 or so much thereof as may be advanced
from time to time, subject to the terms and conditions of the
Loan Agreement;


B.                                     As a condition to Lender’s making the
Loan, Lender is requiring that Guarantor execute and deliver to Lender this
Guaranty; and


C.                                     Guarantor hereby acknowledges that it
will materially benefit from Lender’s agreeing to make the Loan;


NOW, THEREFORE, in consideration of the premises set forth herein
and as an inducement for and in consideration of the agreement of Lender to
make the Loan pursuant to the Loan Agreement, Guarantor hereby agrees,
covenants, represents and warrants to Lender as follows:


1.                                       Definitions.


(a)                                  All capitalized terms used and not defined
herein shall have the respective meanings given such terms in the Loan
Agreement.


(b)                                 The term “Guaranteed Obligations” means Borrower’s
Recourse Liabilities (the “Recourse
Liability Guaranteed Obligations”).


2.                                       Guaranty.


(a)                                  Guarantor hereby irrevocably, absolutely and
unconditionally guarantees to Lender the full, prompt and complete payment when
due of the Guaranteed Obligations.


(b)                                 All sums payable to Lender under this
Guaranty shall be payable on demand and without reduction for any offset,
claim, counterclaim or defense.













(c)                                  Guarantor
hereby agrees to indemnify, defend and save harmless Lender from and against
any and all costs, losses, liabilities, claims, causes of action, expenses and
damages, including reasonable attorneys’ fees and disbursements, which Lender
may suffer or which otherwise may arise by reason of Borrower’s failure to pay
any of the Guaranteed Obligations when due, irrespective of whether such costs,
losses, liabilities, claims, causes of action, expenses or damages are incurred
by Lender prior or subsequent to (i) Lender’s declaring the Principal, interest
and other sums evidenced or secured by the Loan Documents to be due and payable,
(ii) the commencement or completion of a judicial or non-judicial
foreclosure of the Mortgage or (iii) the conveyance of all or any portion of
the Property by deed-in-lieu of foreclosure.


(d)                                 Guarantor
agrees that no portion of any sums applied (other than sums received from
Guarantor in full or partial satisfaction of its obligations hereunder), from
time to time, in reduction of the Debt shall be deemed to have been applied in
reduction of the Guaranteed Obligations until such time as the Debt has been
paid in full, or Guarantor shall have made the full payment required hereunder,
it being the intention hereof that the Guaranteed Obligations shall be the last
portion of the Debt to be deemed satisfied.


3.                                       Representations and Warranties.  Guarantor hereby represents and warrants (as
to itself) to Lender as follows (which representations and warranties shall be
given as of the date hereof and shall survive the execution and delivery of
this Guaranty):


(a)                                  Organization, Authority and Execution.  Behringer REIT is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Maryland, and has all necessary power and authority to own its properties and
to conduct its business as presently conducted or proposed to be conducted and
to enter into and perform this Guaranty and all other agreements and
instruments to be executed by it in connection herewith.  This Guaranty has been duly executed and
delivered by Guarantor.


(b)                                 Enforceability.  This Guaranty constitutes a legal, valid and
binding obligation of Guarantor, enforceable against Guarantor in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally.


(c)                                  No Violation.  The execution, delivery and performance
by  Guarantor of its obligations under
this Guaranty has been duly authorized by all necessary action, and do not and
will not violate any law, regulation, order, writ, injunction or decree of any
court or governmental body, agency or other instrumentality applicable to a
Guarantor, or result in a breach of any of the terms, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
any mortgage, lien, charge or encumbrance of any nature whatsoever upon any of
the assets of a Guarantor pursuant to the terms of a Guarantor’s articles of
organization, or any mortgage, indenture, agreement or instrument to which a
Guarantor is a party or by which it or any of its properties is bound.  No Guarantor is in default under any other
guaranty which it has provided to Lender.


(d)                                 No
Litigation.  There are no actions,
suits or proceedings at law or at equity, pending or, to Guarantor’s best knowledge,
threatened against or affecting a Guarantor



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or which
involve or might involve the validity or enforceability of this Guaranty or
which might materially adversely affect the financial condition of a Guarantor
or the ability of a Guarantor to perform any of its obligations under this
Guaranty.  No Guarantor is in default
beyond any applicable grace or cure period with respect to any order, writ,
injunction, decree or demand of any Governmental Authority which might
materially adversely affect the financial condition of Guarantor or the ability
of Guarantor to perform any of its obligations under this Guaranty.


(e)                                  Consents. 
All consents, approvals, orders or authorizations of, or registrations,
declarations or filings with, all Governmental Authorities (collectively, the
“Consents”) that are required in connection with the valid execution, delivery
and performance by Guarantor of this Guaranty have been obtained and Guarantor
agrees that all Consents required in connection with the carrying out or performance
of any of Guarantor’s obligations under this Guaranty will be obtained when
required.


(f)                                    Financial Statements and Other Information.  All financial statements of Guarantor
heretofore delivered to Lender are true and correct in all material respects
and fairly present the financial condition of Guarantor as of the respective
dates thereof, and no materially adverse change has occurred in the financial
conditions reflected therein since the respective dates thereof.  None of the aforesaid financial statements or
any certificate or statement furnished to Lender by or on behalf of Guarantor
in connection with the transactions contemplated hereby, and none of the
representations and warranties in this Guaranty contains any untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements contained therein or herein not misleading.  No Guarantor is insolvent within the meaning
of the United States Bankruptcy Code or any other applicable law, code or
regulation and the execution, delivery and performance of this Guaranty will
not render any Guarantor insolvent.


(g)                                 Consideration.  Guarantor is the owner, directly or
indirectly, of legal and beneficial equity interests in Borrower, and as such
will materially benefit from the making of the Loan.


4.                                       Financial Statements. 
BEHRINGER REIT shall deliver to Lender, (a) within 120 days after
the end of each fiscal year of BEHRINGER REIT, a complete copy of BEHRINGER
REIT’s annual financial statements, (b) if requested by Lender, within 60
days after the end of each fiscal quarter of BEHRINGER REIT, financial
statements (including a balance sheet as of the end of such fiscal quarter and
a statement of income and expense for such fiscal quarter) certified by
BEHRINGER REIT and in form, content, level of detail and scope reasonably
satisfactory to Lender, and (c) 20 days after request by Lender, such
other financial information with respect to BEHRINGER REIT as Lender may
reasonably request.


5.                                       Unconditional
Character of Obligations of Guarantor.


The
obligations of Guarantor hereunder shall be irrevocable, absolute and
unconditional, irrespective of the validity, regularity or enforceability, in
whole or in part, of the other Loan Documents or any provision thereof, or the
absence of any action to enforce the same, any waiver or consent with respect
to any provision thereof, the recovery of any judgment against Borrower, a
Guarantor or any other Person or any action to enforce the



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same, any
failure or delay in the enforcement of the obligations of Borrower under the
other Loan Documents or Guarantor under this Guaranty, or any setoff,
counterclaim, and irrespective of any other circumstances which might otherwise
limit recourse against a Guarantor by Lender or constitute a legal or equitable
discharge or defense of a guarantor or surety. 
Lender may enforce the obligations of Guarantor under this Guaranty by a
proceeding at law, in equity or otherwise, independent of any loan foreclosure
or similar proceeding or any deficiency action against Borrower or any other
Person at any time, either before or after an action against the Property or
any part thereof, Borrower or any other Person. 
This Guaranty is a guaranty of payment
and performance and not merely a guaranty of collection.  Guarantor waives diligence, notice of
acceptance of this Guaranty, filing of claims with any court, any proceeding to
enforce any provision of any other Loan Document, against Guarantor, Borrower
or any other Person, any right to require a proceeding first against Borrower
or any other Person, or to exhaust any security (including, without limitation,
the Property) for the performance of the Guaranteed Obligations or any other
obligations of Borrower or any other Person, or any protest, presentment, notice
of default or other notice or demand whatsoever (except to the extent expressly
provided to the contrary in this Guaranty).


(b)                                 The
obligations of Guarantor under this Guaranty, and the rights of Lender to
enforce the same by proceedings, whether by action at law, suit in equity or
otherwise, shall not be in any way affected by any of the following:


(i)                                     any insolvency,
bankruptcy, liquidation, reorganization, readjustment, composition,
dissolution, receivership, conservatorship, winding up or other similar
proceeding involving or affecting Borrower, the Property or any part thereof, a
Guarantor or any other Person;


(ii)                                  any failure by Lender
or any other Person, whether or not without fault on its part, to perform or
comply with any of the terms of the Loan Agreement, or any other Loan
Documents, or any document or instrument relating thereto;


(iii)                               the sale, transfer or
conveyance of the Property or any interest therein to any Person, whether now
or hereafter having or acquiring an interest in the Property or any interest
therein and whether or not pursuant to any foreclosure, trustee sale or similar
proceeding against Borrower or the Property or any interest therein;


(iv)                              the conveyance to Lender,
any Affiliate of Lender or Lender’s nominee of the Property or any interest
therein by a deed-in-lieu of foreclosure;


(v)                                 the release of
Borrower or any other Person from the performance or observance of any of the
agreements, covenants, terms or conditions contained in any of the Loan
Documents by operation of law or otherwise; or


(vi)                              the release in whole or
in part of any collateral for any or all Guaranteed Obligations or for the Loan
or any portion thereof.


(c)                                  Except
as otherwise specifically provided in this Guaranty, Guarantor hereby expressly
and irrevocably waives all defenses in an action brought by Lender



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to enforce
this Guaranty based on claims of waiver, release, surrender, alteration or
compromise and all setoffs, reductions, or impairments, whether arising
hereunder or otherwise.


(d)                                 Lender
may deal with Borrower and Affiliates of Borrower in the same manner and as
freely as if this Guaranty did not exist and shall be entitled, among other
things, to grant Borrower or any other Person such extension or extensions of
time to perform any act or acts as may be deemed advisable by Lender, at any
time and from time to time, without terminating, affecting or impairing the
validity of this Guaranty or the obligations of Guarantor hereunder.


(e)                                  No
compromise, alteration, amendment, modification, extension, renewal, release or
other change of, or waiver, consent, delay, omission, failure to act or other
action with respect to, any liability or obligation under or with respect to,
or of any of the terms, covenants or conditions of, the Loan Documents shall in
any way alter, impair or affect any of the obligations of Guarantor hereunder,
and Guarantor agrees that if any Loan Document are modified with Lender’s
consent, the Guaranteed Obligations shall automatically be deemed modified to
include such modifications.


(f)                                    Lender
may proceed to protect and enforce any or all of its rights under this Guaranty
by suit in equity or action at law, whether for the specific performance of any
covenants or agreements contained in this Guaranty or otherwise, or to take any
action authorized or permitted under applicable law, and shall be entitled to
require and enforce the performance of all acts and things required to be
performed hereunder by Guarantor.  Each
and every remedy of Lender shall, to the extent permitted by law, be cumulative
and shall be in addition to any other remedy given hereunder or now or
hereafter existing at law or in equity.


(g)                                 No
waiver shall be deemed to have been made by Lender of any rights hereunder
unless the same shall be in writing and signed by Lender, and any such waiver
shall be a waiver only with respect to the specific matter involved and shall
in no way impair the rights of Lender or the obligations of Guarantor to Lender
in any other respect or at any other time.


(h)                                 At
the option of Lender, Guarantor may be joined in any action or proceeding
commenced by Lender against Borrower in connection with or based upon any other
Loan Documents and recovery may be had against any Guarantor in such action or
proceeding or in any independent action or proceeding against Guarantor to the
extent of Guarantor’s liability hereunder, without any requirement that Lender
first assert, prosecute or exhaust any remedy or claim against Borrower or any
other Person, or any security for the obligations of Borrower or any other
Person.


(i)                                     Guarantor
agrees that this Guaranty shall continue to be effective or shall be
reinstated, as the case may be, if at any time any payment is made by Borrower
or a Guarantor to Lender and such payment is rescinded or must otherwise be
returned by Lender (as determined by Lender in its sole and absolute
discretion) upon insolvency, bankruptcy, liquidation, reorganization,
readjustment, composition, dissolution, receivership, conservatorship, winding
up or other similar proceeding involving or affecting Borrower or a Guarantor,
all as though such payment had not been made.



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(j)                                     In
the event that Guarantor shall advance or become obligated to pay any sums
under this Guaranty or in connection with the Guaranteed Obligations or in the
event that for any reason whatsoever Borrower or any subsequent owner of the
Property or any part thereof is now, or shall hereafter become, indebted to a
Guarantor, Guarantor agrees that (i) the amount of such sums and of such
indebtedness and all interest thereon shall at all times be subordinate as to
lien, the time of payment and in all other respects to all sums, including
principal and interest and other amounts, at any time owed to Lender under the
Loan Documents, and (ii) Guarantor shall not be entitled to enforce or
receive payment thereof until all principal, interest and other sums due
pursuant to the Loan Documents have been paid in full.  Nothing herein contained is intended or shall
be construed to give Guarantor any right of subrogation in or under the Loan
Documents or any right to participate in any way therein, or in the right,
title or interest of Lender in or to any collateral for the Loan,
notwithstanding any payments made by a Guarantor under this Guaranty, until the
actual and irrevocable receipt by Lender of payment in full of all principal,
interest and other sums due with respect to the Loan or otherwise payable under
the Loan Documents.  If any amount shall
be paid to a Guarantor on account of such subrogation rights at any time when
any such sums due and owing to Lender shall not have been fully paid, such
amount shall be paid by Guarantor to Lender for credit and application against
such sums due and owing to Lender.


(k)                                  Guarantor’s
obligations hereunder shall survive a foreclosure, deed-in-lieu of foreclosure
or similar proceeding involving the Property and the exercise by Lender of any
of all of its remedies pursuant to the Loan Documents and Guarantor expressly
agrees that to the extent necessary to satisfy its obligations under Section 2
hereof, it shall be and remain liable for any deficiency remaining after
foreclosure of any Mortgage or security interest securing the Note,
notwithstanding provisions of law that may prevent the Lender from enforcing
such deficiency against the Borrower..


6.                                       Covenants.


(a)                                  As
used in this Section 6, the following terms shall have the respective meanings
set forth below:


(i)                                     “GAAP” shall mean generally
accepted accounting principles, consistently applied.


(ii)                                  “Liquid Assets” shall mean
assets in the form of cash, cash equivalents, obligations of (or fully
guaranteed as to principal and interest by) the United States or any agency or
instrumentality thereof (provided the full faith and credit of the United
States supports such obligation or guarantee), certificates of deposit issued
by a commercial bank having net assets of not less than $[500 million],
securities listed and traded on a recognized stock exchange or traded over the
counter and listed in the National Association of Securities Dealers Automatic
Quotations, or liquid debt instruments that have a readily ascertainable value
and are regularly traded in a recognized financial market.



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(iii)                               “Net Worth” shall mean, as of a given date,  (x) the total assets of a Guarantor as of
such date less (y) Guarantor’s total liabilities as of such date, determined in
accordance with GAAP.


(b)                                 Guarantor
shall not, at any time while a default in the payment of the Guaranteed
Obligations has occurred and is continuing, either (i) enter into or effectuate
any transaction with any Affiliate which would reduce the Net Worth of
Guarantor, including the payment of any dividend or distribution to a
shareholder, or the redemption, retirement, purchase or other acquisition for
consideration of any stock in Guarantor or (ii) sell, pledge, mortgage or
otherwise transfer to any Person any of Guarantor’s assets, or any interest
therein, except for fair value.


7.                                       Entire
Agreement/Amendments.  This
instrument represents the entire agreement between the parties with respect to the
subject matter hereof.  The terms of this
Guaranty shall not be waived, altered, modified, amended, supplemented or
terminated in any manner whatsoever except by written instrument signed by
Lender and Guarantor.


8.                                       Successors and Assigns. 
This Guaranty shall be binding upon Guarantor, and Guarantor’s estate,
heirs, personal representatives, successors and assigns, may not be assigned or
delegated by any Guarantor and shall inure to the benefit of Lender and its
successors and assigns.


9.                                       Applicable
Law and Consent to Jurisdiction. 
This Guaranty shall be governed by, and construed in accordance with,
the substantive laws of the State of New York. 
Guarantor irrevocably (a) agrees that any suit, action or other
legal proceeding arising out of or relating to this Guaranty may be brought in
a court of record in the City and County of New York or in the Courts of the
United States of America located in the Southern District of New York,
(b) consents to the jurisdiction of each such court in any such suit, action
or proceeding and (c) waives any objection which it may have to the laying
of venue of any such suit, action or proceeding in any of such courts and any
claim that any such suit, action or proceeding has been brought in an
inconvenient forum.  Guarantor
irrevocably consents to the service of any and all process in any such suit,
action or proceeding by service of copies of such process to Guarantor at its
address provided in Section 14 hereof. 
Nothing in this Section 9, however, shall affect the right of
Lender to serve legal process in any other manner permitted by law or affect
the right of Lender to bring any suit, action or proceeding against Guarantor
or its property in the courts of any other jurisdictions.


10.                                 Section
Headings.  The headings of the
sections and paragraphs of this Guaranty have been inserted for convenience of
reference only and shall in no way define, modify, limit or amplify any of the
terms or provisions hereof.


11.                                 Severability.  Any provision of this Guaranty which may be
determined by any competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.



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To the extent
permitted by applicable law, Guarantor hereby waives any provision of law which
renders any provision hereof prohibited or unenforceable in any respect.


12.                                 WAIVER OF TRIAL BY JURY. 
GUARANTOR HEREBY WAIVES THE RIGHT OF TRIAL BY JURY IN ANY LITIGATION,
ACTION OR PROCEEDING ARISING HEREUNDER OR IN CONNECTION THEREWITH.


13.                                 Judgment.  If Lender
recovers a judgment on this Guaranty, Guarantor agrees to pay to Lender
immediately upon demand all reasonable attorneys’ fees and costs incurred by
Lender in collecting and satisfying such judgment; it being expressly
understood that such agreement by the Guarantor is absolute and unconditional
and (i) shall survive (and not merge into) the entry of any judgment and (ii)
shall not be limited regardless of the security for the Loan, and regardless of
whether the Lender exercises any available rights or remedies against any
collateral pledged as security for the Loan.


14.                                 Notices.  All notices,
consents, approvals and requests required or permitted hereunder (a “Notice”) shall
be given in writing and shall be effective for all purposes if either hand
delivered with receipt acknowledged, or by a nationally recognized overnight
delivery service (such as Federal Express), or by certified or registered
United States mail, return receipt requested, postage prepaid, or by facsimile
and confirmed by facsimile answer back, in each case addressed as follows (or
to such other address or Person as a party shall designate from time to time by
notice to the other party):  If to
Lender: Citigroup Global Markets Realty Corp., 388 Greenwich Street, Floor 11,
New York, New York 10013, Attention: Commercial Mortgage Finance, Telecopier
(212) 816-1299, with a copy to: Thacher Proffitt & Wood, LLP, Two World
Financial Center, New York, New York 10281, Attention: Donald F. Simone, Esq.,
Telecopier: (212) 912-7751; if to Guarantor: 
15601 Dallas Parkway, Suite 600, Addison, Texas  75001, Attention: Chief Legal Counsel,
Telecopier: (214) 655-1610,
and 15601 Dallas Parkway, Suite 600, Addison, Texas  75001, Telecopier: (214) 655-1610.  A notice shall be deemed to have been
given:  in the case of hand delivery, at
the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day; or in the case of
overnight delivery, upon the first attempted delivery on a Business Day.


15.                                 Guarantor’s Receipt of Loan Documents.  Guarantor by its execution hereof
acknowledges receipt of true copies of all of the Loan Documents, the terms and
conditions of which are hereby incorporated herein by reference.


16.                                 Interest; Expenses. 
If Guarantor fails to pay all or any sums due hereunder upon demand by
Lender, the amount of such sums payable by Guarantor to Lender shall bear
interest from the date of demand until paid at the Default Rate in effect from
time to time.


(a)                                  Guarantor
hereby agrees to pay all costs, charges and expenses, including  reasonable attorneys’ fees and disbursements,
that may be incurred by Lender in enforcing the covenants, agreements,
obligations and liabilities of Guarantor under this Guaranty.



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


	
  

  	
  BEHRINGER HARVARD OPPORTUNITY

  REIT I, INC., a Maryland corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
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  Name:

  
	
   

  	
   

  	
  Title: