Exhibit 10.7


 




 





MEZZANINE
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




 



















MEZZANINE 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 Mezzanine 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 M, LLC
(“Borrower”) and Lender, Lender has
agreed to make a loan (the “Loan”) to
Borrower in the maximum principal amount of up to $20,000,000.00 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 Pledge Agreement or (iii) the conveyance of all or any
portion of the Collateral.


(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 or which involve or might involve the validity or
enforceability of this Guaranty or which might



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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.


(a)                                  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 same, any failure or delay in
the enforcement of the obligations of Borrower under the other



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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 Collateral 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 Collateral) 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 Collateral 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 Collateral or any interest therein to any
Person, whether now or hereafter having or acquiring an interest in the
Collateral or any interest therein and whether or not pursuant to any
foreclosure, trustee sale or similar proceeding against Borrower or the
Collateral or any interest therein;


(iv)                              the
conveyance to Lender, any Affiliate of Lender or Lender’s nominee of the
Collateral or any interest therein;


(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 Collateral 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 Collateral 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 Pledge Agreement 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: