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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 connect
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