EXHIBIT 10.5


 


LIMITED RECOURSE GUARANTY


 


                                THIS LIMITED RECOURSE GUARANTY (this “Guaranty”),
made as of December 20, 2007, by CYPRESS EQUITIES I, LP, a Texas limited
partnership, having an address at 15601 Dallas Parkway, Suite 400,
Addison, Texas 75001, Attention:  Rick
Bower (“Guarantor”) in favor of BEHRINGER HARVARD RI LENDER, LLC, a
Delaware limited liability company (“Behringer”).


 


WITNESSETH:


 


	
   

  	
  WHEREAS, Royal Island
  Bahamas Ltd., a Bahamian company (“RIBL”), Royal Island Golf Club
  Bahamas Ltd., a 

  



Bahamian company, and RIBL
US Borrower LLC, a Delaware limited liability company (collectively, “Borrower”)
have entered into that certain Credit Agreement, dated as of December 20,
2007 (as amended, amended and restated, extended, supplemented or otherwise
modified from time to time, the “Credit Agreement”), by and among,
Borrower, the Lenders from time to time party thereto, and iStar Financial
Inc., a Maryland corporation, as agent for the Lenders from time to time party
thereto.  Except as otherwise defined
herein, capitalized terms used but not defined herein have the meanings given
such terms in the Credit Agreement;


 


WHEREAS, the Loans are
secured by, among other things, the RIBL’s interest in the Real Property
Collateral as evidenced by that certain Debenture dated of even date herewith,
executed in connection with the Credit Agreement (the “Mortgage”);


 


WHEREAS, Guarantor will
derive significant financial benefits from the making of the Loan;


 


WHEREAS, as a condition
precedent to the making of the Loans, Guarantor has agreed to deliver to
Behringer this Guaranty; and


 


WHEREAS, Behringer has
declined to be one of the Lenders unless this Guaranty is duly executed by
Guarantor and delivered to Behringer.


 


NOW, THEREFORE, in
consideration for, and as an inducement to, Behringer being one of the Lenders,
and for Ten Dollars ($10) and other good and valuable consideration the legal
sufficiency of which and receipt thereof are hereby acknowledged, and
notwithstanding any provision to the contrary contained in the Loan Documents,
including without limitation, any “non-recourse” provision, Behringer and
Guarantor do hereby agree as follows:


 


1.             Guarantor, on behalf of itself and
its successors and assigns (collectively, “Successors”) does hereby
absolutely, unconditionally, irrevocably and personally:


 


(i) guaranty to Behringer the
full and punctual payment of the “Guaranteed Amount” (as hereinafter defined)
to Lender by Guarantor upon the maturity of the Loan or upon any earlier
acceleration of the Loan.  For purposes
herein, “Guaranteed Amount” shall mean, collectively, (a) fifty
percent (50.0%) of the principal amount funded under 


 


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Tranche B, less any principal payments made on Tranche B,
together with (b) all accrued and unpaid interest on Tranche B, together
with (c) the sum of all Development Fees (as defined in the Services
Agreement) previously paid to Guarantor under that certain Development Services
Agreement, between RIBL and Guarantor, dated May 2, 2007 (the “Services
Agreement”); and


 


(ii) agrees
to reimburse Behringer for, and hold Behringer harmless from and against, any
and all costs and expenses (including reasonable attorneys’ fees) incurred,
suffered or sustained by Behringer and/or its successors and assigns to enforce
this Guaranty not later than ten (10) days following Guarantor’s receipt
of a Payment Demand (defined below) (the obligations of Guarantor under clause (i) and
this clause (ii) being referred to hereinafter, collectively, as “Guarantor’s
Obligation”).


 


Any
demand for payment under this Guaranty (a “Payment Demand”) shall be in
writing, shall specify the amount of the Guarantor’s Obligation as of the date
of the Payment Demand, and shall provide in reasonable detail the calculation
of the amount of the Guarantor’s Obligation. 
Upon payment in full of the Guarantor’s Obligation within ten (10) days
following Guarantor’s receipt of the Payment Demand, Guarantor shall have no
further liability under this Guaranty.


 


2.             This is
an irrevocable, absolute, continuing guaranty of payment and performance.  It is agreed that the obligations of
Guarantor hereunder shall be primary and this Guaranty shall be enforceable
against Guarantor and its Successors without the necessity for any suit or
proceeding of any kind or nature whatsoever brought by Behringer against
Borrower or its successors or assigns or any other party under the Credit
Agreement or against any security for the payment of Guarantor’s Obligation and
without the necessity of any notice of non-payment or non-observance or of any
notice of acceptance of this Guaranty or of any notice of demand to which
Guarantor might otherwise be entitled hereunder (including, without limitation,
diligence, presentment, notice of maturity, extension of time, protest, notice
of dishonor or default, change in nature or form of Guarantor’s Obligation,
acceptance of further security, release of further security, imposition or
agreement arrived at as to the amount of or the terms of Guarantor’s
Obligation), all of which Guarantor hereby expressly waives.  Guarantor hereby expressly agrees that the
validity of this Guaranty and the obligations of Guarantor hereunder shall in
no way be terminated, affected, diminished, modified or impaired by reason of
the assertion of or the failure to assert by Behringer, Agent or Lender against
Borrower, or its successors or assigns, any of the rights or remedies reserved
to Behringer, Agent or Lender pursuant to the provisions of the Credit
Agreement, the Tranche B Note, the Mortgage or any other Loan Documents.


 


3.             Guarantor
waives, and covenants and agrees that it will not at any time insist upon,
plead or in any manner whatsoever claim or take the benefit or advantage of,
any and all appraisal, valuation, stay, extension, marshaling-of-assets or
redemption laws, or right of homestead or exemption, whether now or at any time
hereafter in force, that may delay, prevent or otherwise affect the performance
by Guarantor of its obligations under, or the enforcement by Behringer of, this
Guaranty.  Guarantor further covenants
and agrees not to set up or claim any defense, counterclaim, cross-claim,
offset, set-off, right of recoupment, or other objection of any kind to any
action, suit or proceeding in law, equity or otherwise, or to any demand or
claim that 


 


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may be instituted or made by Behringer hereunder other than
the defense of the actual timely performance of Guarantor’s Obligations
hereunder.  Guarantor represents,
warrants and agrees that, as of the date hereof, its obligations under this
Guaranty are not subject to any counterclaims, cross-claims, rights of
recoupment, offsets or affirmative or other defenses of any kind against
Behringer.


 


4.             Guarantor
agrees that any notice or directive given at any time by Guarantor to Behringer
that is inconsistent with any waiver contained in this Guaranty shall be void
and may be ignored by Behringer, and, in addition, may not be pleaded or
introduced as evidence in any litigation relating to this Guaranty for the
reason that such pleading or introduction would be at variance with the written
terms of this Guaranty, unless Behringer has specifically agreed otherwise in a
writing, signed by a duly authorized officer. 
Guarantor specifically acknowledges and agrees that the foregoing
waivers are of the essence of the Loan transaction and that, but for this
Guaranty and such waivers, Behringer would not make the Loan.


 


5.             This
Guaranty shall be a continuing guaranty for so long as the Obligations remain
outstanding and except for modifications, waivers and releases of liabilities
of Guarantor hereunder expressly granted in a written instrument which is in
accordance with Section 22 hereof, the liability of Guarantor hereunder
shall in no way be terminated, affected, modified, impaired or diminished (to
the extent permitted by law) by reason of the happening, from time to time, of
any of the following, although without notice or the further consent of
Guarantor:


 


(a)           any
assignment, amendment, modification or waiver of or change in any of the terms,
covenants, conditions or provisions of the Credit Agreement, the Note, the
Mortgage or any of the other Loan Documents or the invalidity or
unenforceability of any of the foregoing; or


 


(b)           any
extension of time that may be granted by Behringer, Guarantor or the
Successors; or


 


(c)           any action
that Behringer, Agent, Lenders, or Guarantor may take or fail to take under or
in respect of any of the Loan Documents or by reason of any waiver of, or
failure to enforce any of the rights, remedies, powers or privileges available
to Behringer under this Guaranty or available to Behringer, Agent or Lenders at
law, equity or otherwise, or any action on the part of Behringer, Agent or
Lenders granting indulgence or extension in any form whatsoever; or


 


(d)           any
dealing, transaction, matter or thing occurring between Behringer, Agent,
Lenders, Guarantor or the Successors; or


 


(e)           any sale,
exchange, release, or other disposition of any property pledged, mortgaged or
conveyed, or any property in which Behringer, Agent or Lenders have been
granted a lien or security interest to secure any indebtedness of Guarantor to
Behringer, 


 


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Agent or
Lenders pursuant to the Credit Agreement; or


 


(f)            any
release of any person or entity who may be liable in any manner for the payment
and collection of any amounts owed by Guarantor to Behringer, Agent or Lenders;
or


 


(g)           any Event
of Default, whether or not Behringer, Agent or Lenders have exercised any of
its rights and remedies as set forth in the Credit Agreement or the Mortgage
upon the happening of any such Event of Default; or


 


(h)           Guarantor’s
voluntary or involuntary liquidation, dissolution, sale of all or substantially
all of its assets and liabilities, appointment of a trustee, receiver,
liquidator, sequestrator or conservator for all or any part of Guarantor’s
assets, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment, or the commencement
of other similar proceedings affecting Guarantor or any of the assets of it; or


 


(i)            any
change in or termination of the ownership interest of Guarantor (whether direct
or indirect) in Borrower; or


 


(j)            any
conveyance of all or any portion of the Real Property Collateral, whether or
not pursuant to a foreclosure sale, a deed in lieu of foreclosure, a transfer
through bankruptcy, or otherwise.


 


6.             The
liability of Guarantor hereunder shall be reinstated and revived, and the rights
of the Behringer shall continue, with respect to any amount at any time paid on
account of the Guarantor’s Obligations which shall thereafter be required to be
restored or returned by the Behringer upon the bankruptcy, insolvency, or
reorganization of Borrower or any other Person, or otherwise, all as though
such amount had not been paid.  Guarantor
further agrees to the extent (i) Borrower or Guarantor makes any payment
Behringer in connection with the Guarantor’s Obligations and all or any part of
such payment is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid by the trustee, receiver or
any other entity, whether under any Bankruptcy Law or otherwise, or (ii) in
the event following the payment in full of the principal amount of the Loan,
Berhinger is subject to further liability, loss, or expense covered by the
indemnification obligations set forth in the Loan Documents (the payments and
obligations referred to in clauses (i) and (ii) above are hereafter
referred to, collectively, as “Preferential Payments”), then this
Guaranty shall continue to be effective or shall be reinstated, as the case may
be, and, to the extent of such payment or repayment by Berhinger, the Guarantor’s
Obligations or part thereof intended to be satisfied by such Preferential
Payment shall be revived and continued in full force and effect as if said
Preferential Payment had not been made.


 


7.             Guarantor
acknowledges that this Guaranty and Guarantor’s Obligations are and shall at
all times continue to be absolute, unconditional and irrevocable in all
respects, and shall at all times be valid and enforceable irrespective of any
other agreement or circumstances of any nature whatsoever (other than the
defense that the Guarantor’s Obligations 


 


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have been paid or performed, as the case may be) that might
otherwise constitute a defense to this Guaranty or the obligations of any other
person or party relating to this Guaranty or the obligations of Guarantor
hereunder.


 


8.             Guarantor
agrees that if at any time all or any part of any payment at any time received
by Behringer from Guarantor under or with respect to this Guaranty is or must
be rescinded or returned by Behringer for any reason whatsoever (including,
without limitation, the insolvency, bankruptcy or reorganization of Guarantor),
then Guarantor’s Obligations shall, to the extent of the payment rescinded or
returned, be deemed to have continued in existence notwithstanding such previous
receipt by Behringer, and Guarantor’s Obligations shall continue to be
effective or reinstated, as the case may be, as to such payment, as though such
previous payment to Behringer had never been made.


 


9.             Guarantor
represents and warrants to Behringer, with the knowledge that Behringer is
relying upon the same, as follows:


 


(a)           The
execution, delivery, and performance of this Guaranty will not violate any
provision of any law, regulation, judgment, order, decree, determination, or
award of any court, arbitrator or governmental authority, or of any debenture,
mortgage, indenture, loan, or security agreement, lease, contract, or other
agreement, instrument, or undertaking to which Guarantor is a party or that, to
Guarantor’s knowledge, purports to bind Guarantor or any of Guarantor’s
property or assets.


 


(b)           No consent
of any person (including creditors of Guarantor) is required in connection with
Guarantor’s execution of this Guaranty or performance of Guarantor’s
obligations under this Guaranty, other than any consent that Guarantor has
previously obtained.  Guarantor’s
execution of, and obligations under, this Guaranty are not contingent upon
obtaining any further consent, license, permit, approval, or authorization of,
exemption by, notice or report to, or registration, filing, or declaration
with, any governmental authority, bureau, or agency, whether local, state,
federal, or foreign.


 


(c)           Guarantor
has full power, authority, and legal right to execute, deliver and perform its
obligations under this Guaranty. 
Guarantor is duly organized, validly existing, and in good standing
under the laws of the State of Texas. 
This Guaranty has been duly executed and is a legal, valid, and binding
obligation of Guarantor, enforceable in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency or other
laws of general application affecting the enforcement of creditor’s rights or
general equitable principals, whether applied in law or equity.


 


(d)           Guarantor
delivers this Guaranty based solely upon Guarantor’s own independent
investigation and based in no part upon any representation, statement, or
assurance by Behringer, Agent or Lenders.


 


(e)           Guarantor
has good and valid title to all of its property and assets, real and personal,
which Guarantor owns and a valid leasehold interest in any property and assets 


 


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it leases,
if any.


 


(f)            No
information, exhibit, report or certificate furnished by Guarantor to Behringer
in connection with the Loan or any Loan Documents contains any material
misstatement of fact or has omitted to state a material fact or any fact
necessary to make the statements contained therein not materially misleading in
light of the circumstances in which such statements are made.


 


(g)           Guarantor
is Solvent and after giving effect to this Guaranty, continues to be Solvent.


 


(h)           There is
no action, suit, proceeding or investigation pending or, to the best of
Guarantor’s knowledge, threatened against or affecting Guarantor at law, in
equity, in admiralty or before any arbitrator or any governmental department,
commission, board, bureau, agency or instrumentality (domestic or foreign) that
could reasonably be expected to result in any material adverse effect in the
property, assets or condition (financial or otherwise) of Guarantor or in
ability of Guarantor to perform its obligations under this Guaranty.


 


(i)            Guarantor
has heretofore delivered to Behringer, at Behringer’s request, [unaudited]
balance sheets and related statements of income, equity and cash flows for the
year ending [June 30, 2007].  All
such statements were prepared on a GAAP basis and fairly present, in all
material respects, the financial position of the Guarantor as of [June 30,
2007], subject, in the case of any such unaudited financial statements, to
changes resulting from audit and normal year end adjustments and the absence of
footnote disclosure required in accordance with GAAP.  Except as reflected in such financial
statements, Guarantor does not have any Contingent Obligation, contingent
liability or liability for Taxes, long term lease or unusual forward or long
term commitment that is required to be reflected in such financial statements
in accordance with GAAP that is not so reflected.


 


10.           Guarantor
and Behringer acknowledge and agree that this Guaranty is a guaranty of payment
and performance and not of collection and enforcement in respect of any of
Guarantor’s Obligation.


 


11.           To the
extent permitted to assign its rights and obligations under the Credit
Agreement pursuant to the Credit Agreement, Behringer may freely assign any or
all of its rights under this Guaranty, provided that no such assignment
shall increase Guarantor’s Obligations or diminish its rights hereunder.  Except as may be permitted under the Credit
Agreement, Guarantor shall not assign any of its obligations under this
Guaranty without the prior consent of the Behringer.


 


12.           The
representations, warranties and obligations of Guarantor set forth in this
Guaranty shall survive until this Guaranty shall terminate in accordance with
the terms hereof.


 


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13.           This
Guaranty contains the entire agreement between the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements relating to
such subject matter and may not be modified, amended, supplemented or
discharged except by a written agreement signed by Guarantor and
Behringer.  This Guaranty also may be discharged
by full performance of Guarantor’s Obligation in accordance with the terms
hereof.


 


14.           If all or
any portion of any provision contained in this Guaranty shall be determined to
be invalid, illegal or unenforceable in any respect for any reason, such
provision or portion thereof shall be deemed stricken and severed from this
Guaranty and the remaining provision and portions thereof shall continue in
full force and effect.


 


15.           All
notices, consents, approvals and requests required or permitted hereunder shall
be given in the manner provided in Section 9.7 of the Credit Agreement to
Behringer at the following address: 15601 Dallas Parkway, Suite 600,
Addison, Texas 75001 and to Guarantor in the manner set forth in the Credit
Agreement to its address set forth on the first page hereof with copies
to:


 


                                                                                Cypress
Equities I, LP


                                                                                15601
Dallas Parkway, Suite 400


                                                                                Addison,
Texas 75001


                                                                                Attention: 
Rick Bower, Senior Vice President of Finance


                                                                                Telephone
No.:  (972) 361-5124


                                                                                Telecopier
No.:  (972) 361-5928


 


16.           This
Guaranty shall be binding upon Guarantor and its Successors and shall inure to
the benefit of Behringer and its successors and assigns.


 


17.           The
failure of Behringer to enforce any right or remedy hereunder, or promptly to
enforce any such right or remedy, shall not constitute a waiver thereof, nor
give rise to any estoppel against Behringer, nor excuse Guarantor from its
obligations hereunder.  Any waiver of any
such right or remedy to be enforceable against Behringer must be expressly set
forth in writing signed by Behringer.


 


18.


 


(a)           Any suit
initiated by Behringer against Guarantor or in connection with or arising,
directly or indirectly, out of or relating to, this Guaranty (an “Action”)
may, at Behringer’s option, be brought in any state or federal court in the
State of New York having jurisdiction over the subject matter hereof.  Guarantor hereby submits itself to the
exclusive jurisdiction of any such court and agrees that service of process
against Guarantor in any such action may be effected by any means permissible
under federal law or under the laws of the state in which such Action is
brought.  Guarantor hereby agrees that
insofar as is permitted under applicable law, this consent to personal
jurisdiction shall be self-operative and no further instrument or action, other
than service 


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of process
in one of the manners specified in this Guaranty, or as otherwise permitted by
law, shall be necessary in order to confer jurisdiction upon Guarantor.


 


(b)           Guarantor
agrees that, provided that service of process is effected upon Guarantor in one
of the manners hereinafter specified or as otherwise permitted by law,
Guarantor irrevocably waives, to the fullest extent permitted by law, and
agrees not to assert, by way of motion, as a defense or otherwise, (i) any
objection that Guarantor may have or may hereafter have to the laying of the
venue of any Action brought in any court as provided for by this Guaranty, (ii) any
claim that any Action brought in any such court has been brought in an inconvenient
forum, or (iii) any claim that Guarantor is not personally subject to the
jurisdiction of such court.  Guarantor
agrees that, provided that service of process is effected upon Guarantor in one
of the manners specified in this Guaranty or as otherwise permitted by law, a
final judgment from which Guarantor has not appealed or may not appeal in any
Action brought in any such court shall be conclusive and binding upon Guarantor
and may, so far as permitted under applicable law, be enforced in the courts of
any state or any federal court or in any other courts to the jurisdiction of
which it is subject, by a suit upon such judgment and that Guarantor shall not
assert any defense, counterclaim or set-off in any such suit upon such
judgment.


 


(c)           Guarantor
hereby irrevocably designates and appoints Hugh Kelly, 336 Madison Ave., 5th
Floor, New York, New York 10017 (the “Service Agent”) as Guarantor’s
authorized agent to accept and acknowledge on Guarantor’s behalf service of any
and all process that may be served in any Action.


 


(d)           Guarantor
agrees to execute, deliver and file all such further instruments or documents
as may be necessary under the laws of the State of New York or the laws of the
United States in order to make effective (i) the appointment of Service
Agent as agent for service of process as provided above and (ii) Guarantor’s
consent to jurisdiction as provided for in this Guaranty.


 


(e)           Guarantor
hereby consents to process being served in any Action by the mailing of a copy
thereof by registered or certified mail, postage prepaid, return receipt
requested, to the notice address for Guarantor as set forth in this Guaranty
and to Service Agent at the address provided for herein.  If Service Agent shall desire to resign as
agent for service of process, Guarantor shall substitute a party having an
office within the City of New York, New York and reasonably acceptable to
Behringer to act as Service Agent (it being agreed that any such resignation
shall not be effective unless and until the replacement Behringer agrees in
writing to act as Service Agent for service of process).  Guarantor hereby agrees that provided that
service is made in accordance with this paragraph or as otherwise permitted by
law, Guarantor irrevocably waives, to the fullest extent permitted by law, all
claim of error in connection with any such service and agrees that such service
(i) shall be deemed in every respect effective service of process upon it
in any Action, and (ii) shall, to the fullest extent permitted by law, be
taken and held to be valid personal service upon and personal delivery to
Guarantor.


 


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(f)            Nothing
in this Guaranty shall limit Behringer’s right to serve process in any manner
permitted by law or limit Behringer’s right or the right of any of its
successors or assigns to bring proceedings against Guarantor in the courts of
any jurisdiction(s).


 


(g)           To the
extent that Guarantor has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service or
notice, attachment before judgment, attachment in aid of execution, execution
or otherwise) with respect to Guarantor or Guarantor’s property, Guarantor
hereby irrevocably waives such immunity in respect of its obligations under
this Guaranty.


 


(h)           AS A
FURTHER INDUCEMENT TO BEHRINGER’S MAKING TRANCHE B OF THE LOAN TO BORROWER, AND
IN CONSIDERATION THEREOF, BEHRINGER AND GUARANTOR EACH COVENANT AND AGREE THAT
IN ANY ACTION OR PROCEEDING BROUGHT ON, UNDER OR BY VIRTUE OF THIS GUARANTY,
BEHRINGER AND GUARANTOR EACH SHALL AND DO HEREBY UNCONDITIONALLY AND
IRREVOCABLY WAIVE TRIAL BY JURY.


 


19.           All of
Behringer’s rights and remedies under the Credit Agreement, the Note, the
Mortgage or any of the other Loan Documents or under this Guaranty are intended
to be distinct, separate and cumulative and no such right or remedy therein or
herein mentioned is intended to be in exclusion of or a waiver of any other
right or remedy available to Behringer.


 


20.           The terms
and provisions contained herein are and shall be effective and shall govern
notwithstanding any contrary provisions in the Credit Agreement.


 


21.           THE TERMS
OF THIS GUARANTY HAVE BEEN NEGOTIATED, AND THIS GUARANTY HAS BEEN EXECUTED AND
DELIVERED IN THE STATE OF NEW YORK, AND IT IS THE INTENTION OF THE PARTIES
HERETO THAT THIS GUARANTY BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF SUCH STATE.


 


22.           This
Guaranty may not be changed orally, but only by an agreement in writing signed
by the party against whom enforcement of any waiver, change, modification or
discharge is sought.


 


23.           This
Guaranty may be executed in counterparts, which together shall constitute the
same instrument.


 


[SIGNATURES APPEAR ON THE
FOLLOWING PAGE]


 


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


 


	
  GUARANTOR:

  	
   

  
	
   

  	
   

  	
   

  
	
  CYPRESS EQUITIES I, LP, a
  Texas limited partnership

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Cypress Equities LLC, a
  Texas limited liability company, its general partner

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Christopher C. Maguire

  	
   

  
	
   

  	
  Christopher C. Maguire,
  President

  	
   

  
					



 


 


 


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