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SECOND MODIFICATION AND EXTENSION AGREEMENT

This SECOND MODIFICATION AND EXTENSION AGREEMENT (this “Agreement”) dated as of
May 30, 2007 by and between STRATUS PROPERTIES INC., a Delaware corporation
(“Stratus”), STRATUS PROPERTIES OPERATING CO., L.P., a Delaware limited
partnership (“SPOC”), CIRCLE C LAND, L.P., a Texas limited partnership (“Circle
C”), and AUSTIN 290 PROPERTIES, INC., a Texas corporation (“Austin”) (Stratus,
SPOC, Circle C and Austin are sometimes referred to in this Agreement severally
as “Borrower”), CALERA COURT, L.P., a Texas limited partnership ("Calera
Court"), OLY STRATUS BARTON CREEK I JOINT VENTURE, a Texas joint venture
("Stratus JV") and COMERICA BANK ("Lender");

W I T N E S S E T H:

WHEREAS, Borrower has executed and delivered to Lender, inter alia, (i) that
certain Revolving Promissory Note dated as of September 30, 2005, payable to the
order of Lender in the original principal sum of $45,000,000.00, with interest
and principal payable as therein provided, which note was amended by that
certain Modification and Extension Agreement (the "First Modification") dated as
of May 30, 2006, executed by and among Borrower, Calera Court, Stratus JV and
Lender, and recorded under Clerk’s File No. 2006140557 of the Real Property
Records of Travis County, Texas (said note, as amended by the First
Modification, is herein called the “Note”); (ii) that certain Loan Agreement
dated of even date with the Note between Borrower, Calera Court and Lender,
which loan agreement was amended by the First Modification (said loan agreement,
as amended by the First Modification, is herein called the "Loan Agreement");
(iii) that certain Deed of Trust, Security Agreement and Assignment of Rents
dated of even date with the Note from Stratus to Melinda Chausse, Trustee,
securing the payment of the Note, covering certain real and personal property
described therein, recorded under Clerk’s File No. 2005183345 of the Real
Property Records of Travis County, Texas, which deed of trust was amended by the
First Modification (said deed of trust, as amended by the First Modification, is
herein called the “Stratus Deed of Trust”); (iv) that certain Deed of Trust,
Security Agreement and Assignment of Rents dated of even date with the Note from
Circle C to Melinda Chausse, Trustee, securing the payment of the Note, covering
certain real and personal property described therein, recorded under Clerk’s
File No. 2005183344 of the Real Property Records of Travis County, Texas, which
deed of trust was amended by the First Modification (said deed of trust, as
amended by the First Modification, is herein called the “Circle C Deed of
Trust”); (v) that certain Deed of Trust, Security Agreement and Assignment of
Rents dated of even date with the Note from SPOC to Melinda Chausse, Trustee,
securing the payment of the Note, covering certain real and personal property
described therein, recorded under Clerk’s File No. 2005183343 of the Real
Property Records of Travis County, Texas, which deed of trust was amended by the
First Modification (said deed of trust, as amended by the First Modification, is
herein called the “SPOC Deed of Trust”); (vi) that certain Deed of Trust,
Security Agreement and Assignment of Rents dated of even date with the Note from
Austin to Melinda Chausse, Trustee, securing the payment of the Note, covering
certain real and personal property described therein, recorded under Clerk’s
File No. 2005183347 of the Real Property Records of Travis County, Texas, which
deed of trust was amended by the First Modification (said deed of trust, as
amended by the First Modification, is herein called the “Austin Deed of Trust”);
(vii) that certain Deed of Trust, Security Agreement and Assignment of Rents
dated of even date with the Note from Calera Court to Melinda Chausse, Trustee,
securing the payment of the Note, covering certain real and personal property
described therein, recorded under Clerk’s File No. 2005183346 of the Real
Property Records of Travis County, Texas, which deed of trust was amended by the
First Modification (said deed of trust, as amended by the First Modification, is
herein called the “Calera Court Deed of Trust”); (viii) that certain Deed of
Trust, Security Agreement and Assignment of Rents dated of even date with the
Note from Stratus JV to Melinda Chausse, Trustee, securing the payment of the
Note, covering certain real and personal property described therein, recorded
under Clerk’s File No. 2005183348 of the Real Property Records of Travis County,
Texas, which deed of trust was amended by the First Modification (said deed of
trust, as amended by the First Modification, is herein called the “Stratus JV
Deed of Trust”) (the Stratus Deed of Trust, Circle C Deed of Trust, SPOC Deed of
Trust, Austin Deed of Trust, Calera Court and Stratus JV Deed of Trust are
herein collectively called the "Deed of Trust", and all of the property covered
by the Deed of Trust is herein collectively called the “Mortgaged Property”)
(the Note, Loan Agreement, Deed of Trust and all other documents executed by
Borrower and/or any other party or parties evidencing or securing or otherwise
in connection with the loans evidenced by the Note being herein collectively
called the "Loan Documents");

WHEREAS, the Note is due and payable on May 30, 2008, and Borrower has requested
that Lender extend the term of the Note to May 30, 2009 and make certain other
modifications to the Loan Documents, and Lender is willing to do so on the terms
and conditions set forth below; and

WHEREAS, Lender is the owner and holder of the Note and Borrower is the owner of
the legal and equitable title to the Mortgaged Property;

NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

1. Defined Terms.  Capitalized terms used but not defined in this Agreement
shall have the meaning given to such capitalized terms in the Loan Agreement.

2. Extension of Maturity Date.  The maturity date of the Note is hereby extended
to May 30, 2009, and the liens, security interests, assignments and other rights
evidenced by the Loan Documents are hereby renewed and extended to secure
payment of the Note as extended hereby.

3. Modification of Interest Rate.

(a)           The definition of Applicable Base Rate in the Note is hereby
amended in its entirety to read as follows:
 
“'Applicable Base Rate' shall mean the lesser of (a) the Base Rate from time to
time in effect minus one and one-tenth of one percent (1.10%) per annum, or (b)
the Maximum Lawful Rate, but in no event shall the Applicable Base Rate ever be
less than the Floor Rate.  Fluctuations in the Applicable Base Rate shall become
effective immediately, without necessity for any notice whatsoever."
 
(b)           The definition of Applicable LIBOR Rate in the Note is hereby
amended in its entirety to read as follows:
 
“'Applicable LIBOR Rate' shall mean the lesser of (a) the rate of interest equal
to the Adjusted LIBOR Rate in effect for the subject Interest Period plus one
and sixty-five one hundredths percent (1.65%) or (b) the Maximum Lawful Rate,
but in no event shall the Applicable LIBOR Rate ever be less than the Floor
Rate."
 

4. Representations and Warranties.  Borrower hereby represents and warrants that
(a) Borrower is the sole legal and beneficial owner of the Mortgaged Property;
(b) Borrower is duly organized and legally existing under the laws of the State
of Texas; (c) the execution and delivery of, and performance under this
Agreement are within Borrower's power and authority without the joinder or
consent of any other party and have been duly authorized by all requisite action
and are not in contravention of law or the powers of Borrower's articles of
incorporation and bylaws; (d) this Agreement constitutes the legal, valid and
binding obligations of Borrower enforceable in accordance with its terms; (e)
the execution and delivery of this Agreement by Borrower do not contravene,
result in a breach of or constitute a default under any deed of trust, loan
agreement, indenture or other contract, agreement or undertaking to which
Borrower is a party or by which Borrower or any of its properties may be bound
(nor would such execution and delivery constitute such a default with the
passage of time or the giving of notice or both) and do not violate or
contravene any law, order, decree, rule or regulation to which Borrower is
subject; and (f) to the best of Borrower's knowledge there exists no uncured
default under any of the Loan Documents.  Borrower agrees to indemnify and hold
Lender harmless against any loss, claim, damage, liability or expense (including
without limitation reasonable attorneys' fees) incurred as a result of any
representation or warranty made by it herein proving to be untrue in any
respect.

5. Further Assurances.  Borrower, upon request from Lender, agrees to execute
such other and further documents as may be reasonably necessary or appropriate
to consummate the transactions contemplated herein or to perfect the liens and
security interests intended to secure the payment of the loan evidenced by the
Note.

6. Default; Remedies.  If Borrower shall fail to keep or perform any of the
covenants or agreements contained herein or if any statement, representation or
warranty contained herein is false, misleading or erroneous in any material
respect, Borrower shall be deemed to be in default under the Deed of Trust and
Lender shall be entitled at its option to exercise any and all of the rights and
remedies granted pursuant to the any of the Loan Documents or to which Lender
may otherwise be entitled, whether at law or in equity.

7. Endorsement to Mortgagee Title Policy.  Contemporaneously with the execution
and delivery hereof, Borrower shall, at its sole cost and expense, obtain and
deliver to Lender an Endorsement of the Mortgagee Title Policy insuring the lien
of the Deed of Trust, under Procedural Rule P-9b(3) of the applicable title
insurance rules and regulations, in form and content acceptable to Lender,
stating that the company issuing said Mortgagee Title Policy will not claim that
policy coverage has terminated or that policy coverage has been reduced, solely
by reason of the execution of this Agreement.

8. Ratification of Loan Documents.  Except as provided herein, the terms and
provisions of the Loan Documents shall remain unchanged and shall remain in full
force and effect.  Any modification herein of any of the Loan Documents shall in
no way adversely affect the security of the Deed of Trust and the other Loan
Documents for the payment of the Note.  The Loan Documents as modified and
amended hereby are hereby ratified and confirmed in all respects.  All liens,
security interests, mortgages and assignments granted or created by or existing
under the Loan Documents remain unchanged and continue, unabated, in full force
and effect, to secure Borrower's obligation to repay the Note.

9. Liens Valid; No Offsets or Defenses.  Borrower hereby acknowledges that the
liens, security interests and assignments created and evidenced by the Loan
Documents are valid and subsisting and further acknowledges and agrees that
there are no offsets, claims or defenses to any of the Loan Documents.

12.           Merger; No Prior Oral Agreements.  This Agreement supersedes and
merges all prior and contemporaneous promises, representations and
agreements.  No modification of this Agreement or any of the Loan Documents, or
any waiver of rights under any of the foregoing, shall be effective unless made
by supplemental agreement, in writing, executed by Lender and Borrower.  Lender
and Borrower further agree that this Agreement may not in any way be explained
or supplemented by a prior, existing or future course of dealings between the
parties or by any prior, existing, or future performance between the parties
pursuant to this Agreement or otherwise.

13.           Notices.  Any notice or communication required or permitted
hereunder or under any of the Loan Documents shall be given in writing and sent
in the manner required under the Loan Agreement.

14.           Costs and Expenses.  Contemporaneously with the execution and
delivery hereof, Borrower shall pay, or cause to be paid, all costs and expenses
incident to the preparation hereof and the consummation of the transactions
specified herein, including without limitation title insurance policy
endorsement charges, recording fees and fees and expenses of legal counsel to
Lender.

15.           Release of Lender.  Borrower hereby releases, remises, acquits and
forever discharges Lender, together with its employees, agents, representatives,
consultants, attorneys, fiduciaries, servants, officers, directors, partners,
predecessors, successors and assigns, subsidiary corporations, parent
corporations, and related corporate divisions (all of the foregoing hereinafter
called the "Released Parties"), from any and all actions and causes of action,
judgments, executions, suits, debts, claims, demands, liabilities, obligations,
damages and expenses of any and every character, known or unknown, direct and/or
indirect, at law or in equity, of whatsoever kind or nature, whether heretofore
or hereafter accruing, for or because of any matter or things done, omitted or
suffered to be done by any of the Released Parties prior to and including the
date hereof, and in any way directly or indirectly arising out of or in any way
connected to this Agreement or any of the Loan Documents, or any of the
transactions associated therewith, or the Mortgaged Property, including
specifically but not limited to claims of usury.

16.           Counterparts.  This Agreement may be executed in any number of
counterparts with the same effect as if all parties hereto had signed the same
document.  All such counterparts shall be construed together and shall
constitute one instrument, but in making proof hereof it shall only be necessary
to produce one such counterpart.

17.           Severability.  If any covenant, condition, or provision herein
contained is held to be invalid by final judgment of any court of competent
jurisdiction, the invalidity of such covenant, condition, or provision shall not
in any way affect any other covenant, condition or provision herein contained.

18.           Time of the Essence.  It is expressly agreed by the parties hereto
that time is of the essence with respect to this Agreement.

19.           Representation by Counsel.  The parties acknowledge and confirm
that each of their respective attorneys have participated jointly in the review
and revision of this Agreement and that it has not been written solely by
counsel for one party.  The parties hereto therefore stipulate and agree that
the rule of construction to the effect that any ambiguities are to or may be
resolved against the drafting party shall not be employed in the interpretation
of this Agreement to favor either party against the other.

20.           Governing Law.  This Agreement and the rights and duties of the
parties hereunder shall be governed for all purposes by the law of the State of
Texas and the law of the United States applicable to transactions within said
State.

21.           Successors and Assigns.  The terms and provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

22.           Notice of No Oral Agreements.  Borrower and Lender hereby take
notice of and agree to the following:

A.           PURSUANT TO SUBSECTION 26.02(b) OF THE TEXAS BUSINESS AND COMMERCE
CODE, A LOAN AGREEMENT IN WHICH THE AMOUNT INVOLVED THEREIN EXCEEDS $50,000 IN
VALUE IS NOT ENFORCEABLE UNLESS THE AGREEMENT IS IN WRITING AND SIGNED BY THE
PARTY TO BE BOUND OR BY THAT PARTY'S AUTHORIZED REPRESENTATIVE.

B.           PURSUANT TO SUBSECTION 26.02(c) OF THE TEXAS BUSINESS AND COMMERCE
CODE, THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO THE LOAN DOCUMENTS SHALL BE
DETERMINED SOLELY FROM THE LOAN DOCUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN
THE PARTIES ARE SUPERSEDED BY AND MERGED INTO THE LOAN DOCUMENTS.

C.           THE LOAN DOCUMENTS AND THIS AGREEMENT REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES THERETO.  THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, this Agreement is executed on the respective dates of
acknowledgement below but is effective as of the date first above written.

BORROWER:

STRATUS PROPERTIES INC.,
a Delaware corporation

By:   /s/ John E.
Baker                                                             
John E. Baker, Senior Vice President

STRATUS PROPERTIES OPERATING CO., L.P., a Delaware limited partnership

 
By:
STRS L.L.C., a Delaware limited liability company, General Partner

 
By
Stratus Properties Inc., a Delaware corporation,  Sole Member

By:       /s/ John E. Baker                                               
John E. Baker,
Senior Vice President

CIRCLE C LAND, L.P.,
a Texas limited partnership

 
By:
Circle C GP, L.L.C., a Delaware limited liability company, General Partner

 
By
Stratus Properties Inc., a Delaware corporation, Sole Member

By:       /s/ John E. Baker                                               
John E. Baker,
Senior Vice President

AUSTIN 290 PROPERTIES, INC.,
a Texas corporation

By:    /s/ John E.
Baker                                                                       
John E. Baker, Senior Vice President

LENDER:

COMERICA BANK

By:   /s/ Shery R.
Layne                                                                        
Shery Layne, Vice President

STATE OF TEXAS                              §
§
COUNTY OF TRAVIS                        §

This instrument was acknowledged before me on the 22nd day of June, 2007, by
John E. Baker, Senior Vice President of Stratus Properties Inc., a Delaware
corporation, on behalf of said corporation.

                                /s/ Jody L. Bickel
Notary Public, State of Texas
My Commission Expires: 2/24/2010
Printed Name of Notary: Jody L. Bickel

STATE OF TEXAS                              §
§
COUNTY OF TRAVIS                        §

This instrument was acknowledged before me on the 22nd day of June, 2007, by
John E. Baker, Senior Vice President of Stratus Properties Inc., a Delaware
corporation, Sole Member of STRS L.L.C., a Delaware limited liability company,
General Partner of Stratus Properties Operating Co., L.P., a Delaware limited
partnership, on behalf of said corporation, limited liability company and
limited partnership.

                                /s/ Jody L. Bickel
Notary Public, State of Texas
My Commission Expires: 2/24/2010
Printed Name of Notary: Jody L. Bickel

STATE OF TEXAS                              §
§
COUNTY OF TRAVIS                        §

This instrument was acknowledged before me on the 22nd day of June, 2007, by
John E. Baker, Senior Vice President of Stratus Properties Inc., a Delaware
corporation, Sole Member of Circle C GP, L.L.C., a Delaware limited liability
company, General Partner of Circle C Land, L.P., a Delaware limited partnership,
on behalf of said corporation, limited liability company limited partnership.
 

                                /s/ Jody L. Bickel
Notary Public, State of Texas
My Commission Expires: 2/24/2010
Printed Name of Notary: Jody L. Bickel

STATE OF TEXAS                              §
§
COUNTY OF TRAVIS                        §

This instrument was acknowledged before me on the 22nd day of June, 2007, by
John E. Baker, Senior Vice President of Austin 290 Properties Inc., a Delaware
corporation, on behalf of said corporation.
 

                                /s/ Jody L. Bickel
Notary Public, State of Texas
My Commission Expires: 2/24/2010
Printed Name of Notary: Jody L. Bickel

STATE OF TEXAS                             §
§
COUNTY OF DALLAS                      §

This instrument was acknowledged before me on the 27 day of June, 2007, by Shery
Layne, Vice President of Comerica Bank, on behalf of said bank.

 

                                /s/ Allene Medlock
Notary Public, State of Texas
My Commission
Expires: 11/14/2007                                                                          
Printed Name of Notary: Allene Medlock

CONSENT OF CALERA COURT

The undersigned, Calera Court, L.P., hereby executes the Agreement to evidence
its agreement to be bound by the extension of the Maturity Date, and confirms
and agrees that all of its obligations under the Loan Documents applicable to it
remain in full force and effect.

Executed on the date of acknowledgement below but effective as of May 30, 2007.

CALERA COURT, L.P. a Texas limited partnership

 
By:
Calera Court Management, L.L.C., a Texas limited liability company, its general
partner

 
By:
Stratus Properties Operating Co., L.P., a Delaware limited partnership, its
Manager

 
By:
STRS L.L.C., a Delaware limited liability company, its general partner

 
By:
Stratus Properties Inc., a Delaware corporation, its Sole Member

 
By:
 /s/ John E. Baker

John E. Baker,
Senior Vice President

STATE OF TEXAS                                              §
§
COUNTY OF TRAVIS                                        §

This instrument was acknowledged before me on the 22nd day of June, 2007, by
John E. Baker, Senior Vice President of Stratus Properties Inc., a Delaware
corporation, Sole Member of STRS L.L.C., a Delaware limited liability company,
General Partner of Stratus Properties Operating Co., L.P., a Delaware limited
partnership, Manager of Calera Court Management, L.L.C., a Texas limited
liability company, General Partner of Calera Court, L.P., a Texas limited
partnership, on behalf of each said entity and said limited partnership.

                                /s/ Jody L. Bickel
Notary Public in and for the State of Texas

Printed/Typed Name of Notary
My Commission Expires:
2/24/2010

_____________________.

CONSENT OF STRATUS JV

The undersigned, Oly Stratus Barton Creek I Joint Venture, hereby executes the
Agreement to evidence its agreement to be bound by the extension of the Maturity
Date, and confirms and agrees that all of its obligations under the Loan
Documents applicable to it remain in full force and effect.

Executed on the date of acknowledgement below but effective as of May 30, 2007.

OLY STRATUS BARTON CREEK I JOINT VENTURE,
a Texas joint venture
 
 
By:
STRS L.L.C., a Delaware limited liability company, its General Partner

 
 
By:
Stratus Properties Inc., a Delaware corporation, its Sole Member

By:   /s/ John E.
Baker                                                             
John E. Baker, Senior Vice President

 
By:
Stratus ABC West I, L.P., a Texas limited partnership, Venturer

 
 
By:
STRS L.L.C., a Delaware limited liability company, General Partner

 
By:
Stratus Properties Inc., a Delaware corporation, its sole member

 

By:      /s/ John E. Baker                                                
John E. Baker,
Senior Vice President

STATE OF TEXAS                              §
§
COUNTY OF TRAVIS                         §
 
The foregoing instrument was acknowledged before me on the 22nd day of June,
2007, by John E. Baker, Senior Vice President of Stratus Properties Inc., a
Delaware corporation, Sole Member of STRS L.L.C., a Delaware limited liability
company, venturer of Oly Stratus Barton Creek I Joint Venture, a Texas joint
venture, on behalf of each such entities.
 

 
[ S E A L
]                                                                           /s/
Jody L. Bickel
Notary Public, State of Texas

My Commission
Expires:                                                                           
(Printed Name of Notary Public)
_2/24/2010__________
 

STATE OF TEXAS                              §
§
COUNTY OF TRAVIS                         §
 
The foregoing instrument was acknowledged before me on the 22nd day of June,
2007, by John E. Baker, Senior Vice President of Stratus Properties Inc., a
Delaware corporation, Sole Member of STRS L.L.C., a Delaware limited liability
company, General Partner of Stratus ABC West I, L.P., a Texas limited
partnership, venturer of Oly Stratus Barton Creek I Joint Venture, a Texas joint
venture, on behalf of each such entities.
 

 
[ S E A L
]                                                                           /s/
Jody L. Bickel
Notary Public, State of Texas

My Commission
Expires:                                                                           
(Printed Name of Notary Public)
__2/24/2010__________