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Exhibit 10.1

 
NOTE MODIFICATION AGREEMENT
 
THIS NOTE MODIFICATION AGREEMENT (this "Agreement") is made and entered into
effective as of the 30th day of June, 2010 by and among CJUF II STRATUS BLOCK 21
LLC, a Delaware limited liability company (the "Borrower"), STRATUS PROPERTIES
INC., a Delaware corporation and CANYON-JOHNSON URBAN FUND II LP, a Delaware
limited partnership (individually and collectively, the "Guarantors"), and BEAL
BANK NEVADA, a Nevada thrift (the "Lender").
 
W I T N E S S E T H:
 
A. Lender has agreed to make a loan to the Borrower (the "Loan"), which Loan is
evidenced by that certain Amended and Restated Promissory Note (the "Note"),
dated October 21, 2009, in the stated principal amount of $120,000,000.00,
executed and delivered by the Borrower and payable to the order of the Lender.
 
B. The Loan is being made pursuant to that certain Amended and Restated
Construction Loan Agreement, dated October 21, 2009, by and between the Borrower
and the Lender (the "Loan Agreement").
 
C. The Guarantors have guaranteed the obligations of the Borrower with regard to
the Loan pursuant to that certain Amended and Restated Guaranty Agreement, dated
October 21, 2009, executed by the Guarantors for the benefit of the Lender.
 
D. The Loan Agreement contemplates that the Borrower will enter into a
Management Agreement with Live Nation Worldwide, Inc. ("Live Nation") to manage
the Venue, as such term is defined in the Loan Agreement.  The Borrower has
requested that the Lender agree that the Borrower (i) is not obligated to enter
into such a Management Agreement with Live Nation and (ii) instead may manage
the Venue itself, with a number of entities, including Live Nation, being
allowed to book events at the Venue.  The Lender has agreed with such request of
the Borrower provided the Note is modified as provided herein.
 
NOW, THEREFORE, for and in consideration of the sum of Ten & No/100 Dollars
($10.00), the mutual covenants and agreements herein contained, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and confessed by each of the parties hereto, the parties hereto
hereby agree as follows:
 
1.           The Note is hereby modified as follows: subsection 1(b) of the Note
is amended to be and read as follows "(b) "Base Rate" shall mean the per annum
rate equal to The Wall Street Journal Prime Rate, as it changes from time to
time, plus six and three-quarters percent    (6 ¾%)."
 
2.           The Lender agrees that the Borrower is not obligated to enter into
a Management Agreement with Live Nation to manage the Venue. The Borrower may
manage the Venue "in-house", however any agreements the Borrower enters into
with regard to the management, use and/or operation of the Venue, including,
without limitation, the Block 21 Master Agreement with Capital of Texas Public
Telecommunications Council (the "Master Agreement"), which is
 
 
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still required as a Venue Document, as such term is defined in the Loan
Agreement, (i) are subject to the review and approval of the Lender, as provided
in the Loan Agreement, and (ii) will be considered Venue
Documents.  Accordingly, neither an agreement with Live Nation nor any other
agreements for the management of the Venue will be a requirement for Full Loan
Opening under the Loan Agreement; however, the delivery to the Lender of a fully
executed and effective Master Agreement, in form and on terms acceptable to the
Lender as required by the Loan Agreement is still a condition to Full Loan
Opening.
 
3.           AS A MATERIAL INDUCEMENT TO THE LENDER TO ENTER INTO THIS
AGREEMENT, THE BORROWER AND THE GUARANTORS, ON BEHALF OF THEMSELVES AND THEIR
RESPECTIVE SUCCESSORS, ASSIGNS, HEIRS, LEGAL REPRESENTATIVES AND CONSTITUENTS
(WHETHER OR NOT A PARTY HERETO) (THE BORROWER, THE GUARANTORS AND SUCH
SUCCESSORS, ASSIGNS, HEIRS, LEGAL REPRESENTATIVES AND CONSTITUENTS BEING
REFERRED TO HEREIN COLLECTIVELY AND INDIVIDUALLY, AS "OBLIGORS, ET AL."), HEREBY
FULLY, FINALLY AND COMPLETELY RELEASE AND FOREVER DISCHARGE THE LENDER, AND ITS
SUCCESSORS, ASSIGNS, AFFILIATES, SUBSIDIARIES, PARENTS, OFFICERS, SHAREHOLDERS,
DIRECTORS, EMPLOYEES, ATTORNEYS AND AGENTS, PAST, PRESENT AND FUTURE, AND THEIR
RESPECTIVE HEIRS, PREDECESSORS, SUCCESSORS AND ASSIGNS (COLLECTIVELY AND
INDIVIDUALLY, "LENDER, ET AL.") OF AND FROM ANY AND ALL CLAIMS, CONTROVERSIES,
DISPUTES, LIABILITIES, OBLIGATIONS, DEMANDS, DAMAGES, EXPENSES (INCLUDING,
WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES), DEBTS, LIENS, ACTIONS AND
CAUSES OF ACTION OF ANY AND EVERY NATURE WHATSOEVER, INCLUDING, WITHOUT
LIMITATION, ANY THEREOF RELATING TO THE LOAN, AND WAIVE AND RELEASE ANY DEFENSE,
RIGHT OF COUNTERCLAIM, RIGHT OF SET-OFF OR DEDUCTION TO THE PAYMENT OF THE
INDEBTEDNESS EVIDENCED BY THE NOTE AND/OR ANY OTHER LOAN DOCUMENT WHICH
OBLIGORS, ET AL. NOW HAVE OR MAY CLAIM TO HAVE AGAINST LENDER, ET AL., OR ANY
THEREOF, ARISING OUT OF, CONNECTED WITH OR RELATING TO ANY AND ALL ACTS,
OMISSIONS OR EVENTS OCCURRING PRIOR TO THE EXECUTION OF THIS AGREEMENT.
 
THE BORROWER AND THE GUARANTORS HEREBY ACKNOWLEDGE, REPRESENT AND WARRANT TO THE
LENDER THAT THEY AGREE TO ASSUME THE RISK OF ANY AND ALL UNKNOWN, UNANTICIPATED
OR MISUNDERSTOOD DEFENSES AND CLAIMS WHICH ARE RELEASED BY THE PROVISIONS HEREOF
IN FAVOR OF LENDER, ET AL., AND WAIVE AND RELEASE ALL RIGHTS AND BENEFITS WHICH
THEY MIGHT OTHERWISE HAVE UNDER ANY FEDERAL, STATE OR LOCAL LAW OR STATUTE WITH
REGARD TO THE RELEASE OF SUCH UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES
OR CLAIMS, INCLUDING THE PROVISIONS OF SECTION 1542 OF THE CALIFORNIA CIVIL CODE
OR ANY SIMILAR LAW, WHICH PROVIDES: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF
 
 
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KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
 
THE BORROWER AND THE GUARANTORS ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTOOD
EACH OF THE PROVISIONS OF THIS RELEASE. THE BORROWER AND THE GUARANTORS FULLY
UNDERSTAND THAT THIS RELEASE CONSTITUTES A GENERAL RELEASE, AND THAT THEY HAVE
IMPORTANT LEGAL CONSEQUENCES. THE BORROWER AND THE GUARANTORS UNDERSTAND AND
CONFIRM THAT THEY ARE HEREBY RELEASING ANY AND ALL RELEASED CLAIMS THAT EITHER
MAY INDIVIDUALLY HAVE AS OF THE DATE HEREOF.  THE BORROWER AND THE GUARANTORS
HEREBY ACKNOWLEDGE THAT THEY HAVE HAD A FULL AND FAIR OPPORTUNITY TO OBTAIN A
LAWYER'S ADVICE CONCERNING THE LEGAL CONSEQUENCES OF THIS RELEASE AND WAIVER.
 
4.           As an additional material inducement to the Lender to enter into
this Agreement, the Borrower and the Guarantors hereby represent and warrant to
the Lender that:
 
(a)  
The Loan Documents, as such term is defined in the Loan Agreement, as such Loan
Documents are modified hereby, are in full force and effect, and neither the
Borrower nor either Guarantor has any defense, counterclaim or offset to the
Loan or any of the Loan Documents, as modified hereby;

 
(b)  
The representations and warranties of the Borrower and the Guarantors set forth
in the Loan Documents are true and correct in all material respects as of the
date hereof and are hereby reaffirmed as if such representations and warranties
had been made on the date hereof and shall continue in full force and effect;
and

 
(c)  
This Agreement and the Loan Documents constitute the legal, valid and binding
obligations of the Borrower and the Guarantors, enforceable against the
Borrower  and the Guarantors in accordance with the terms hereof and thereof.

 
The representations and warranties of the Borrower and the Guarantors contained
in this Agreement and in the Loan Documents shall survive the consummation of
the transactions contemplated by this Agreement.
 
5.           In addition to the documents, instruments and acts described in
this Agreement and which are to be executed and/or delivered and/or taken
pursuant to this Agreement, the Borrower and the Guarantors agree to execute
and/or deliver from time to time upon request by the Lender such other documents
and instruments, and take such other action, as the Lender may request or
require to more fully and completely evidence and carry out the transactions
contemplated by this Agreement. The Borrower agrees to reimburse the Lender on
demand for all costs and expenses incurred by the Lender with regard to the
modification of the Note effected by this Agreement, including, without
limitation, all attorneys' fees and related costs.  Concurrently with the
Borrower's execution and delivery hereof, the Borrower is delivering to the
Lender resolutions of the governing bodies of Borrower and each Guarantor
authorizing the
 
 
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execution, delivery and performance of this Agreement on behalf of the Borrower
and the Guarantors.  Concurrently with the execution and delivery of this
Agreement, the Borrower, the Guarantors and the Lender are entering into a
letter agreement by which they each approve a new Budget, as such term is
defined in the Loan Agreement.  Such new Budget does not require an increase in
the maximum principal amount of the Loan.
 
6.           The Borrower and the Guarantors affirm, confirm, ratify, renew and
extend the debts, duties, obligations, liabilities, rights, titles, security
interests, liens, powers and privileges created or arising by virtue of the Loan
Documents, as modified hereby, until all of the indebtedness and obligations
relating to the Loan have been paid and performed in full.  The Borrower and the
Guarantors confirm that Lender has not released, forgiven, discharged, impaired,
waived or relinquished, and does not hereby release, forgive, discharge, impair,
waive or relinquish any rights, titles, interests, liens, security interests,
collateral, parties, remedies or any other matter with respect to the Loan, or
any of the Loan Documents, but rather the Lender is expressly retaining and
reserving the same to their fullest extent.
 
7.           This Agreement shall be binding upon the parties hereto and their
respective heirs, personal representatives, successors and assigns.  Nothing
contained in this Section shall act to amend or modify any of the provisions of
the Loan Documents which restrict or prohibit assignment or transfer.
 
8.           Neither this Agreement nor any provision of the Loan Documents may
be waived, modified or amended, except by an instrument in writing signed by the
party against which the enforcement of such waiver, modification or amendment is
sought, and then only to the extent set forth in such instrument.
 
9.           THIS AGREEMENT AND THE OTHER DOCUMENTS ENTERED INTO WITH REGARD TO
THE LOAN REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.  THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES.
 
10.           This Agreement may be executed in multiple counterparts.
 
 
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BORROWER:
 
CJUF II STRATUS BLOCK 21 LLC,
     By:                Stratus Block 21 Investments, L.P.,
Manager

 
By:
Stratus Block 21 Investments GP, L.L.C.,

General Partner
 
By:        /s/ Erin D. Pickens                                         
Name:   Erin D. Pickens
Title:     Senior Vice President
 

 
 
       By:              CJUF II Block 21 Member, LLC,
  Member

 
By:
Canyon-Johnson Urban Fund II, L.P.,

             Member
 
By:        Canyon-Johnson Realty Advisors II, LLC,
 General Partner
 
By:       /s/ K. Robert Turner                                           
Name:  K. Robert Turner
Title:    Managing Partner
 
 
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GUARANTORS:

STRATUS PROPERTIES INC.

By:       /s/ Erin D. Pickens
Name:  Erin D. Pickens
Title:    Senior Vice President

CANYON-JOHNSON URBAN FUND II, LP
By:  Canyon-Johnson Realty Advisors II, LLC,
          General Partner

By:      /s/ K. Robert Turner
    Name:  K. Robert Turner
    Title:    Managing Partner

LENDER:

BEAL BANK NEVADA

By:       /s/ David C.
Meek                                                      
Name:  David C. Meek
Title:    Authorized Signatory
 
 
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STATE OF TEXAS                                                           §
     §
COUNTY OF TRAVIS                                                      §

The foregoing instrument was acknowledged before me this 30 day of June, 2010,
by Erin D. Pickens, the Senior Vice President of Stratus Block 21 Investments
GP, L.L.C., a Texas limited liability company, General Partner of Stratus Block
21 Investments, L.P., a Texas limited partnership, Manager of CJUF II Stratus
Block 21 LLC, a Delaware limited liability company (the "Borrower"), on behalf
of the Borrower.

                                                                            
   /s/ Carol A. Fahs
Notary Public

Carol A. Fahs
Printed Name

My Commission Expires: 4/8/14

STATE OF CALIFORNIA                                               §
     §
COUNTY OF LOS ANGELES                                          §

On the 28 day of June, in the year 2010, before me, Zoe Loomis Mann, Notary
Public, personally appeared K. Robert Turner, who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

/s/ Zoe Loomis Mann
Signature of Notary Public
 
 
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STATE OF TEXAS                                                           §
             §
COUNTY OF TRAVIS                                                      §

The foregoing instrument was acknowledged before me this 30 day of June, 2010,
by Erin D. Pickens, the SR. VP of Stratus Properties Inc. He or she is
personally known to me or has produced a driver's license as identification.

/s/ Carol A. Fahs
Notary Public

Carol A. Fahs
Printed Name

My Commission Expires: 4/8/14

STATE OF TEXAS                                                          §
                            §
COUNTY OF COLLIN                                                     §

Before me, on this 1st day of July, 2010, personally appeared David C. Meek,
Authorized Signatory of BEAL BANK NEVADA, a Nevada thrift, known to me to be the
person whose name is subscribed to the within instrument and acknowledged to me
that he executed the same in his authorized capacity, and that by his signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.

/s/ Elizabeth M. Cowan
Notary Public
My Commission expires: 4-29-12
 
 
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