Exhibit 10.11


    Exhibit
      10.11

    


    When
      recorded, return to:

    


    Locke
      Liddell & Sapp LLP

    2200
      Ross
      Avenue, Suite 2200

    Dallas,
      Texas 75201-6776

    Attention:
      Mark M. Sloan

    


     

    FOURTH
      MODIFICATION AND EXTENSION AGREEMENT

     

    This
      FOURTH MODIFICATION AND EXTENSION AGREEMENT (“Agreement”)
      is
      made to be effective as of the 30th day of May, 2005 (the “Effective
      Date”),
      by
      and between COMERICA
      BANK,
      a
      Michigan banking corporation, successor by merger to Comerica Bank-Texas
      (“Lender”),
      and
STRATUS
      PROPERTIES INC.,
      a Delaware corporation, STRATUS
      PROPERTIES OPERATING CO., L.P.,
      a
      Delaware limited partnership, CIRCLE
      C LAND, L.P.,
      a Texas
      limited partnership, f/k/a Circle C Land Corp., and AUSTIN
      290 PROPERTIES, INC.,
      a Texas
      corporation (herein individually and collectively referred to as “Borrower”),
      and
OLY
      STRATUS BARTON CREEK I JOINT VENTURE,
      a
      Texas
      joint venture ("Barton
      Creek JV").

     

     

    W
      I T N E
      S S T H :

     

    WHEREAS,
      Borrower, as Maker, executed that certain Promissory Note dated December 16,
      1999, in the original principal amount of $20,000,000.00 U.S., in favor of
      and
      payable to the order of Lender, as Payee, which Promissory Note has been amended
      (including, without limitation, a reduction in the stated principal amount
      of
      such Promissory Note to $5,000,000.00 U.S. and the addition of a limited
      revolving feature) pursuant to (i) that certain Amendment to Promissory Note
      dated as of December 27, 2000 (the “First
      $5,000,000.00 Revolving Note Amendment”)
      executed by and between Borrower and Lender, (ii) that certain Second Amendment
      to Promissory Note (the “Second
      $5,000,000.00 Revolving Note Amendment”)
      dated
      as of December 18, 2001 executed by and between Borrower and Lender, (iii)
      that
      certain Third Modification and Extension Agreement dated as of June 30, 2003
      executed by and between Borrower and Lender (the "Third
      Extension"),
      and
      (iv) that certain Third Amendment to Promissory Note dated as of June 23, 2004
      (the “Third
      $5,000,000.00 Revolving Note Amendment”)
      executed by and between Borrower and Lender (said note, as amended by the First
      $5,000,000.00 Revolving Note Amendment, the Second $5,000,000.00 Revolving
      Note
      Amendment, the Third Extension and the Third $5,000,000.00 Revolving Note
      Amendment, is herein called the “$5,000,000.00
      Revolving Note”),
      and
      which evidences an indebtedness (the “$5,000,000.00
      Revolving Loan”)
      from
      Lender to Borrower in connection with and pursuant to that certain Loan
      Agreement dated December 16, 1999, executed by and between Borrower and Lender,
      which loan agreement was amended by (w) that certain Amendment to Loan Agreement
      dated December 27, 2000 (the "First
      Loan Modification")
      executed by and between Borrower and Lender, (y) the Second Amendment to Loan
      Agreement dated December 18, 2001 (the "Second
      Loan Modification")
      executed by and between Borrower and Lender, (y) the Third Extension, and (z)
      that certain Third Amendment to Loan Agreement dated as of June 23, 2004 (the
      "Third
      Loan Modification")
      executed by and between Borrower and Lender (said loan agreement, as amended
      by
      the First Loan Modification, the Second Loan Modification, the Third Extension
      and the Third Loan Modification, is herein called the “Loan
      Agreement”);
      and

     

    WHEREAS,
      Borrower, as Maker, executed that certain Revolving Credit Note dated December
      16, 1999, in the original principal amount of $10,000,000.00 U.S., in favor
      of
      and payable to the order of Lender, as Payee, which Revolving Credit Note was
      amended (whereby the stated principal amount of such Revolving Credit Note
      was
      increased to $25,000,000.00 U.S.) pursuant to (i) that certain Amendment to
      Revolving Credit Note dated as of December 27, 2000 (the “First
      Revolving Credit Note Amendment”)
      executed by and between Borrower and Lender, (ii) that certain Second Amendment
      to the Revolving Credit Note dated as of December 18, 2001 (the “Second
      Revolving Credit Note Amendment”)
      executed by and between Borrower and Lender, (iii) the Third Extension, and
      (iv)
      that certain Third Amendment to the Revolving Credit Note dated as of June
      23,
      2004 (the “Third
      Revolving Credit Note Amendment”)
      executed by Borrower and Lender (said note, as amended by the First Revolving
      Credit Note Amendment, the Second Revolving Credit Note Amendment, the Third
      Extension and the Third Revolving Credit Note Amendment, is herein called the
      “Revolving
      Credit Note”),
      which
      Revolving Credit Note evidences a loan (the “Revolving
      Credit Loan”)
      made
      by Lender to Borrower in connection with and pursuant to the Loan Agreement
      (the
      Revolving Credit Note and the $5,000,000.00 Revolving Note, each as amended,
      are
      hereinafter collectively referred to as the “Notes”,
      and
      the Revolving Credit Loan and the $5,000,000.00 Revolving Loan are hereinafter
      collectively referred to as the “Loans”);
      and


     

    WHEREAS,
      the $5,000,000.00 Revolving Note and the Revolving Credit Note are
      cross-defaulted and cross-collateralized as evidenced by a Cross-Default and
      Cross-Collateralization Agreement recorded in multiple counties where the
      Mortgaged Property is located, and are secured by, among other things and
      without limitation, multiple Deeds of Trust and Second Lien Deeds of Trust,
      as
      modified by (i) the First Deed of Trust Modification (as hereinafter defined),
      (ii) the Second Deed of Trust Modification (as hereinafter defined), (iii)
      the
      Third Extension and (iv) the Third Modification Agreement dated as of June
      23,
      2004 executed by and between Borrower, Barton Creek JV and Lender, recorded
      as
      Document No. 2004127628 of the Real Property Records of Travis County, Texas
      and
      as Document No. 04019600 of the Real Property Records of Hays County, Texas
      (said Deeds of Trust and Second Lien Deeds of Trust as modified, being herein
      collectively referred to as the “Deeds
      of Trust”
      or the
“Lien
      Instruments”)
      dated
      December 16, 1999, executed by Borrower and originally delivered to GARY
      W. ORR,
      as
      trustee, which trustee has been changed to MELINDA
      A. CHAUSSE, (“Trustee”),
      for
      the benefit of Lender, which Deeds of Trust are described as
      follows:

     

    
      	 	
              (1)

            	
              Deed
                of Trust dated December 16, 1999, executed by Stratus Properties
                Operating
                Co., L.P. and delivered to Trustee for the benefit of Lender, recorded
                under Document Number 1999158707 of the Official Public Records of
                Travis
                County, Texas, covering real property located in Travis County, Texas,
                as
                more particularly described
                therein;

            


    

     

    
      	 	
              (2)

            	
              Deed
                of Trust dated December 16, 1999, executed by Circle C Land Corp.
                and
                delivered to Trustee for the benefit of Lender, recorded under Document
                Number 1999158708 of the Official Public Records of Travis County,
                Texas,
                covering real property located in, Travis County, Texas, as more
                particularly described therein;

            


    

     

    
      	 	
              (3)

            	
              Second
                Lien Deed of Trust dated December 16, 1999, executed by Circle C
                Land
                Corp. and delivered to Trustee for the benefit of Lender, recorded
                under
                Document Number 1999158709 of the Official Public Records of Travis
                County, Texas, and under Document Number 9929849 of the Deed Records
                of
                Hays County, Texas, covering real property located in Travis and
                Hays
                Counties, Texas, as more particularly described
                therein;

            


    

     

    
      	 	
              (4)

            	
              Deed
                of Trust dated December 16, 1999, executed by Stratus Properties
                Operating
                Co., L.P. and delivered to Trustee for the benefit of Lender, recorded
                under Document Number 1999158710 of the Official Public Records of
                Travis
                County Texas, covering real property located in Travis County, Texas,
                as
                more particularly described
                therein;

            


    

     

    
      	 	
              (5)
                

            	
              Deed
                of Trust dated December 16, 1999, executed by Austin 290 Properties,
                Inc.
                and delivered to Trustee for the benefit of Lender, recorded under
                Document Number 1999158711 of the Official Public Records of Travis
                County, Texas, covering real property located in Travis County, Texas,
                as
                more particularly described
                therein;

            


    

     

    
      	 	
              (6)

            	
              Deed
                of Trust dated December 16, 1999, executed by Stratus Properties
                Operating
                Co., L.P. and delivered to Trustee for the benefit of Lender, recorded
                under Document Number 1999158712 of the Official Public Records of
                Travis
                County, Texas, covering real property located in Travis County, Texas,
                as
                more particularly described
                therein;

            


    

     

    
      	 	
              (7)

            	
              Deed
                of Trust dated December 16, 1999, executed by Stratus Properties
                Operating
                Co., L.P. and delivered to Trustee for the benefit of Lender, recorded
                under Clerk’s File Number U138051 of the Official Public Records of Real
                Property of Harris County, Texas, covering real property located
                in Harris
                County, Texas, as more particularly described therein;
                and

            


    

     

    
      	 	
              (8)

            	
              Deed
                of Trust dated December 16, 1999, executed by Stratus Properties
                Operating
                Co., L.P. and delivered to Trustee for the benefit of Lender, recorded
                in
                Volume 8247, at Page 0791 of the Deed Records of Bexar County, Texas,
                covering real property located in Bexar County, Texas, as more
                particularly described therein.

            


    

     

    WHEREAS,
      the Notes are further secured by that certain additional Deed of Trust dated
      as
      of February 27, 2002 and recorded under Document No. 2002038536 of the Official
      Public Records of Travis County, Texas, covering that certain property commonly
      known as the Escala Lots in the Barton Creek Subdivision and being more fully
      described therein, and said Deed of Trust is included in the definition "Deeds
      of Trust" set forth in this Agreement for all purposes; and

     

    WHEREAS,
      the Mortgaged Property encumbered by that certain Deed of Trust dated December
      16, 1999, executed by Stratus Properties Operating Co., L.P. and delivered
      to
      Trustee for the benefit of Lender, recorded under Clerk’s File Number 99
      R0127438 of the Official Public Records of Denton County, Texas has been
      released and no longer secures the Loans; and

     

    WHEREAS,
      Lender and Borrower entered into that certain Modification Agreement made to
      be
      effective as of the 27th day of December, 2000 (the “First
      Deed of Trust Modification”),
      and
      on the same date, (i) amended the Loan Agreement pursuant to the First Loan
      Modification, (ii) amended the $5,000,000.00 Revolving Note pursuant to the
      First $5,000,000.00 Revolving Note Amendment, and (iii) amended the Revolving
      Credit Note pursuant to the First Revolving Credit Note Amendment;
      and

     

    WHEREAS,
      the First Deed of Trust Modification was recorded in each of the counties where
      the Mortgaged Property is located, such recording information being more fully
      described as follows:

     

    
      	 	
              (1)

            	
              Recorded
                under Document No. 2000204551 of the Official Public Records of Travis
                County, Texas;

            


    

     

    
      	 	
              (2)

            	
              Recorded
                under Document No. 00030106 of the Official Public Records of Hays
                County,
                Texas;

            


    

     

    
      	 	
              (3)

            	
              Recorded
                in Volume 8689, Page 1807 of the Deed Records of Bexar County, Texas,
                and

            


    

     

    
      	 	
              (4)

            	
              Recorded
                under Clerk’s File No. U801037 of the Official Public Records of Real
                Property of Harris County, Texas.

            


    

     

    WHEREAS,
      Lender and Borrower entered into that certain Second Modification Agreement
      made
      to be effective as of the 18th day of December, 2001 (the “Second
      Deed of Trust Modification”),
      and
      on the same date, (i) amended the Loan Agreement pursuant to the Second Loan
      Modification, (ii) amended the $5,000,000.00 Revolving Note pursuant to the
      Second $5,000,000.00 Revolving Note Amendment, and (iii) amended the Revolving
      Credit Note pursuant to the Second Revolving Credit Note Amendment;
      and

     

    WHEREAS,
      the Second Deed of Trust Modification was recorded in each of the counties
      where
      the Mortgaged Property is located, such recording information being more fully
      described as follows:

     

    
      	 	
              (1)

            	
              Recorded
                under Document No. 2001215158 of the Official Public Records of Travis
                County, Texas;

            


    

     

    
      	 	
              (2)

            	
              Recorded
                under Document No. 01031701 of the Official Public Records of Hays
                County,
                Texas;

            


    

     

    
      	 	
              (3)

            	
              Recorded
                in Volume 9183, Page 1818 of the Deed Records of Bexar County, Texas,
                and

            


    

     

    
      	 	
              (4)

            	
              Recorded
                under Clerk’s File No. V490950 of the Official Public Records of Real
                Property of Harris County, Texas.

            


    

     

    WHEREAS,
      Lender and Borrower entered into that certain Third Modification Agreement
      made
      to be effective as of the 23rd day of June, 2004 (the “Third
      Deed of Trust Modification”),
      and
      on the same date, (i) amended the Loan Agreement pursuant to the Third Loan
      Modification, (ii) amended the $5,000,000.00 Revolving Note pursuant to the
      Third $5,000,000.00 Revolving Note Amendment, and (iii) amended the Revolving
      Credit Note pursuant to the Third Revolving Credit Note Amendment;
      and

     

    WHEREAS,
      the Third Deed of Trust Modification was recorded in each of the counties where
      the Mortgaged Property is located, such recording information being more fully
      described as follows:

     

    
      	 	
              (1)

            	
              Recorded
                under Document No. 2004127628 of the Official Public Records of Travis
                County, Texas;

            


    

     

    
      	 	
              (2)

            	
              Recorded
                under Document No. 04019600 of the Official Public Records of Hays
                County,
                Texas;

            


    

     

    WHEREAS,
      all of the real property covered by the foregoing Deeds of Trust which has
      not
      otherwise been released by the recordation of partial releases of lien executed
      by Lender, together with all improvements, appurtenances, other properties
      (whether real or personal), rights and interests described in and encumbered
      by
      such Deeds of Trust, are hereinafter collectively referred to as the
“Mortgaged
      Property”.
      The
      $5,000,000.00 Revolving Note, the Revolving Credit Note, the Loan Agreement,
      the
      Deeds of Trust, and all other related documents executed by Borrower pertaining
      to, evidencing or securing the Loans are hereinafter collectively referred
      to as
      the “Loan
      Documents”;
      and

     

    WHEREAS,
      the $5,000,000 Revolving Loan Maturity Date (as defined in the Third Loan
      Modification) is now May 30, 2006, and the Revolving Credit Loan Maturity Date
      (as defined in the Third Loan Modification) is now May 30, 2006, and Lender,
      Borrower and Guarantor have agreed to an extension of the $5,000,000 Revolving
      Loan Maturity Date and the Revolving Credit Loan Maturity Date to May 30, 2007,
      upon the terms and provisions set forth herein.

     

    NOW,
      THEREFORE, for and in consideration of the premises and the mutual covenants
      and
      agreements contained herein, and for other good and valuable consideration,
      the
      receipt and sufficiency of which are hereby acknowledged, Lender and Borrower
      hereby agree as follows:

     

    1. Recitals.
      The
      recitals set forth above are true, accurate and correct, and are incorporated
      herein by this reference.

     

    2. Capitalized
      Terms.
      Any
      capitalized terms not defined herein shall have the meaning ascribed to them
      in
      the Deeds of Trust or Loan Agreement, as the case may be, as previously modified
      and as further modified herein.

     

    3. Extension
      of the $5,000,000 Revolving Loan Maturity Date.
      Lender
      and Borrower hereby agree, and the Loan Agreement is hereby amended to provide,
      that the $5,000,000 Revolving Loan Maturity Date is May 30, 2007 for all
      purposes. The $5,000,000 Revolving Note is hereby amended to provide that the
      "Maturity Date" thereunder is May 30, 2007, at which time the unpaid principal
      balance of the $5,000,000 Revolving Note, together with all accrued but uhpaid
      interest thereon, shall be due and payable. The Borrower hereby renews, but
      does
      not extinguish, the $5,000,000 Revolving Note and the liens, security interests
      and assignments created and evidenced by the Loan Documents, and in this regard,
      all of the Loan Documents are hereby renewed and modified by extending the
      $5,000,000 Revolving Loan Maturity Date as set forth herein. Borrower covenants
      to observe, comply with and perform each of the terms and provisions of the
      Loan
      Documents, as modified hereby.

     

    4. Extension
      of the Revolving Credit Loan Maturity Date.
      Lender
      and Borrower hereby agree, and the Loan Agreement is hereby amended to provide,
      that the Revolving Credit Loan Maturity Date is May 30, 2007 for all purposes.
      The Revolving Credit Note is hereby amended to provide that the "Maturity Date"
      thereunder is May 30, 2007, at which time the unpaid principal balance of the
      Revolving Credit Note, together with all accrued but uhpaid interest thereon,
      shall be due and payable. The Borrower hereby renews, but does not extinguish,
      the Revolving Credit Note and the liens, security interests and assignments
      created and evidenced by the Loan Documents, and in this regard, all of the
      Loan
      Documents are hereby renewed and modified by extending the Revolving Credit
      Loan
      Maturity Date as set forth herein. Borrower covenants to observe, comply with
      and perform each of the terms and provisions of the Loan Documents, as modified
      hereby.

     

    5. Third
      Modification of Deeds of Trust.
      Borrower and Lender hereby agree to modify each and all of the Deeds of Trust
      as
      follows:

     

    a. Definition
      of Note.
      The
      definition of “Note” as contained in each of the Deeds of Trust is hereby
      amended and replaced with the following definition:

     

    "'Note':
      Collectively, (1) that certain Promissory Note originally dated
      December 16, 1999, incorporated herein by this reference, executed by
      the
      Borrower (as defined in the Loan Agreement) and payable to the order of
      Beneficiary in the original principal amount of $20,000,000.00, as amended
      by
      (i) that certain Amendment to Promissory Note dated December 27, 2000, executed
      by Borrower and Beneficiary, whereby such note was reduced to $10,000,000.00
      and
      the addition of a limited revolving feature was added, (ii) that certain Second
      Amendment to Promissory Note dated as of December 18, 2001, executed by Borrower
      and Beneficiary, whereby such note was further reduced to $5,000,000.00, (iii)
      that certain Third Modification and Extension Agreement dated as of June 30,
      2003 executed by and between Borrower and Beneficiary (the "Third
      Extension"),
      (iv)
      that certain Third Amendment to Promissory Note dated as of June 23, 2004
      executed by Borrower and Beneficiary, and (v) that certain Fourth Modification
      and Extension Agreement dated as of May 30, 2005 executed by and between
      Borrower and Beneficiary (the "Fourth
      Extension"),
      and
      any and all renewals, modifications, rearrangements, reinstatements,
      enlargements, or extensions of such promissory note or of any promissory note
      or
      notes given in renewal, substitution or replacement therefor; and (2) that
      certain Revolving Credit Note originally dated December 16, 1999, incorporated
      herein by this reference, executed by Borrower and payable to the order of
      Beneficiary in the original principal amount of $10,000,000.00, as amended
      by
      (i) that certain Amendment to Revolving Credit Note dated December 27, 2000,
      executed by Borrower and Beneficiary whereby the stated principal amount of
      such
      Revolving Credit Note was increased to $20,000,000.00, (ii) that certain Second
      Amendment to Revolving Credit Note dated December 18, 2001, executed by Borrower
      and Beneficiary, whereby such note was increased to $25,000,000.00, (iii) the
      Third Extension, (iv) that certain Third Amendment to Revolving Credit Note
      dated as of June 23, 2004, executed by Borrower and Beneficiary and (v) the
      Fourth Extension.”

     

    b. Loan
      Agreement.
      The
      definition of “Loan Agreement” as contained in each of the Deeds of Trust is
      hereby further amended and replaced with the following definitions:

     

    “'Loan
      Agreement':
      That
      certain Loan Agreement dated December 16, 1999, by and between the Borrower
      and
      Beneficiary, as Lender, as previously amended by (i) that certain Amendment
      to
      Loan Agreement dated December 27, 2000, executed by and between the Borrower
      and
      Lender, (ii) that certain Second Amendment to Loan Agreement dated December
      18,
      2001 executed by and between the Borrower and Beneficiary, (iii) Third
      Modification and Extension Agreement dated as of June 30, 2003 executed by
      and
      between Borrower and Beneficiary, (iv) that certain Third Amendment to Loan
      Agreement dated June 23, 2004 executed by and between the Borrower and
      Beneficiary and (v) the Fourth Modification and Extension Agreement dated as
      of
      May 30, 2005 executed by and between Borrower and Beneficiary.”

     

    6. Acknowledgment
      by Borrower.
      Except
      as otherwise specified herein, the terms and provisions hereof shall in no
      manner impair, limit, restrict or otherwise affect the obligations of Borrower
      or any third party to Lender, as evidenced by the Loan Documents. Borrower
      hereby acknowledges, agrees and represents that (i) Borrower is indebted to
      Lender pursuant to the terms of the Loan Documents as modified by the Loan
      Modification Documents; (ii) the liens, security interests and assignments
      created and evidenced by the Deeds of Trust and the other Loan Documents are,
      respectively, valid and subsisting liens, security interests and assignments
      of
      the respective dignity and priority recited therein; (iii) there are no claims
      or offsets against, or defenses or counterclaims to, the terms or provisions
      of
      the Loan Documents, and the other obligations created or evidenced by the Loan
      Documents; (iv) Borrower has no claims, offsets, defenses or counterclaims
      arising from any of Lender’s acts or omissions with respect to the Mortgaged
      Property, the Loan Documents or Lender’s performance under the Loan Documents or
      with respect to the Mortgaged Property; (v) the representations and warranties
      of Borrower contained in the Loan Documents are and remain true and correct
      as
      of the date hereof; and (vi) Lender is not in default and no event has occurred
      which, with the passage of time, giving of notice, or both, would constitute
      a
      default by Lender of Lender’s obligations under the terms and provisions of the
      Loan Documents.

     

    7. No
      Waiver of Remedies.
      Except
      as may be expressly set forth herein, nothing contained in this Agreement shall
      prejudice, act as, or be deemed to be a waiver of any right or remedy available
      to Lender by reason of the occurrence or existence of any fact, circumstance
      or
      event constituting a default under the Notes or the other Loan
      Documents.

     

    8. 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, execution
      and recordation hereof and the consummation of the transaction contemplated
      hereby, including, but not limited to, recording fees, title insurance policy
      or
      endorsement premiums, and reasonable fees and expenses of legal counsel to
      Lender.

     

    9. Additional
      Documentation.
      From
      time to time, Borrower shall execute or procure and deliver to Lender such
      other
      and further documents and instruments evidencing, securing or pertaining to
      the
      Loans or the Loan Documents as shall be reasonably requested by Lender so as
      to
      evidence or effect the terms and provisions hereof. Upon Lender’s request,
      Borrower shall cause to be delivered to Lender an opinion of counsel,
      satisfactory to Lender as to form, substance and rendering attorney, opining
      to
      (i) the validity and enforceability of this Agreement and the terms and
      provisions hereof, and any other agreement executed in connection with the
      transaction contemplated hereby; (ii) the authority of Borrower, and any
      constituents of Borrower, to execute, deliver and perform its or their
      respective obligations under the Loan Documents, as hereby modified; and (iii)
      such other matters as reasonably requested by Lender.

     

    10. Effectiveness
      of the Loan Documents.
      Except
      as expressly modified by the terms and provisions of this Agreement and the
      other Loan Modification Documents, each of the terms and provisions of the
      Deeds
      of Trust and the other Loan Documents are hereby ratified and shall remain
      in
      full force and effect; provided, however, that any reference in any of the
      Loan
      Documents to the Loans, the amounts constituting the Loans, any defined terms,
      or to any of the other Loan Documents shall be deemed, from and after the date
      hereof, to refer to the Loans, the amounts constituting the Loans, defined
      terms
      and to such other Loan Documents, as modified by this Agreement and the other
      Loan Modification Documents.

     

    11. Governing
      Law.
      THE TERMS AND PROVISIONS HEREOF SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
      WITH THE LAWS OF THE STATE OF TEXAS, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
      HEREIN.

     

    12. Time.
      Time is
      of the essence in the performance of the covenants contained herein and in
      the
      Loan Documents.

     

    13. Binding
      Agreement.
      This
      Agreement shall be binding upon the heirs, executors, administrators, personal
      representatives, successors and assigns of the parties hereto; provided,
      however, the foregoing shall not be deemed or construed to (i) permit, sanction,
      authorize or condone the assignment of all or any part of the Mortgaged Property
      or any of Borrower’s rights, titles or interests in and to the Mortgaged
      Property or any rights, titles or interests in and to Borrower, except as
      expressly authorized in the Loan Documents, or (ii) confer any right, title,
      benefit, cause of action or remedy upon any person or entity not a party hereto,
      which such party would not or did not otherwise possess.

     

    14. Continuing
      Effect; Ratification.
      Except
      as expressly amended and modified by the First Deed of Trust Modification,
      the
      Second Deed of Trust Modification, the Third Extension, the Third Deed of Trust
      Modification and this Agreement, the Deeds of Trust shall remain unchanged
      and
      in full force and effect. The Deeds of Trust, as further modified by this
      Agreement, and all documents, assignments, transfers, liens and security rights
      pertaining to them, are hereby ratified, reaffirmed and confirmed in all
      respects as valid, subsisting and continuing in full force and effect. The
      Deeds
      of Trust and this Agreement shall together comprise the Deeds of Trust securing
      the Loans.

     

    15. No
      Novation.
      It is
      the intent of the parties that this Agreement shall not constitute a novation
      and shall in no way limit, diminish, impair or adversely affect the lien
      priority of the Deeds of Trust. All of the liens and security interests securing
      the Loans, including, without limitation, the liens and security interests
      created by the Deeds of Trust, are hereby ratified, reinstated, renewed,
      confirmed and extended to secure the Loans and the Notes, as modified by the
      Loan Modification Documents.

     

    16. Headings.
      The
      section headings hereof are inserted for convenience of reference only and
      shall
      in no way alter, amend, define or be used in the construction or interpretation
      of the text of such section.

     

    17. Severability.
      If any
      clause or provision of this Agreement is or should ever be held to be illegal,
      invalid or unenforceable under any present or future law applicable to the
      terms
      hereof, then and in that event, it is the intention of the parties hereto that
      the remainder of this Agreement shall not be affected thereby, and that in
      lieu
      of each such clause or provision of this Agreement that is illegal, invalid
      or
      unenforceable, such clause or provision shall be judicially construed and
      interpreted to be as similar in substance and content to such illegal, invalid
      or unenforceable clause or provision, as the context thereof would reasonably
      suggest, so as to thereafter be legal, valid and enforceable.

     

    18. Counterparts.
      To
      facilitate execution, this Agreement may be executed in as many counterparts
      as
      may be convenient or required. It shall not be necessary that the signature
      and
      acknowledgment of, or on behalf of, each party, or that the signature and
      acknowledgment of all persons required to bind any party, appear on each
      counterpart. All counterparts shall collectively constitute a single instrument.
      It shall not be necessary in making proof of this Agreement to produce or
      account for more than a single counterpart containing the respective signatures
      and acknowledgment of, or on behalf of, each of the parties hereto. Any
      signature and acknowledgment page to any counterpart may be detached from such
      counterpart without impairing the legal effect of the signatures and
      acknowledgments thereon and thereafter attached to another counterpart identical
      thereto except having attached to it additional signature and acknowledgment
      pages.

     

    19. THIS
      AGREEMENT AND THE OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG
      THE PARTIES HERETO AND THERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
      AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
      RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED
      OR
      VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS
      OR
      DISCUSSIONS OF THE PARTIES HERETO OR THERETO. THERE ARE NO ORAL AGREEMENTS
      AMONG
      THE PARTIES HERETO OR THERETO. THE PROVISIONS OF THIS AGREEMENT AND THE OTHER
      LOAN DOCUMENTS MAY BE AMENDED OR WAIVED ONLY BY AN INSTRUMENT IN WRITING SIGNED
      BY THE RESPECTIVE PARTIES TO SUCH DOCUMENTS.

     

    [SIGNATURE
      PAGES FOLLOW]

     



    IN
      WITNESS WHEREOF, Borrower and Lender have executed this Agreement to be
      effective as of the Effective Date.

     

    LENDER:

    


    COMERICA
      BANK,
      a
      Michigan banking corporation, successor by merger to Comerica
      Bank-Texas

    


    


    By: /s/
      Shery R.
      Layne                                              

    Name: Shery
      R.
      Layne                           
                 

    Title: Senior
      Vice
      President              
         

    


    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,
                its Sole Member

            


    

    


    


    By: /s/
      John E.
      Baker                                       

    John
      E.
      Baker, Senior Vice President

    


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

    f/k/a
      Circle C Land Corp.

    


    
      	 	
              By:

            	
              Circle
                C GP, 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

    


    AUSTIN
      290 PROPERTIES, INC.,
      a Texas
      corporation

    


    


    By:
      /s/ John E.
      Baker                                  
              

    John
      E.
      Baker, Senior Vice President

    


    BARTON
      CREEK JV:

    


    OLY
      STRATUS BARTON CREEK I JOINT 

    VENTURE,
      a
      Texas
      joint venture

    


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

          
      Venturer

     

    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
      DALLAS        §

    


    This
      instrument was ACKNOWLEDGED before me, on the 24th day of May, 2005,
      by
      SHERY R. LAYNE, Senior Vice President of COMERICA
      BANK,
      a
      Michigan banking corporation, successor by merger to Comerica Bank-Texas, on
      behalf of said banking corporation.

     

    
      [SEAL]

                                  /s/
        Jerre
        Ryburn              
        

      Notary
        Public, State of Texas

      


       
          Jerre
        Ryburn                    
        

      Printed
        Name of Notary Public

    

     

    My
      Commission Expires:

    2/2/2008.

     

    


    


    


    STATE
      OF
      TEXAS  §

                                                    
      §

    COUNTY
      OF
      TRAVIS         
§

    


    This
      instrument was ACKNOWLEDGED before me on the 24th of May, 2005, by John
      E.
      Baker, Senior Vice President of STRATUS
      PROPERTIES INC.,
      a
      Delaware corporation, on behalf of said corporation.

     

    [SEAL]

                                 
      /s/ Jerre
      Ryburn              
      

    Notary
      Public, State of Texas

    
Jerre
      Ryburn                    
      

    Printed
      Name of Notary Public

    My
      Commission Expires:

    2-2-2008.

     


    
 

    STATE
      OF
      TEXAS  §

                                                     §

    COUNTY
      OF
      TRAVIS         
§

    


    This
      instrument was ACKNOWLEDGED before me, on the 24th day of May, 2005,
      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 limited
      partnership.

     

    [SEAL]

                                       
           /s/ Jerre
      Ryburn                  
       

    Notary
      Public, State of Texas

    


    Jerre
      Ryburn                    
      

    Printed
      Name of Notary Public

    My
      Commission Expires:

    2-2-2008.

     

     

    STATE
      OF
      TEXAS  §

                                                    
      §

    COUNTY
      OF
      TRAVIS         
§

    


     

    This
      instrument was ACKNOWLEDGED before me, on the 24th day of May, 2005,
      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 Texas
      limited partnership, f/k/a Circle C Land Corp., on behalf of said limited
      partnership.

     

    [SEAL]

                                 /s/
      Jerre
      Ryburn              
      

    Notary
      Public, State of Texas

    Jerre
      Ryburn                   
      

    Printed
      Name of Notary Public

    My
      Commission Expires:

    2-2-2008.

     


    
 

    STATE
      OF
      TEXAS  §

                                                    
      §

    COUNTY
      OF
      TRAVIS         
§

    


     

    This
      instrument was ACKNOWLEDGED before me, on the 24th day of May, 2005,
      by
      John E. Baker, Senior Vice President of AUSTIN
      290 PROPERTIES, INC.,
      a Texas corporation, on behalf of said corporation.

     

    [SEAL]

                                                                                               
          /s/ Jerre
      Ryburn              
      
      Notary
        Public, State of Texas

      
Jerre
        Ryburn                   
        

      Printed
        Name of Notary
        Public
           

    My
      Commission Expires:

    2-2-2008.

     

    


    


    STATE
      OF
      TEXAS  §

                                                    
      §

    COUNTY
      OF
      TRAVIS         
§

    


    This
      instrument was ACKNOWLEDGED before me, on the 24th day of May, 2005,
      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
      STRATUS,
      a Texas
      joint venture, on behalf of said joint venture.

     

    [SEAL]

                                                                                               
         /s/ Jerre
      Ryburn              
      
      Notary
        Public, State of Texas

      


      
Jerre
        Ryburn                   
        

      Printed
        Name of Notary Public

    

    My
      Commission Expires:

    2-2-2008.

    
 

     

    STATE
      OF
      TEXAS  §

                                                    
      §

    COUNTY
      OF
      TRAVIS         
§

    


    This
      instrument was ACKNOWLEDGED before me, on the 24th day of May, 2005,
      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
      STRATUS,
      a Texas
      joint venture, on behalf of said joint venture.

     

    [SEAL]

                                                                                                    /s/
      Jerre
      Ryburn              
      
      Notary
        Public, State of Texas

      
Jerre
        Ryburn                   
        

      Printed
        Name of Notary
        Public
                   

     

    My
      Commission Expires:

    2-2-2008.