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SECOND LOAN MODIFICATION AGREEMENT

    THIS SECOND LOAN MODIFICATION AGREEMENT (this “Modification”) is signed on January 4, 2021, effective December 31, 2020 (the “Effective Date”), by and between SOUTHSIDE BANK, a Texas state bank ("Lender") and LANTANA PLACE, L.L.C., a Texas limited liability company ("Borrower").

    WHEREAS, Borrower and Lender entered into a Construction Loan Agreement dated effective April 28, 2017, as amended by First Amendment to Construction Loan Agreement dated December 13, 2017 (the “Loan Agreement”) respecting a construction loan in the maximum principal amount of $26,310,482.00 for Borrower’s Project known as “Lantana Place” located at 7415 SW Parkway in Austin, Travis County, Texas, as therein described; and

    WHEREAS, the Loan is evidenced by a Promissory Note dated April 28, 2017 (the “Note”) in the maximum principal amount of $26,310,482.00; and

    WHEREAS, Lender and Borrower entered into a Loan Modification Agreement dated effective June 19, 2020 (the “First Modification”); and

    WHEREAS, Borrower and Lender now desire to further amend the Loan Agreement and the Note as hereinafter set forth.

    NOW, THEREFORE, Borrower and Lender hereby represent, stipulate, covenant and agree as follows:

1.    Debt Service Coverage Ratio.  Effective as of the Effective Date, the references to the date December 31, 2019 in Sections 11(a) and 11(b) of the Loan Agreement and in Schedule 1(f) of the Loan Agreement are hereby changed to September 30, 2021, and the definition of DSC Period as set forth in Section 11(d) of the Loan Agreement is hereby amended and restated as follows:

    “DSC Period:  The first DSC Period shall be the three month period ending on September 30, 2021; the next DSC Period shall be the six month period ending on December 31, 2021; the next DSC Period shall be the nine month period ending on March 31, 2022; the next DSC Period shall be the twelve month period ending on June 30, 2022; and thereafter the DSC Period shall be each trailing twelve (12) consecutive calendar month period ending on each of March 31, June 30, September 30 and December 31, respectively, of each calendar year.”

2.    Remaining Funds Available for Advance.  Subject to the terms, conditions and limitations set forth in the Note, the Loan Agreement and the other Security Documents, the sum of $2,065,057.00 remains available for advance under the Note to pay for remaining budgeted Project costs including: 

•Up to $1,644,210.87 for tenant improvements to the Project; 

•Up to $288,256.55 for leasing commissions for the Project; and 
•Other budgeted Project costs.

    Lender shall have no obligation to make any other advances under the Note, and in no event shall Lender be obligated to make any advances after December 31, 2021.

3.    Amendment to Lease Agreement for Cinepolis.  Lender hereby consents to the First Amendment to Shopping Center Lease dated effective as of December 31, 2020 by and between Borrower, as landlord, and Texas Cinema Investments, LLC, as tenant. 

4.    Principal Payment.  As consideration for this Modification, and contemporaneous with the signing of this Modification, Borrower shall pay to Lender the sum of Two Million US Dollars ($2,000,000.00), which sum shall be applied to the Note as a prepayment of principal, leaving an outstanding unpaid principal balance of $22,183,460.00. 

5.    Payment of Fees and Expenses.  Upon demand by Lender, Borrower shall promptly pay, or reimburse Lender for, all reasonable legal fees and any other expenses incurred by Lender in connection with this Modification.

6.    Representations.  Borrower represents and warrants to Lender that each of the representations and warranties of Borrower set forth in the Loan Agreement are true and correct as of the date of this Modification, as if made on the date of this Modification, except for any representations that are specifically limited to a specified date or time period prior to the date of this Modification.  

7.    No Event of Default.   Borrower represents and warrants to Lender that no Event of Default exists under the terms of the Loan Agreement, as modified, and to the best of Borrower’s knowledge, there exist no facts or circumstances that, with the giving of notice and the expiration of any applicable cure period, would reasonably be expected to become an Event of Default.
 
8.    Ratification.  Borrower hereby (i) ratifies, adopts and reaffirms each of the terms and provisions of the Loan Agreement, the Note, and the other Security Documents, subject only to the modifications contained in the First Modification and in this Modification; (ii) agrees that no provisions of the documents evidencing or securing payment of the Loan have been waived except as expressly provided herein; (iii) waives and releases any defenses to enforcement of the documents evidencing or securing payment of the Loan; and (iv) agrees that the Note remains secured by the Deed of Trust and all collateral for the Loan.  In the event of any conflict between the terms of this Modification and terms of the Security Documents or the First Modification, this Modification shall govern and control. 

9.    Defined Terms.  Unless otherwise expressly provided herein, terms defined in the Loan Agreement shall have the same meaning when used in this Modification.

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10.    Counterparts and Signatures.  This Modification may be signed in multiple counterparts, all of which take together shall constitute a single document.   Facsimile signatures are permissible and shall be as binding as original ink signatures. 

11.    Final Agreement.  THIS WRITTEN AGREEMENT REPRESENTS 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 UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

IN WITNESS WHEREOF, the parties have caused this Second Loan Modification Agreement to be duly executed effective as of the Effective Date.

LENDER:
SOUTHSIDE BANK

By: /s/ Pam Cunningham        
Pam Cunningham, Executive VP

BORROWER:
LANTANA PLACE, L.L.C.,                    
a Texas limited liability company

By: /s/ Erin D. Pickens            
Erin D. Pickens, Senior Vice President

APPROVAL OF GUARANTOR

The undersigned Guarantor hereby consents to the foregoing Second Loan Modification Agreement and hereby ratifies and affirms its written guarantee of payment of the Note as modified and amended. 

GUARANTOR:
STRATUS PROPERTIES INC., a Delaware corporation

By: /s/ Erin D. Pickens ______________________
Erin D. Pickens, Senior Vice President
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SECOND AMENDMENT TO THE
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
OF STRATUS KINGWOOD PLACE, L.P.

This Second Amendment to the Amended and Restated Limited Partnership Agreement of Stratus Kingwood Place, L.P. (this “Second Amendment”) is made and entered into by STRATUS NORTHPARK, L.L.C., a Texas limited liability company (the “General Partner”), to be effective as of October 31, 2019 (the “Effective Date”).
R E C I T A L S:
A.    STRATUS KINGWOOD PLACE, L.P., a Texas limited partnership (the “Partnership”), is governed by that certain Amended and Restated Limited Partnership Agreement of Stratus Kingwood Place, L.P. dated effective as of August 3, 2018, as amended by that certain First Amendment to the Amended and Restated Limited Partnership Agreement of the Partnership dated effective as of October 31, 2018 (the “Partnership Agreement”).
B.    Capitalized terms used in this Second Amendment and not defined in this Second Amendment will have the meanings ascribed to such terms in the Partnership Agreement.
C.    Effective as of the Effective Date, Botierra, LLC, a Texas limited liability company (“Botierra”), sold and transferred all of its Interest in the Partnership (“Botierra’s Interest”) to Stratus Properties Operating Co., L.P., a Delaware limited partnership (“SPOC”), and Botierra is no longer a Partner in the Partnership.
D.    Pursuant to the authority granted to the General Partner in Section 4.3(c) of the Partnership Agreement, the General Partner desires to amend the Partnership Agreement as set forth in this First Amendment.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained in this First Amendment, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Partnership Agreement is hereby amended as follows:
1.    Amendment to Exhibit “A”.  Exhibit “A” of the Partnership Agreement is hereby replaced with Exhibit “A” attached hereto and incorporated herein, which reflects the Partners in the Partnership as of the Effective Date and the Capital Interests, Voting Interests, and Capital Contributions of the respective Partners as of the Effective Date, subject to adjustment as provided in the Partnership Agreement.
2.    Class B Limited Partner for Interest Transferred from Botierra to SPOC.  Effective as of the Effective Date, SPOC (i) succeeded to all of Botierra’s Interest and (ii) will be a Class B Limited Partner with respect to the Interest transferred from Botierra to SPOC.  The Partnership will account for and treat the Interest transferred from Botierra to SPOC separate and apart from the Interest owned by SPOC as the Class A Limited Partner.  For avoidance of doubt, the calculations, distribution priorities, and other rights and obligations of the Interest transferred from Botierra to SPOC (including, without limitation, the 9% Return, the 11% Return, Capital Interest, Voting Interest, Distribution Interest, Capital Contributions, and Capital Account) will be carried forward and based on the 9% Return, 11% Return, Capital Interest, Voting Interest, Distribution Interest, Capital Contributions, and Capital Account of Botierra before the Effective Date; provided, however, in accordance with Section 5.1 of the Partnership Agreement, the General Partner may treat SPOC as having a single Capital Account reflecting both 
    

SPOC’s Capital Account as a Class A Limited Partner and SPOC’s Capital Account as a Class B Limited Partner.
3.    Ratification of Partnership Agreement, As Amended.  Except as amended by this Second Amendment, the Partnership Agreement is hereby ratified, confirmed, and approved.

GENERAL PARTNER:
STRATUS NORTHPARK, L.L.C., a Texas limited liability company, General Partner

By:       /s/ Erin D. Pickens    
Erin D. Pickens, Senior Vice President

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EXHIBIT “A”

TO THE SECOND AMENDMENT TO THE
AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
OF STRATUS KINGWOOD PLACE, L.P.

Partners’ Capital Interests, Voting Interests,
and Capital Contributions Effective as of October 31, 2019

												
	

Partners
	Capital
   Interest(1)
	Voting
   Interest(1)
	 Capital
   Contributions

				
	General Partner:
			
				
	      Stratus Northpark, L.L.C.	0.1000%	0.1000%	$15,000

				
				
	Class A Limited Partner:
			
				
	      Stratus Properties Operating Co., L.P.	26.5667%	26.5667%	$3,985,000
				
				
	Class B Limited Partners:
			
				
	Blue Bird DE LP	5.0000%	5.0000%	$750,000
	Stratus Properties Operating Co., L.P. 			
	      (as successor to Botierra, LLC’s Interest)                                                                                   
	     33.3333%
	    33.3333%
	$5,000,000

	Druid Hills Capital, LLC	6.6667%	6.6667%	$1,000,000
	GRQ123 Enterprises, LLC	5.5533%	5.5533%	$833,000
	GRS123, LLC	3.7800%	3.7800%	$567,000
	JBM Trust	6.6667%	6.6667%	$1,000,000
	JDJIV Trust Partners	1.6667%	1.6667%	$250,000
	LCHM Holdings, LLC	6.6667%	6.6667%	$1,000,000
	LMJ Trust Partners	1.6667%	1.6667%	$250,000
	Ross L. Vaughan	1.1667%	1.1667%	$175,000
	Jeffery L. Smith	1.1667%	1.1667%	$175,000
				
	Class B Limited Partners Subtotal:	73.3333%	73.3333%	$11,000,000
				
	Total:	100.0000%	100.0000%	$15,000,000

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