Document:

Q414 Exhibit 10.3

After Recording Return to:
Thompson & Knight LLP
1722 Routh Street, Suite 1500
Dallas, Texas 75201
Attention: Matthew H. Swerdlow

SECOND MODIFICATION AND EXTENSION AGREEMENT

This SECOND MODIFICATION AND EXTENSION AGREEMENT (this “Agreement”) dated effective as of February ___, 2015 (the “Effective Date”) 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”), and COMERICA BANK (“Lender”);

W I T N E S S E T H:

A.Borrower has executed and delivered to Lender, inter alia, relating to a loan (the “Loan”) in the original principal sum of $48,000,000.00: 

i.that certain Revolving Promissory Note dated as of December 31, 2012, payable to the order of Lender in the original principal sum of $35,000,000.00, with interest and principal payable as therein provided (the “Revolving Note”); 

ii.that certain Promissory Note dated as of December 31, 2012, payable to the order of Lender in the original principal sum of $10,000,000.00, with interest and principal payable as therein provided (the “Construction Note”); 

iii.that certain Promissory Note dated as of December 31, 2012, payable to the order of Lender in the original principal sum of $3,000,000.00, with interest and principal payable as therein provided (the “Line of Credit Note”; and together the Revolving Note and the Construction Note, collectively referred to as the “Note” ); 

iv.that certain Loan Agreement dated of even date with the Note between Borrower and Lender (the “Loan Agreement”); 

v.that certain Deed of Trust, Security Agreement and Assignment of Rents dated of even date with the Note from Stratus to Brian P. Foley, Trustee, securing the payment of the Note, covering certain real and personal property described therein, recorded under Clerk’s File No. 2012220644 of the Real Property Records of Travis County, Texas (the “Stratus Deed of Trust”); 

vi.that certain Deed of Trust, Security Agreement and Assignment of Rents dated of even date with the Note from Circle C to Brian P. Foley, Trustee, securing the payment of the Note, covering certain real and personal property described therein, recorded under Clerk’s File No. 2012220642 of the Real Property Records of Travis County, Texas (the “Circle C Deed of Trust”); 

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vii.that certain Deed of Trust, Security Agreement and Assignment of Rents dated of even date with the Note from SPOC to Brian P. Foley, Trustee, securing the payment of the Note, covering certain real and personal property described therein, recorded under Clerk’s File No. 2012220643 of the Real Property Records of Travis County, Texas (the “SPOC Deed of Trust”);

viii.that certain Deed of Trust, Security Agreement and Assignment of Rents dated of even date with the Note from Austin to Brian P. Foley, Trustee, securing the payment of the Note, covering certain real and personal property described therein, recorded under Clerk’s File No. 2012220641 of the Real Property Records of Travis County, Texas, (the “Austin Deed of Trust”; and together with the Stratus Deed of Trust, Circle C Deed of Trust and the SPOC Deed of Trust, collectively referred to as the “Deed of Trust”); and
ix.that certain Modification and Extension Agreement dated November 12, 2014, between Borrower and Lender (the “Modification Agreement”).

The Note, the Loan Agreement, the Deed of Trust, the Modification Agreement and all other documents evidencing, securing or otherwise in connection with the Loan evidenced by the Note being herein collectively called the “Loan Documents”).
B.The Note is due and payable on February 28, 2015, and Borrower has requested that Lender extend the term of the Note to May 31, 2015, 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

C.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 Fee.  As consideration for the extension of the term of the Loan, contemporaneously with the execution and delivery of this Agreement and as a condition to its effectiveness, Borrower hereby agrees to pay to Lender, in immediately available funds, a loan extension fee in the amount of $60,000.00.

3.Extension of Maturity Date.  The maturity date of the Note is hereby extended to May 31, 2015 (the “Maturity Date”), 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.  Without limiting the foregoing, the term “Maturity Date” and other references to the maturity of the Loan or the Note used in the Note, the Loan Agreement and other Loan Documents are likewise amended to mean and refer to “May 31, 2015”.

4.Representations and Warranties.  Borrower hereby represents and warrants that (a) Borrower is the sole legal and beneficial owner of the Mortgaged Property (other than the Mortgaged Property which has been released by Lender from the liens of the Deed of Trust); (b) Borrower is duly organized and legally existing under the laws of the state of its organizations and is duly qualified to do business in 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 

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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.

10.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 

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future course of dealings between the parties or by any prior, existing, or future performance between the parties pursuant to this Agreement or otherwise.

11.    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.

12.    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 Effective Date, 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.

13.    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.

14.    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.

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

16.    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.

17.    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.

18.    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.

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

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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]

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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/Erin D. Pickens            
Erin D. Pickens, Sr. 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/Erin D. Pickens            
Erin D. Pickens, 
Sr. 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/Erin D. Pickens            
Erin D. Pickens, 
Sr. Vice President

AUSTIN 290 PROPERTIES, INC., 
a Texas corporation

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

[Signature Page - Second Modification and Extension Agreement]

STATE OF TEXAS        §
§
COUNTY OF TRAVIS    §

This instrument was acknowledged before me on the _9th___ day of _February_, 2015, by Erin D. Pickens, Sr. Vice President of Stratus Properties Inc., a Delaware corporation, on behalf of said corporation.

/s/ Brooke E. Browning                          
Notary Public, State of Texas
My Commission Expires:     7-18-18                            
Printed Name of Notary:    Brooke Browning                    

STATE OF TEXAS        §
§
COUNTY OF TRAVIS    §

This instrument was acknowledged before me on the __9th__ day of __February__, 2015, by Erin D. Pickens, Sr. 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/ Brooke E. Browning                          
Notary Public, State of Texas
My Commission Expires:     7-18-18                            
Printed Name of Notary:    Brooke Browning                    
                

STATE OF TEXAS        §
§
COUNTY OF TRAVIS    §

This instrument was acknowledged before me on the _9th___ day of __February__, 2015, by Erin D. Pickens, Sr. 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/ Brooke E. Browning                          
Notary Public, State of Texas
My Commission Expires:     7-18-18                            
Printed Name of Notary:    Brooke Browning                    
                

[Signature Page - Second Modification and Extension Agreement]

STATE OF TEXAS        §
§
COUNTY OF TRAVIS    §

This instrument was acknowledged before me on the __9th__ day of __February_, 2015, by Erin D. Pickens, Sr. Vice President of Austin 290 Properties Inc., a Delaware corporation, on behalf of said corporation.

/s/ Brooke E. Browning                          
Notary Public, State of Texas
My Commission Expires:     7-18-18                            
Printed Name of Notary:    Brooke Browning                    
            

[Signature Page - Second Modification and Extension Agreement]

LENDER:

COMERICA BANK

By:    /s/ Sterling J. Silver                
Sterling J. Silver, Senior Vice President

STATE OF TEXAS        §
§
COUNTY OF TRAVIS    §

This instrument was acknowledged before me on the _10th__ day of __February__, 2015, by Sterling J. Silver, Senior Vice President of Comerica Bank, on behalf of said bank.

    
/s/ Sarah Hanes                                                      
Notary Public, State of Texas
My Commission Expires:     7-24-15                       
Printed Name of Notary:    Sarah Hanes                
        
                

[Signature Page - Second Modification and Extension Agreement]Q414 Exhibit 10.28

STATE OF TEXAS            §
§
COUNTIES OF TRAVIS        §
AND HAYS                §

FIRST AMENDMENT TO DEVELOPMENT AGREEMENT

THIS FIRST AMENDMENT TO DEVELOPMENT AGREEMENT (this “Amendment”) is entered into as of the 21st day of June, 2004, by and among the CITY OF AUSTIN, a home rule city and municipal corporation located in Travis, Hays and Williamson Counties in the State of Texas (the “City”), ESCARPMENT VILLAGE, L.P., a Texas limited partnership (“Escarpment”) and CIRCLE C LAND, L.P., a Texas limited partnership, formerly known as Circle C Land Corp., a Texas corporation (“CCLC”).  The City, Escarpment and CCLC are collectively referred to as the “Parties”. 

RECITALS

A.  The City and CCLC entered into that certain Development Agreement dated effective August 15, 2002 between Circle C Land Corp. and the City of Austin and recorded under Document No. 2002151984 of the Real Property Records of Travis County, Texas and Document No. 02022402 of the Real Property Records of Hays County, Texas (the “Development Agreement”).

B.  The Development Agreement, among other things, established limits on the development density on the Land for Office, Retail, Residential and Multi-Family Residential development as more particularly described and defined therein.

C.  Escarpment is the sole owner of Parcel 103 and currently intends to eliminate all Multi-Family development on Parcel 103 and to develop a Large Grocery Store and related Retail development on Parcel 103.  The Parties desire to amend the Development Agreement to re-allocate the amount of Retail and Multi-Family development permitted under the Development Agreement for Parcel 103 and to make certain other modifications as more particularly described below. 

E.  Pursuant to Section 17.10 thereof, the Development Agreement may be amended by mutual agreement of the City and the Landowner to whose Parcel such amendment relates.  As of the date of this Amendment, Escarpment is the sole owner of Parcel 103 and CCLC is the sole owner of Parcel 107, being the only two Parcels affected by this Amendment.

F.  The Parties have agreed to amend the Development Agreement as just described, and in other respects, to reflect their agreement, as more particularly described below.

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AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1.  Recitals Incorporated.  The above recitals are incorporated herein for all purposes.

2.  Capitalized Terms.  Any capitalized term that is used herein and is not otherwise defined herein shall have the meaning that is ascribed to it elsewhere in the Development Agreement. 

3. Development Density.  The first full paragraph of Section 6.1A of the Development Agreement is hereby deleted in its entirety and the following is substituted therefor: 

“6.1.A.  Development Density.  The maximum aggregate amount of development density permitted on the Land with respect to certain project types is as follows (“Total Permitted Density”):

Office                 750,000 square feet of Net Floor Area
Retail                 410,000 square feet of Net Floor Area
Residential             1,334 living units
Multi-Family Residential     504 living units”

4.  Reallocated Development Density.  As of the date hereof, there has been no Assignment of Development Allocation or Apportionment of Development Allocation of development density affecting Parcel 103.  Accordingly, the initial Development Allocation for Parcel 103 is hereby amended to be the Development Allocation shown on Exhibit “H” attached hereto and incorporated herein.  The Development Agreement is hereby amended by substituting the Exhibit “H” attached thereto (and referenced in Section 6.1B thereof) with the Exhibit “H” attached hereto.  As a consequence of the revisions to Exhibit “H”, 54 Residential living units and 4 Multi-Family Residential living units remain allocated to Parcel 103 but it is anticipated that they will be re-allocated to another Parcel in accordance with the terms and provisions of the Development Agreement prior to development.  The foregoing notwithstanding, nothing herein is intended to affect any Assignment of Development Allocations or Apportionment of Development Allocations previously filed with the City for other Parcels under the Development Agreement.

5.  CEF Setback.  A portion of the 100 foot eastern setback from the Pipeline Sink critical environmental feature on Parcel 107 described in Exhibit “M” is hereby increased to create a minimum of a 150 foot eastern setback from the center of Pipeline Sink as more particularly depicted on Figure “M-1” attached hereto.  In that regard, the Figure 

2

“M-1” attached hereto is hereby substituted for the Figure “M-1” attached to Exhibit “M” to the Development Agreement for all purposes.
6.  Park Berm.  CCLC agrees that it will design and construct, at its sole cost and expense, a low earthen berm on Parcel 104 to divert low storm water flows (a two year storm event) from an existing drainage culvert around Grassy Cove Cave located on Parcel 104 (the “Berm”).  Parcel 104 was previously dedicated to the City by CCLC as parkland.  CCLC will submit a design for the Berm to the Watershed Protection Department of the City on or before October 1, 2004.  The City will then process and secure all governmental approvals and permits required for the construction of the Berm including approval for CCLC to perform the work on City park property (“Berm Permits and Approvals”).  Within 120 days after the City delivers all Berm Permits and Approvals to CCLC, CCLC will construct the Berm.  

7.  Effect of Amendment.  Except as specifically amended by the provisions hereof, the terms and provisions stated in the Development Agreement shall continue to govern the rights and obligations of the Parties, and all provisions and covenants of the Development Agreement, as amended hereby, shall remain in full force and effect.  The terms and provisions of the Development Agreement, as hereby amended, are hereby ratified and confirmed, and this Amendment and the Development Agreement shall be construed as one instrument.  In that regard, this Amendment and the Development Agreement, including all exhibits to such documents, constitute the entire agreement between the parties relative to the subject matter hereof and supersede all prior and contemporaneous agreements and understandings of the parties in connection therewith.  In the event of any inconsistency, the terms and provisions of this Amendment shall control over and modify the terms and provisions of the Development Agreement.

8.  Miscellaneous.

a.    Captions.   The captions preceding the text of each section and paragraph hereof, if any, are included only for convenience of reference and shall be disregarded in the construction and interpretation of this Amendment.

b.    Authority.  Each party hereto has the full legal authority to execute and deliver this Amendment.  In addition, the individual who executes this Amendment on behalf of each party hereto is authorized to act for and on behalf of such party and to bind such party to the terms and provisions hereof.

c.    Severability.  If any provision of this Amendment shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable, unless enforcement of this Amendment as so invalidated would be unreasonable or grossly inequitable under the circumstances or would frustrate the purpose of this Amendment.

d.    Binding Effect.  This Amendment shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted (pursuant to the terms of the Development Agreement) assigns.  This Amendment 

3

shall inure to the benefit of and be binding upon each of the Parties, and their respective successors, assigns, transferees, and grantees.

e.    Multiple Counterparts.  Multiple copies of this Amendment may be executed by the Parties hereto.  Each such executed copy shall have the full force and effect of an original executed instrument.  To facilitate execution of this Amendment, the Parties may execute and exchange by telephone facsimile counterparts of the signature pages.

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed as of the date and year first above written.

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/ William H. Armstrong, III
        William H. Armstrong, III, 
                      President

Date:     June 22, 2004

4

		
	STATE OF TEXAS
	§

§
		
	COUNTY OF TRAVIS
	§

This instrument was acknowledged before me on the 22nd day of June, 2004, by William H. Armstrong, III, 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, on behalf of said entities.

/s/ Jody L. Bickel        
Notary Public, State of Texas
ESCARPMENT VILLAGE, L.P.,
a Texas limited partnership
		
	By:
	Escarpment Village Management, L.L.C., a Texas

limited liability company, its sole General Partner
		
	By:
	Circle C Land, L.P., a Texas limited

partnership, Manager
		
	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/ William H. Armstrong
Name:    William H. Armstrong
Its:    President        

5

THE STATE OF TEXAS    §
§
COUNTY  OF  TRAVIS    §
This instrument was acknowledged before me on the 22nd day of June, 2004, by William H. Armstrong III, 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, manager of Escarpment Village Management, L.L.C., a Texas limited liability company, general partner of Escarpment Village, L.P., a Texas limited partnership, on behalf of such entities.

/s/ Jody L. Bickel                
Notary Public, State of Texas

THE CITY OF AUSTIN,
a Texas municipal corporation

By: /s/ Laura J. Huffman    
Name: Laura J. Huffman    
Title: Assistant City Manager
Date : July 12, 2004        

		
	STATE OF TEXAS
	§

§
		
	COUNTY OF TRAVIS
	§

This instrument was acknowledged before me on the 12th day of July, 2004, by Laura J. Huffman, Assistant City Manager of The City of Austin, a Texas municipal corporation, on behalf of said municipal corporation

/s/ Annette M. Bogusch    
Notary Public, State of Texas

APPROVED AS TO FORM:

/s/ Alison Gallaway        
Assistant City Attorney

6

CONSENT AND SUBORDINATION OF MORTGAGEE
Comerica Bank, a Michigan banking corporation, successor by merger to Comerica Bank-Texas, is the legal owner and holder of certain indebtedness of Stratus Properties Inc., Stratus Properties Operating Co., L.P., Circle C Land Corp., and Austin 290 Properties, Inc., which is secured by, among other things, a deed of trust lien granted in a deed of trust dated December 16, 1999, from Circle C Land Corp., a Texas corporation, to Gary W. Orr, Trustee for Comerica Bank, recorded under Document No. 1999158708, Official Public Records of Travis County, Texas, and by a second lien deed of trust lien granted in a deed of trust dated December 16, 1999, from Circle C Land Corp., a Texas corporation, to Gary W. Orr, Trustee for Comerica Bank, recorded under Document No. 1999158709, Official Public Records of Travis County, Texas, and as both were modified by Modification Agreement dated December 27, 2000, recorded under Document No. 2000204551, Official Public Records of Travis County, Texas, and Document No. 00030106 (Volume 1754, Page 392), Official Public Records of Hays County, Texas, Second Modification Agreement dated December 18, 2001, recorded under Document No. 2001215158, Official Public Records of Travis County, Texas, and Document No. 01031701 (Volume 1924, Page 563), Official Public Records of Hays County, Texas, and Third Modification and Extension Agreement dated June 30, 2003, recorded under Document No. 2003237684, Official Public Records of Travis County, Texas, and further secured by a deed of trust lien granted in a second deed of trust dated September 22, 2003, from Stratus Properties Inc., Stratus Properties Operating Co., L.P., Circle C Land Corp., Austin 290 Properties, Inc., Stratus 7000 West Joint Venture and Lantana Office Properties I, L.P., to Melinda Chausse, Trustee for Comerica Bank, recorded under Document No. 2003237682, Official Public Records of Travis County, Texas, and a deed of trust lien granted in a subordinate deed of trust dated February 27, 2004, from Stratus Properties Inc., Stratus Properties Operating Co., L.P., Circle C Land, L.P., Austin 290 Properties, Inc., Stratus 7000 West Joint Venture and Lantana Office Properties I, L.P., to Melinda Chausse, Trustee for Comerica Bank, recorded under Document No. 2004047013, Official Public Records of Travis County, Texas (collectively and as modified, the “Deed of Trust”).
Comerica Bank hereby joins in this Amendment for the sole purpose of consenting to the Amendment and subordinating the Deed of Trust and all other liens it may have securing such indebtedness, to the Amendment and the interests of the City of Austin, and its successors and assigns, in and to the Amendment.  The undersigned has the authority to execute this Consent and Subordination on behalf of Comerica Bank and represents, in that regard, that all corporate action has been taken by Comerica Bank to make this a binding Consent and Subordination.
COMERICA BANK,
a Michigan banking corporation, successor by
merger to Comerica Bank-Texas
By:/s/ Shery R. Layne    
       Shery R. Layne, Senior Vice President

7

THE STATE OF TEXAS    §
§
COUNTY  OF  DALLAS    §
This instrument was acknowledged before me on the 29th day of June, 2004, 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.
/s/ Kristine K. Finn    
Notary Public Signature
(seal)

8

STATE OF TEXAS            §
§
COUNTIES OF TRAVIS        §
AND HAYS                §

SECOND AMENDMENT TO DEVELOPMENT AGREEMENT

THIS SECOND AMENDMENT TO DEVELOPMENT AGREEMENT (this “First Amendment”) is entered into as of the 9th day of November, 2004, by and among the CITY OF AUSTIN, a home rule city and municipal corporation located in Travis, Hays and Williamson Counties in the State of Texas (the “City”), ESCARPMENT VILLAGE, L.P., a Texas limited partnership (“Escarpment”) and CIRCLE C LAND, L.P., a Texas limited partnership, formerly known as Circle C Land Corp., a Texas corporation (“CCLC”).  The City, Escarpment and CCLC are collectively referred to as the “Parties”. 

RECITALS

A.    The City and CCLC entered into that certain Development Agreement dated effective August 15, 2002 and recorded under Document No. 2002151984 of the Real Property Records of Travis County, Texas and Document No. 02022402 of the Real Property Records of Hays County, Texas, which was amended by First Amendment to Development Agreement dated June 21, 2004 and recorded under Document No. 2004135909 of the Real Property Records of Travis County, Texas (the “Development Agreement”).

B.    Escarpment, as of the date hereof, is the owner of the Option Tracts described on Exhibit “A” attached hereto and incorporated herein by reference (the “Parcel 103 Option Tracts”).
C.    CCLC, as of the date hereof, is the owner of the Option Tracts described on Exhibit “B” attached hereto and incorporated herein by reference (the “Parcel 113 Option Tracts”).

D.    Escarpment and CCLC desire to exercise the option set forth in Section 2.3 of the Development Agreement to incorporate the Parcel 103 Option Tracts and the Parcel 113 Option Tracts into the Land under the Development Agreement and under that certain Conservation Easement to Restrict Impervious Cover dated effective August 15, 2002 and recorded under Document No. 2002151985 of the Real Property Records of Travis County, Texas and under Document No. 02022403 of the Real Property Records of Hays County, Texas (the “Conservation Easement”). 

9

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City, Escarpment and CCLC agree as follows:

1.    Recitals Incorporated.  The above recitals are incorporated herein for all purposes.

2.    Capitalized Terms.  Any capitalized term that is used herein and is not otherwise defined herein shall have the meaning that is ascribed to it elsewhere in the Development Agreement. 

3.    The Land.  The definition of Land is hereby amended to incorporate the Parcel 103 Option Tracts and the Parcel 113 Option Tracts as more particularly described on Exhibit “A” and Exhibit “B” respectively.  Accordingly, the Parcel 103 Option Tracts and the Parcel 113 Option Tracts, as part of the Land, are subject to the terms and provisions of the Development Agreement for all purposes.

4.    Development Allocations.  The Parcel 103 Option Tracts are hereby incorporated into and made a part of Parcel 103 without any addition Development Allocation.  The Parcel 113 Option Tracts are hereby incorporated into and made a part of Parcel 113 without any additional Development Allocation.
5.    Allowable Impervious Cover.  In accordance with the Development Agreement and Exhibit “E-1” to the Development Agreement, the Allowable Impervious Cover for Parcel 103 is increased by 1.65 acres by the addition of the Parcel 103 Option Tracts and the Parcel 113 Option Tracts.  As a result, Parcel 103 has a total allocation of 18.60 acres of Allowable Impervious Cover and has a Maximum Impervious Cover limitation of 18.60 acres.  Accordingly, Exhibit “E-1” to the Development Agreement is hereby amended to provide that the total allocation of Allowable Impervious Cover for Parcel 103 is 18.60 acres and to provide that Maximum Impervious Cover limitation for Parcel 103 is 18.60 acres.

6.    Miscellaneous.

		
	a.
	Conservation Easement.  Contemporaneously with the execution of this First Amendment, the City, CCLC and Escarpment are entering into that certain First Amendment to Conservation Easement to Restrict Impervious Cover of even date herewith incorporating the Parcel 103 Option Tracts and the Parcel 113 Option Tracts therein (the “First Amendment to Conservation Easement”).

		
	b.
	Entire Agreement.  This First Amendment, together with the Development Agreement, and the First Amendment to Conservation Easement, together with the Conservation Easement, 

10

sets forth the entire understanding of the parties and supersedes all prior agreements or understandings, whether written or oral, with respect to the subject matter hereof. 
		
	c.
	Binding Effect.  This First Amendment will extend to and be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and will run with the Parcel 103 Option Tracts and the Parcel 113 Option Tracts.

		
	d.
	Counterparts.  This First Amendment may be executed in two or more counterparts, each of which will be deemed an original, which together will constitute one in the same agreement.

		
	e.
	Governing Law.  This First Amendment will be governed by and construed in accordance with the laws of the State of Texas.

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed as of the date and year first above written.

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

11

		
	STATE OF TEXAS
	§

§
		
	COUNTY OF TRAVIS
	§

This instrument was acknowledged before me on the 12th day of November, 2004, 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, on behalf of said enitities.

/s/ Jody L. Bickel        
Notary Public, State of Texas
ESCARPMENT VILLAGE, L.P.,
a Texas limited partnership
		
	By:
	Escarpment Village Management, L.L.C., a Texas

limited liability company, its sole General Partner
		
	By:
	Circle C Land, L.P., a Texas limited

partnership, Manager
		
	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

12

THE STATE OF TEXAS    §
§
COUNTY  OF  TRAVIS    §
This instrument was acknowledged before me on the 12th day of November, 2004, 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, manager of Escarpment Village Management, L.L.C., a Texas limited liability company, general partner of Escarpment Village, L.P., a Texas limited partnership, on behalf of such entities.
/s/ Jody L. Bickel                
Notary Public, State of Texas

THE CITY OF AUSTIN,
a Texas municipal corporation

By: /s/ Laura J. Huffman            
Name: Laura J. Huffman
Title: Assistant City Manager
Date : December 16, 2004

		
	STATE OF TEXAS
	§

§
		
	COUNTY OF TRAVIS
	§

This instrument was acknowledged before me on the 16th day of December, 2004, by Laura J. Huffman, Assistant City Manager of The City of Austin, a Texas municipal corporation, on behalf of said municipal corporation

/s/ Annette M. Bogusch    
Notary Public, State of Texas

APPROVED AS TO FORM:

/s/ Alison Gallaway        
Assistant City Attorney

13

CONSENT AND SUBORDINATION OF MORTGAGEE
Comerica Bank, a Michigan banking corporation, successor by merger to Comerica Bank-Texas, is the legal owner and holder of certain indebtedness of Stratus Properties Inc., Stratus Properties Operating Co., L.P., Circle C Land Corp., and Austin 290 Properties, Inc., which is secured by, among other things, a deed of trust lien granted in a deed of trust dated December 16, 1999, from Circle C Land Corp., a Texas corporation, to Gary W. Orr, Trustee for Comerica Bank, recorded under Document No. 1999158708, Official Public Records of Travis County, Texas, and by a second lien deed of trust lien granted in a deed of trust dated December 16, 1999, from Circle C Land Corp., a Texas corporation, to Gary W. Orr, Trustee for Comerica Bank, recorded under Document No. 1999158709, Official Public Records of Travis County, Texas, and as both were modified by Modification Agreement dated December 27, 2000, recorded under Document No. 2000204551, Official Public Records of Travis County, Texas, and Document No. 00030106 (Volume 1754, Page 392), Official Public Records of Hays County, Texas, Second Modification Agreement dated December 18, 2001, recorded under Document No. 2001215158, Official Public Records of Travis County, Texas, and Document No. 01031701 (Volume 1924, Page 563), Official Public Records of Hays County, Texas, and Third Modification and Extension Agreement dated June 30, 2003, recorded under Document No. 2003237684, Official Public Records of Travis County, Texas, and further secured by a deed of trust lien granted in a second deed of trust dated September 22, 2003, from Stratus Properties Inc., Stratus Properties Operating Co., L.P., Circle C Land Corp., Austin 290 Properties, Inc., Stratus 7000 West Joint Venture and Lantana Office Properties I, L.P., to Melinda Chausse, Trustee for Comerica Bank, recorded under Document No. 2003237682, Official Public Records of Travis County, Texas, and a deed of trust lien granted in a subordinate deed of trust dated February 27, 2004, from Stratus Properties Inc., Stratus Properties Operating Co., L.P., Circle C Land, L.P., Austin 290 Properties, Inc., Stratus 7000 West Joint Venture and Lantana Office Properties I, L.P., to Melinda Chausse, Trustee for Comerica Bank, recorded under Document No. 2004047013, Official Public Records of Travis County, Texas (collectively and as modified, the “Deed of Trust”).
Comerica Bank hereby joins in this Amendment for the sole purpose of consenting to the Amendment and subordinating the Deed of Trust and all other liens it may have securing such indebtedness, to the Amendment and the interests of the City of Austin, and its successors and assigns, in and to the Amendment.  The undersigned has the authority to execute this Consent and Subordination on behalf of Comerica Bank and represents, in that regard, that all corporate action has been taken by Comerica Bank to make this a binding Consent and Subordination.
COMERICA BANK,
a Michigan banking corporation, successor by
merger to Comerica Bank-Texas
By:/s/ Shery R. Layne    
       Shery R. Layne, Senior Vice President

14

THE STATE OF TEXAS    §
§
COUNTY  OF  DALLAS    §
This instrument was acknowledged before me on the 10th day of November, 2004, 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.
/s/ Kristine K. Finn    
Notary Public Signature
(seal)

15

STATE OF TEXAS            §
§
COUNTIES OF TRAVIS        §
AND HAYS                §

THIRD AMENDMENT TO DEVELOPMENT AGREEMENT

THIS THIRD AMENDMENT TO DEVELOPMENT AGREEMENT (this “Third Amendment”) is entered into as of the 2nd day of March, 2005, by and among the CITY OF AUSTIN, a home rule city and municipal corporation located in Travis, Hays and Williamson Counties in the State of Texas (the “City”), ESCARPMENT VILLAGE, L.P., a Texas limited partnership (“Escarpment”) and CIRCLE C LAND, L.P., a Texas limited partnership, formerly known as Circle C Land Corp., a Texas corporation (“CCLC”).  The City, Escarpment and CCLC are collectively referred to as the “Parties”. 

RECITALS

A.    The City and CCLC entered into that certain Development Agreement dated effective August 15, 2002 and recorded under Document No. 2002151984 of the Real Property Records of Travis County, Texas and Document No. 02022402 of the Real Property Records of Hays County, Texas, which was amended by First Amendment to Development Agreement dated June 21, 2004 and recorded under Document No. 2004135909 of the Real Property Records of Travis County, Texas and by Second Amendment to Development Agreement dated November 9, 2004 and recorded under Document No. 2004236024 of the Real Property Records of Travis County, Texas (the “Development Agreement”).

B.    Escarpment, as of the date hereof, is the owner of the Option Tract described on Exhibit “A” attached hereto and incorporated herein by reference (the “Remaining Parcel 103 Option Tract”).
C.    Escarpment and CCLC desire to exercise the option set forth in Section 2.3 of the Development Agreement to incorporate the Remaining Parcel 103 Option Tract into the Land under the Development Agreement and under that certain Conservation Easement to Restrict Impervious Cover dated effective August 15, 2002 and recorded under Document No. 2002151985 of the Real Property Records of Travis County, Texas and under Document No. 02022403 of the Real Property Records of Hays County, Texas, which was amended by First Amendment to Conservation Easement dated November 9, 2004 and recorded under Document No. 2004236025 of the Real Property Records of Travis County, Texas (as amended, the “Conservation Easement”). 

16

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City, Escarpment and CCLC agree as follows:

1.    Recitals Incorporated.  The above recitals are incorporated herein for all purposes.

2.    Capitalized Terms.  Any capitalized term that is used herein and is not otherwise defined herein shall have the meaning that is ascribed to it elsewhere in the Development Agreement. 

3.    The Land.  The definition of Land is hereby amended to incorporate the the Remaining Parcel 103 Option Tract as more particularly described on Exhibit “A”.  Accordingly, the Remaining Parcel 103 Option Tract, as part of the Land, is subject to the terms and provisions of the Development Agreement for all purposes.

4.    Development Allocations.  The Remaining Parcel 103 Option Tract is hereby incorporated into and made a part of Parcel 103 without any addition Development Allocation.  
5.    Allowable Impervious Cover.  In accordance with the Development Agreement and Exhibit “E-1” to the Development Agreement, the Allowable Impervious Cover for Parcel 103 is increased by 0.15 acres by the addition of the Remaining Parcel 103 Option Tract.  As a result, Parcel 103 has a total allocation of 18.75 acres of Allowable Impervious Cover and has a Maximum Impervious Cover limitation of 18.75 acres.  Accordingly, Exhibit “E-1” to the Development Agreement is hereby amended to provide that the total allocation of Allowable Impervious Cover for Parcel 103 is 18.75 acres and to provide that Maximum Impervious Cover limitation for Parcel 103 is 18.75 acres.
6.    Miscellaneous.

		
	a.
	Conservation Easement.  Contemporaneously with the execution of this Third Amendment, the City, CCLC and Escarpment are entering into that certain Second Amendment to Conservation Easement to Restrict Impervious Cover of even date herewith incorporating the Remaining Parcel 103 Option Tract therein (the “Second Amendment to Conservation Easement”).

		
	b.
	Entire Agreement.  This Third Amendment, together with the Development Agreement, and the Second Amendment to Conservation Easement, together with the Conservation Easement, sets forth the entire understanding of the parties and supersedes all prior agreements or understandings, whether written or oral, with respect to the subject matter hereof. 

17

		
	c.
	Binding Effect.  This Third Amendment will extend to and be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and will run with the Remaining Parcel 103 Option Tract.

		
	d.
	Counterparts.  This Third Amendment may be executed in two or more counterparts, each of which will be deemed an original, which together will constitute one in the same agreement.

		
	e.
	Governing Law.  This Third Amendment will be governed by and construed in accordance with the laws of the State of Texas.

IN WITNESS WHEREOF, the Parties have caused this Third Amendment to be executed as of the date and year first above written.

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

18

		
	STATE OF TEXAS
	§

§
		
	COUNTY OF TRAVIS
	§

This instrument was acknowledged before me on the 23rd day of March, 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, on behalf of said entities.

/s/ Jody L. Bickel            
Notary Public, State of Texas
ESCARPMENT VILLAGE, L.P.,
a Texas limited partnership
		
	By:
	Escarpment Village Management, L.L.C., a Texas

limited liability company, its sole General Partner
		
	By:
	Circle C Land, L.P., a Texas limited

partnership, Manager
		
	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

19

THE STATE OF TEXAS    §
§
COUNTY  OF  TRAVIS    §
This instrument was acknowledged before me on the 23rd day of March, 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, manager of Escarpment Village Management, L.L.C., a Texas limited liability company, general partner of Escarpment Village, L.P., a Texas limited partnership, on behalf of such entities.

/s/ Jody L. Bickel                    
Notary Public, State of Texas
THE CITY OF AUSTIN,
a Texas municipal corporation

By: /s/ Laura J. Huffman        
Name: Laura J. Huffman        
Title: Assistant City Manager         
Date : March 23, 2005        

		
	STATE OF TEXAS
	§

§
		
	COUNTY OF TRAVIS
	§

This instrument was acknowledged before me on the 29th day of March, 2005, by Laura J. Huffman, Assistant City Manager of The City of Austin, a Texas municipal corporation, on behalf of said municipal corporation

/s/ Annette M. Bogusch                
Notary Public, State of Texas

APPROVED AS TO FORM:

/s/ Alison Gallaway        
Assistant City Attorney

20

CONSENT AND SUBORDINATION OF MORTGAGEE
Comerica Bank, a Michigan banking corporation, successor by merger to Comerica Bank-Texas, is the legal owner and holder of certain indebtedness of Stratus Properties Inc., Stratus Properties Operating Co., L.P., Circle C Land Corp., and Austin 290 Properties, Inc., which is secured by, among other things, a deed of trust lien granted in a deed of trust dated December 16, 1999, from Circle C Land Corp., a Texas corporation, to Gary W. Orr, Trustee for Comerica Bank, recorded under Document No. 1999158708, Official Public Records of Travis County, Texas, and by a second lien deed of trust lien granted in a deed of trust dated December 16, 1999, from Circle C Land Corp., a Texas corporation, to Gary W. Orr, Trustee for Comerica Bank, recorded under Document No. 1999158709, Official Public Records of Travis County, Texas, and as both were modified by Modification Agreement dated December 27, 2000, recorded under Document No. 2000204551, Official Public Records of Travis County, Texas, and Document No. 00030106 (Volume 1754, Page 392), Official Public Records of Hays County, Texas, Second Modification Agreement dated December 18, 2001, recorded under Document No. 2001215158, Official Public Records of Travis County, Texas, and Document No. 01031701 (Volume 1924, Page 563), Official Public Records of Hays County, Texas, and Third Modification and Extension Agreement dated June 30, 2003, recorded under Document No. 2003237684, Official Public Records of Travis County, Texas, and further secured by a deed of trust lien granted in a second deed of trust dated September 22, 2003, from Stratus Properties Inc., Stratus Properties Operating Co., L.P., Circle C Land Corp., Austin 290 Properties, Inc., Stratus 7000 West Joint Venture and Lantana Office Properties I, L.P., to Melinda Chausse, Trustee for Comerica Bank, recorded under Document No. 2003237682, Official Public Records of Travis County, Texas, a deed of trust lien granted in a subordinate deed of trust dated February 27, 2004, from Stratus Properties Inc., Stratus Properties Operating Co., L.P., Circle C Land, L.P., Austin 290 Properties, Inc., Stratus 7000 West Joint Venture and Lantana Office Properties I, L.P., to Melinda Chausse, Trustee for Comerica Bank, recorded under Document No. 2004047013, Official Public Records of Travis County, Texas, a deed of trust lien granted in a subordinate deed of trust dated December 21, 2004, from Stratus Properties Inc., Stratus Properties Operating Co., L.P., Circle C Land, L.P., and Austin 290 Properties, Inc., to Melinda Chausse, Trustee for Comerica Bank, recorded under Document No. 2004240490, Official Public Records of Travis County, Texas, and a deed of trust lien granted in a subordinate deed of trust dated December 21, 2004, from Escarpment Village, L.P., to Melinda Chausse, Trustee for Comerica Bank, recorded under Document No. 2004240488, Official Public Records of Travis County, Texas (collectively and as modified, the “Deed of Trust”).
Comerica Bank hereby joins in this Third Amendment for the sole purpose of consenting to the Third Amendment and subordinating the Deed of Trust and all other liens it may have securing such indebtedness, to the Third Amendment and the interests of the City of Austin, and its successors and assigns, in and to the Third Amendment.  The undersigned has the authority to execute this Consent and Subordination on behalf of Comerica Bank and represents, in that regard, that all corporate action has been taken by Comerica Bank to make this a binding Consent and Subordination.

21

COMERICA BANK,
a Michigan banking corporation, successor by
merger to Comerica Bank-Texas
By:/s/ Shery R. Layne    
       Shery R. Layne, Senior Vice President

THE STATE OF TEXAS    §
§
COUNTY  OF  DALLAS    §
This instrument was acknowledged before me on the 3rd day of March, 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.
/s/ Kristine K. Finn    
Notary Public Signature
(seal)

22

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