Document:

ex10-1.htm

    
      

    

    THIRD MODIFICATION AND
EXTENSION AGREEMENT

    

    This
THIRD MODIFICATION AND EXTENSION AGREEMENT (this “Agreement”)
dated as of May 30, 2008 by and between STRATUS PROPERTIES INC., a
Delaware corporation (“Stratus”),
STRATUS PROPERTIES OPERATING
CO., L.P., a Delaware limited partnership (“SPOC”),
CIRCLE C LAND, L.P., a
Texas limited partnership (“Circle
C”), and AUSTIN 290
PROPERTIES, INC., a Texas corporation (“Austin”)
(Stratus, SPOC, Circle C and Austin are sometimes referred to in this Agreement
severally as “Borrower”),
CALERA COURT, L.P., a
Texas limited partnership ("Calera
Court"), OLY STRATUS
BARTON CREEK I JOINT VENTURE, a Texas joint venture ("Stratus
JV") and COMERICA BANK ("Lender");

    

    W I T N E
S S E T H:

    

    WHEREAS,
Borrower has executed and delivered to Lender, inter alia, (i) that
certain Revolving Promissory Note dated as of September 30, 2005, payable to the
order of Lender in the original principal sum of $45,000,000.00, with interest
and principal payable as therein provided, which note was amended by that
certain (i) Modification and Extension Agreement (the "First
Modification") dated as of May 30, 2006, executed by and among Borrower,
Calera Court, Stratus JV and Lender, and recorded under Clerk’s File No.
2006140557 of the Real Property Records of Travis County, Texas and (ii) Second
Modification and Extension Agreement (the "Second
Modification") dated as of May 30, 2007, executed by and among Borrower,
Calera Court, Stratus JV and Lender, and recorded under Clerk’s File No.
2007139303 of the Real Property Records of Travis County, Texas (said note, as
amended by the First Modification and Second Modification, is herein called the
“Note”);
(ii) that certain Loan Agreement dated of even date with the Note between
Borrower, Calera Court and Lender, which loan agreement was amended by the First
Modification and Second Modification (said loan agreement, as amended by the
First Modification and Second Modification, is herein called the "Loan
Agreement"); (iii) that certain Deed of Trust, Security Agreement and
Assignment of Rents dated of even date with the Note from Stratus to Melinda
Chausse, Trustee, securing the payment of the Note, covering certain real and
personal property described therein, recorded under Clerk’s File No. 2005183345
of the Real Property Records of Travis County, Texas, which deed of trust was
amended by the First Modification and Second Modification (said deed of trust,
as amended by the First Modification and Second Modification, is herein called
the “Stratus
Deed of Trust”); (iv) that certain Deed of Trust, Security Agreement and
Assignment of Rents dated of even date with the Note from Circle C to Melinda
Chausse, Trustee, securing the payment of the Note, covering certain real and
personal property described therein, recorded under Clerk’s File No. 2005183344
of the Real Property Records of Travis County, Texas, which deed of trust was
amended by the First Modification and Second Modification (said deed of trust,
as amended by the First Modification and Second Modification, is herein called
the “Circle C
Deed of Trust”); (v) that certain Deed of Trust, Security Agreement and
Assignment of Rents dated of even date with the Note from SPOC to Melinda
Chausse, Trustee, securing the payment of the Note, covering certain real and
personal property described therein, recorded under Clerk’s File No. 2005183343
of the Real Property Records of Travis County, Texas, which deed of trust was
amended by the First Modification and Second Modification (said deed of trust,
as amended by the First Modification and Second Modification, is herein called
the

     

    
      
        
        

      

      
        -1-

        
          

        

      

      “SPOC Deed
of Trust”); (vi) that certain Deed of Trust, Security Agreement and
Assignment of Rents dated of even date with the Note from Austin to Melinda
Chausse, Trustee, securing the payment of the Note, covering certain real and
personal property described therein, recorded under Clerk’s File No. 2005183347
of the Real Property Records of Travis County, Texas, which deed of trust was
amended by the First Modification and Second Modification (said deed of trust,
as amended by the First Modification and Second Modification, is herein called
the “Austin
Deed of Trust”); (vii) that certain Deed of Trust, Security Agreement and
Assignment of Rents dated of even date with the Note from Calera Court to
Melinda Chausse, Trustee, securing the payment of the Note, covering certain
real and personal property described therein, recorded under Clerk’s File No.
2005183346 of the Real Property Records of Travis County, Texas, which deed of
trust was amended by the First Modification and Second Modification (said deed
of trust, as amended by the First Modification and Second Modification, is
herein called the “Calera
Court Deed of Trust”); (viii) that certain Deed of Trust, Security
Agreement and Assignment of Rents dated of even date with the Note from Stratus
JV to Melinda Chausse, Trustee, securing the payment of the Note, covering
certain real and personal property described therein, recorded under Clerk’s
File No. 2005183348 of the Real Property Records of Travis County, Texas, which
deed of trust was amended by the First Modification and Second Modification
(said deed of trust, as amended by the First Modification and Second
Modification, is herein called the “Stratus
JV Deed of Trust”) (the Stratus Deed of Trust, Circle C Deed of Trust,
SPOC Deed of Trust, Austin Deed of Trust, Calera Court and Stratus JV Deed of
Trust are herein collectively called the "Deed of
Trust", and all of the property covered by the Deed of Trust is herein
collectively called the “Mortgaged
Property”) (the Note, Loan Agreement, Deed of Trust, First Modification,
Second Modification and all other documents executed by Borrower and/or any
other party or parties evidencing or securing or otherwise in connection with
the loans evidenced by the Note being herein collectively called the "Loan
Documents");

    

    

    WHEREAS,
the Note is due and payable on May 30, 2009, and Borrower has requested that
Lender extend the term of the Note to May 30, 2010 and make certain other
modifications to the Loan Documents, and Lender is willing to do so on the terms
and conditions set forth below; and

    

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

    

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

    

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

    

    2.   Extension
of Maturity Date.  The maturity date of the Note is hereby
extended to May 30, 2010, 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.

     

     

    
      
        
        

      

      
        -2-

      

      
        
          
            

          

        

      

    

        3.    Modification
of Interest Rate.

    

    (a)           The
definition of Applicable Base Rate in the Note is hereby amended in its entirety
to read as follows:

     

    “'Applicable
Base Rate' shall mean the lesser of (a) the Base Rate from time to time
in effect minus
forty-five one-hundredths percent (.45%) per annum, or (b) the Maximum Lawful
Rate, but in no event shall the Applicable Base Rate ever be less than the Floor
Rate.  Fluctuations in the Applicable Base Rate shall become effective
immediately, without necessity for any notice whatsoever."

     

    (b)           The
definition of Applicable LIBOR Rate in the Note is hereby amended in its
entirety to read as follows:

     

    “'Applicable
LIBOR Rate' shall mean the lesser of (a) the rate of interest equal to
the Adjusted LIBOR Rate in effect for the subject Interest Period plus
two percent (2.0%) or (b) the Maximum Lawful Rate, but in no event shall the
Applicable LIBOR Rate ever be less than the Floor Rate."

    

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

    

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

    

    6.   Default;
Remedies.  If Borrower shall fail to keep or perform any of the
covenants or agreements contained herein or if any statement, representation or
warranty contained herein is false, misleading or erroneous in any material
respect, Borrower shall be

     

    
      
        
        

      

      
        -3-

        
          

        
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 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.           Notices.  Any
notice or communication required or permitted hereunder or under any of the Loan
Documents shall be given in writing and sent in the manner required under the
Loan Agreement.  Notwithstanding the foregoing, the address for
notices to Lender under the Loan Documents is hereby amended to the
following:

    

    Hand
Delivery:                     Comerica
Bank

    P.O. Box
650282

    M.C.
6504

    Dallas,
Texas  75265-0282

    Attention:  Commercial
Real Estate, Shery Layne

    

    
      
        
        

      

      
        -4-

        
          

        

      

       

    

    Mailing
Address:                 Comerica
Bank

    1717 Main
Street, 4th
Floor

    Dallas,
Texas  75201

    Attention:  Commercial
Real Estate, Shery Layne

    

    With a
copy
to:                    Thompson
& Knight LLP

    1722
Routh Street, Suite 1500

    Dallas,
Texas  75201

    Attention:  Mark
M. Sloan

    

    12.           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.

    

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

    

    14.           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.

    

    15.           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.

    

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

    

    17.           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

     

    
      
        
        

      

      
        -5-

        
          

        

      

      resolved
against the drafting party shall not be employed in the interpretation of this
Agreement to favor either party against the other.

    

    

    18.           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.

    

    19.           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.

    

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

    

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

    

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

    

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

    

    [SIGNATURE
PAGE FOLLOWS]

    
      
         

      

      
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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/ John E.
Baker                                  

       
John E. Baker, Senior Vice President

    

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

    

    
      	
               
      

            	
              By:

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

            

    

    

    
      	
               
      

            	
              By

            	
              Stratus
      Properties Inc., a Delaware corporation,  Sole
      Member

            

    

    

    

    By: /s/ John E.
Baker                

    John E.
Baker,

    Senior
Vice President

    

    CIRCLE
C LAND, L.P.,

    a Texas
limited partnership

    

    
      	
               
      

            	
              By:

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

            

    

    

    
      	
               
      

            	
              By

            	
              Stratus
      Properties Inc., a Delaware corporation, Sole
  Member

            

    

    

    

    By: /s/ John E.
Baker               

    John E.
Baker,

    Senior
Vice President

    

    AUSTIN
290 PROPERTIES, INC.,

    a Texas
corporation

    

    By: /s/ John E.
Baker                                   

        John
E. Baker, Senior Vice President

    

    
      
        
        

      

      
        -7-

        
          

        

      

       

    

    LENDER:

    

    COMERICA
BANK

    

    

    By: /s/ Shery
Layne                                    

        
Shery Layne,  Senior Vice President

    

    
      
         

      

      
        -8-

        
          

        

      

       

    

    STATE
OF
TEXAS                                                                §

    §

    COUNTY
OF
TRAVIS                                                      §

    

    This
instrument was acknowledged before me on the 15th day of July, 2008, by John E.
Baker, Senior Vice President of Stratus Properties Inc., a Delaware corporation,
on behalf of said corporation.

    

    

    /s/ Carol
Fahs                                     
                                                                           

    Notary
Public, State of Texas

    My
Commission Expires:  4/8/2010       

    Printed
Name of Notary: Carol
Fahs

    

    

    STATE
OF
TEXAS                                                                §

    §

    COUNTY
OF
TRAVIS                                                      §

    

    This
instrument was acknowledged before me on the 15th day of July, 2008, by John E.
Baker, Senior Vice President of Stratus Properties Inc., a Delaware corporation,
Sole Member of STRS L.L.C., a Delaware limited liability company, General
Partner of Stratus Properties Operating Co., L.P., a Delaware limited
partnership, on behalf of said corporation, limited liability company and
limited partnership.

    

    

    /s/ Carol
Fahs                                 
                                                                           

    Notary
Public, State of Texas

    My
Commission Expires: 4/8/2010                                   

    Printed
Name of Notary: Carol
Fahs                            

    

    

    STATE
OF
TEXAS                                                                §

    §

    COUNTY
OF
TRAVIS                                                      §

    

    This
instrument was acknowledged before me on the 15th day of July, 2008, by John E.
Baker, Senior Vice President of Stratus Properties Inc., a Delaware corporation,
Sole Member of Circle C GP, L.L.C., a Delaware limited liability company,
General Partner of Circle C Land, L.P., a Delaware limited
partnership, on behalf of said corporation, limited liability company limited
partnership.

    

    /s/ Carol
Fahs                                                                
                                                                           

    Notary
Public, State of Texas

    My
Commission Expires: 04/8/2010                                

    Printed
Name of Notary: Carol
Fahs                           

     

    
      
        
        

      

      
        -9-

        
          

        

      

       

    

    

    STATE
OF
TEXAS                                                                §

    §

    COUNTY
OF
TRAVIS                                                      §

    

    This
instrument was acknowledged before me on the 15th day of July, 2008, by John E.
Baker, Senior Vice President of Austin 290 Properties Inc., a Delaware
corporation, on behalf of said corporation.

    

    

    /s/ Carol
Fahs                                                                
                                                                           

    Notary
Public, State of Texas

    My
Commission Expires: 4/8/2010                                  

    Printed
Name of Notary: Carol
Fahs                           

    

    

    

    STATE
OF
TEXAS                                                                §

    §

    COUNTY
OF
DALLAS                                                      §

    

    This
instrument was acknowledged before me on the 16th day of July, 2008, by Shery
Layne, Senior Vice President of Comerica Bank, on behalf of said
bank.

    

    

    /s/ Allene
Medlock                             
                                                                           

    Notary
Public, State of Texas

    My
Commission Expires: 11/14/2011                          

    Printed
Name of Notary: Allene
Medlock                 

    

    

    
      
         

      

      
        -10-

        
          

        

      

       

    

    CONSENT
OF CALERA COURT

    

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

    

    Executed
on the date of acknowledgement below but effective as of May 30,
2008.

    

    CALERA COURT, L.P. a Texas
limited partnership

    

    
      	
               
      

            	
              By:

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

            

    

    

    
      	
               
      

            	
              By:

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

            

    

    

    
      	
               
      

            	
              By:

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

            

    

    

    
      	
               
      

            	
              By:

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

            

    

    

    

    
      	
               
      

            	
              By:
      /s/ John E.
      Baker              
        

            

    

                  
John E. Baker,

              Senior Vice
President

    

    

    
      
        
        

      

      
        -11-

        
          

        

      

       

    

    STATE OF
TEXAS                                                                §

    §

    COUNTY OF
TRAVIS                                                                §

    

    This
instrument was acknowledged before me on the 15th day of July, 2008, by John E.
Baker, Senior Vice President of Stratus Properties Inc., a Delaware corporation,
Sole Member of STRS L.L.C., a Delaware limited liability company, General
Partner of Stratus Properties Operating Co., L.P., a Delaware limited
partnership, Manager of Calera Court Management, L.L.C., a Texas limited
liability company, General Partner of Calera Court, L.P., a Texas limited
partnership, on behalf of each said entity and said limited
partnership.

    

    /s/ Carol
Fahs                                                 
                                                                           

    Notary
Public in and for the State of Texas

    

    Carol
Fahs                                                       

    Printed/Typed
Name of Notary

    My
Commission Expires:

    

    4/8/2010                             .

    

    

    
      
         

      

      
        -12-

        
          

        

      

       

    

    CONSENT
OF STRATUS JV

    

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

    

    Executed
on the date of acknowledgement below but effective as of May 30,
2008.

    

    OLY
STRATUS BARTON CREEK I JOINT VENTURE,

    a Texas
joint venture

     

    
      	
               
      

            	
              By:

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

            

    

     

    
      	
               
      

            	
              By:

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

            

    

    

    

    By: /s/ John E.
Baker                                   

       
John E. Baker, Senior Vice President

    

    
      	
               
      

            	
              By:

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

            

    

     

    
      	
               
      

            	
              By:

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

            

    

    

    
      	
               
      

            	
              By:

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

            

    

     

    

    By: /s/ John E.
Baker               

    John E.
Baker,

    Senior
Vice President

    

    
      
        
        

      

      
        -13-

        
          

        

      

       

    

    

    STATE OF
TEXAS                                                      §

    §

    COUNTY OF
TRAVIS                                                      §

     

    The
foregoing instrument was acknowledged before me on the 15th day of July, 2008, by John E.
Baker, Senior Vice President of Stratus Properties Inc., a Delaware corporation,
Sole Member of STRS L.L.C., a Delaware limited liability company, venturer of
Oly Stratus Barton Creek I Joint Venture, a Texas joint venture, on behalf of
each such entities.

     

    

     

    [ S E A L
]                                                                           /s/ Carol
Fahs                             

                        Notary
Public, State of Texas

    

    My
Commission
Expires:                                                 Carol
Fahs                                      

                        (Printed
Name of Notary Public)

    4/8/2010                              

     

    

    

    

    

    

    STATE OF
TEXAS                                                      §

    §

    COUNTY OF
TRAVIS                                                      §

     

    The
foregoing instrument was acknowledged before me on the 15th day of July, 2008,
by John E. Baker, Senior Vice President of Stratus Properties Inc., a Delaware
corporation, Sole Member of STRS L.L.C., a Delaware limited liability company,
General Partner of Stratus ABC West I, L.P., a Texas limited partnership,
venturer of Oly Stratus Barton Creek I Joint Venture, a Texas joint venture, on
behalf of each such entities.

     

    

     

    [ S E A L
]                                                                           /s/ Carol
Fahs                         

                        Notary
Public, State of Texas

    

    My
Commission
Expires:                                                Carol
Fahs                                    

                      
(Printed Name of Notary Public)

    4/8/2010                            .

     

    
      
         

      

      
        -14-Exhibit 4
                                    ---------

                           EMMET, MARVIN & MARTIN, LLP
                               COUNSELLORS AT LAW

                           120 BROADWAY               177 MADISON AVENUE
                     NEW YORK, NEW YORK 10271    MORRISTOWN, NEW JERSEY 07960
                               _____                    (973) 538-5600
                                                      FAX: (973) 538-6448
WRITER'S DIRECT DIAL      (212) 238-3000                     _____

                               _____                1351 WASHINGTON BOULEVARD
                                                           2ND FLOOR
                        FAX: (212) 238-3100     STAMFORD, CONNECTICUT 06902-4543
                    http://www.emmetmarvin.com          (203) 425-1400
                                                      FAX: (203) 425-1410

                                                                   July 17, 2008

The Bank of New York Mellon
  as Depositary
101 Barclay Street
New York, New York, 10286

Re:   American Depositary Receipts for  Ordinary Shares, Par  Value,  of Climate
      Exchange PLC
      --------------------------------------------------------------------------

Ladies and Gentlemen:

      We refer to the  registration  statement to be filed on Form F-6 under the
Securities  Act of 1933  (the  "Registration  Statement")  by the  legal  entity
created by the  agreement  (the  "Deposit  Agreement")  for issuance of American
Depositary  Shares  ("ADSs")  which  may be  evidenced  by  American  Depositary
Receipts  ("ADRs") for [ordinary shares] [without par value] of Climate Exchange
for which you propose to act as Depositary.

      We are of the opinion that the ADSs covered by the Registration Statement,
when issued in accordance  with the terms of the Deposit  Agreement,  will, when
sold,  be legally  issued and will  entitle  the  holders  thereof to the rights
specified in the Deposit Agreement and the ADRs.

      This  opinion  may  be  used  by  you as an  exhibit  to the  Registration
Statement.

                                                               Very truly yours,
                                                  /s/ Emmet, Marvin & Martin LLP
                                                     EMMET, MARVIN & MARTIN, LLP

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