Exhibit 10.17
When recorded, return to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
5400 Renaissance Tower
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
SECOND MODIFICATION AGREEMENT
This SECOND MODIFICATION AGREEMENT ("Agreement") is made to
be effective as of the 24th day of February, 2000, by and between
COMERICA BANK-TEXAS, a state banking association ("Lender"),
STRATUS 7000 WEST JOINT VENTURE, a Texas joint venture
("Borrower"), and STRATUS PROPERTIES, INC., a Delaware
corporation (the "Guarantor").
W I T N E S S E T H :
WHEREAS, Lender made a loan ("Loan") to Borrower on April 9,
1999, in the maximum principal amount of SIX MILLION SIX HUNDRED
THOUSAND AND NO/100 DOLLARS ($6,600,000.00); and
WHEREAS, Lender and Borrower executed that certain
Construction Loan Agreement ("Loan Agreement") dated April 9,
1999, pertaining to the Loan; and
WHEREAS, the Borrower executed and delivered to Lender that
certain Promissory Note (the "$6,600,000.00 Note") dated April 9,
1999, payable to the order of Lender in the amount of and
evidencing the Loan; and
WHEREAS, the Borrower executed and delivered that certain
Amended and Restated Deed of Trust dated of even date with the
$6,600,000.00 Note to ▇▇▇▇ ▇. ▇▇▇, as trustee ("Trustee"), for
the benefit of the Lender, recorded under Document No. ▇▇▇▇▇▇▇▇▇▇
of the Official Records of ▇▇▇▇▇▇ County, Texas, covering the
real property described in Exhibit A attached hereto and
incorporated herein for all purposes, together with all
improvements, appurtenances, other properties (whether real or
personal), rights and interests described in and encumbered by
the Deed of Trust ("Property"), to secure the payment of the
$6,600,000.00 Note and performance by Borrower of the other
obligations set forth in the Security Documents (as herein
defined); and
WHEREAS, the Borrower executed and delivered to Lender that
certain Assignment of Rents and Leases (the "Assignment") dated
of even date with the $6,600,000.00 Note, assigning to Lender all
rents, leases, income, revenues, issues and profits which may
arise from the operation or ownership of the Property, to secure
the payment of the $6,600,000.00 Note and performance by Borrower
of the other obligations set forth in the Security Documents; and
WHEREAS, the Borrower caused to be issued by Chicago Title
Insurance Company ("Title Company") that certain Mortgagee Policy
of Title Insurance ("Policy") No.44-0394-101-339, dated April 16,
1999, in the amount of the $6,600,000.00 Note, insuring the
dignity and priority of the lien created and evidenced by the
Amended and Restated Deed of Trust and the Assignment; and
WHEREAS, as of December 31, 1999, the Borrower caused
Stratus Properties Inc., the Guarantor to execute and deliver to
Lender that certain Guaranty ("Guaranty") guaranteeing the
payment obligations under the $6,600,000.00 Note and other
monetary obligations contained in the Security Documents and
performance by Borrower of the other obligations as set forth in
the Security Documents subject to and on the terms and conditions
set forth in the Guaranty, which Guaranty was in substitution of
that prior guaranty executed and delivered as of April 9, 1999;
and
WHEREAS, the Borrower, Lender and Guarantor entered into
that certain Modification Agreement dated as of the 16th day of
August, 1999, which Modification Agreement was recorded under
Document No. 1999093007 of the Official Records of ▇▇▇▇▇▇ County,
Texas, and thereafter entered into that certain Second Amendment
to Construction Loan Agreement executed effective as of the 31st
day of December, 1999; and
WHEREAS, Borrower thereafter executed for the benefit of
Lender that certain Second Amended and Restated Deed of Trust
(the "Deed of Trust") dated of even date herewith, wherein Lender
and Borrower, among other things, agreed that the Property would
also secure that certain Phase II construction loan in addition
to the Phase I loan covered by the above-referenced Loan
Agreement; and
WHEREAS, the Lender, Borrower and Guarantor now propose to
modify certain of the terms and provisions of the Loan Agreement,
as previously amended, the Assignment, the $6,600,000.00 Note,
the Deed of Trust, the Guaranty and the other related documents
executed by Borrower or third parties pertaining to, evidencing
or securing the Loan (collectively, the "Security Documents").
NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Lender, Borrower
and Guarantor hereby agree as follows:
1. Increase of Indebtedness. The definition of
"Indebtedness" (the "Further Indebtedness Provision") of the
Amended and Restated Deed of Trust contemplates that other debts
or obligations of Borrower to Lender, whensoever or howsoever
incurred and of whatever nature, would be secured by the Deed of
Trust. In accordance with the terms of the Second Amended and
Restated Deed of Trust of even date herewith, Borrower and Lender
hereby agree that the Property which secures the existing Loan
shall also secure the additional indebtedness in the amount of
SEVEN MILLION SEVEN HUNDRED THOUSAND AND NO/100 DOLLARS
($7,700,000.00) as evidenced by that certain Promissory Note (the
"$7,700,000.00 Note") executed by Borrower as maker for the
benefit of Lender as payee of even date herewith. Borrower
hereby promises to pay to the order of Lender the principal sum
of the $7,700,000.00 Note and the $6,600,000.000 Note (sometimes
hereinafter referred to collectively as the "Note"), or so much
thereof as may be advanced, less any repayments of the principal
thereof heretofore made, together with interest thereon at the
rate, on the dates, and in the manner specified therein.
2. Current $6,600,000.00 Note Balance. Prior to the
execution hereof, the aggregate amount advanced by Lender under
the $6,600,000.00 Note was FOUR MILLION SIX HUNDRED FORTY-ONE
THOUSAND AND NO/100 DOLLARS ($4,641,000.00). There are committed
funds remaining in the amount of ONE MILLION NINE HUNDRED
FIFTY-NINE THOUSAND AND NO/100 DOLLARS ($1,959,000.00) to be
disbursed in accordance with the Security Documents.
3. Extension of Maturity. The maturity date of the
$6,600,000.00 Note is hereby extended until August 24, 2001, when
the unpaid principal balance of the $6,600,000.00 Note, together
with all accrued but unpaid interest thereon, shall be due and
payable, which maturity date coincides with the maturity date for
the $7,700,000.00 Note of even date herewith. In each instance
in the $6,600,000.00 Note or in the Security Documents where
there is a reference to the maturity date, said maturity date
shall mean August 24, 2001 in lieu of the maturity date as shown.
The Borrower hereby renews, but does not extinguish, the
$6,600,000.00 Note and the liens, security interests and
assignments created and evidenced by the Deed of Trust and other
Security Documents, and in this regard all of the Security
Documents are hereby renewed and modified by extending the
maturity date thereof as set forth above. Borrower covenants to
observe, comply with and perform each of the terms and provisions
of the Security Documents, as modified hereby.
4. Modification of Payment Terms in the $6,600,000.00
Note. The payment schedule set forth in Section 3.1 of the
$6,600,000.00 Note shall be deleted in its entirety, and the
following new payment schedule shall be inserted in lieu thereof:
"3.1 Payment Schedule. This Note shall be due and
payable as follows:
(a) Commencing on May 5, 1999, and continuing
thereafter on the fifth (5th) day of each successive
month until the Maturity Date, Maker shall pay Payee
all then accrued but unpaid interest hereon.
(b) Commencing on September 5, 2000, and
continuing on the fifth (5th) day of each month
thereafter until the Maturity Date, a Monthly Principal
Payment (hereinafter defined), together with all then
accrued but unpaid interest hereon, shall be due and
payable; and
(c) The outstanding principal balance hereof and
any and all accrued but unpaid interest thereon shall
be due and payable in full on the Maturity Date or upon
earlier maturity hereof, whether by acceleration or
otherwise.
For purposes hereof, "Monthly Principal Payment" shall
mean that amount equal to 1.19% of the then outstanding
principal balance as of September 1, 2000 owed under
this Note divided by twelve (12) months. Payee shall
furnish said amount, which is based upon a twenty-five
(25) year, mortgage equivalent amortization schedule,
to Maker in writing, which fixed amount shall
thereafter constitute the Monthly Principal Payment."
5. Events of Default. Borrower hereby agrees that the
Loan Agreement, as previously amended, and the other Security
Documents shall be amended whereby the following "Event of
Default" shall be included as an additional Event of Default in
said documents:
"An Event of Default as defined under the
$7,700,000.00 Note dated February 24, 2000 executed by
Borrower as maker to Lender as payee or under any of
the loan documents which secure the $7,700,000.00 Note
shall be deemed to constitute an Event of Default under
the $6,600,000.00 Note and the Security Documents which
secure the $6,600,000.00 Note."
6. Title Insurance. Contemporaneously with the execution
and delivery hereof, the Borrower shall cause the Title Company
to issue to Lender a standard Texas form Mortgagee Policy of
Title Insurance in the amount of the indebtedness for the
$6,600,000.00 Note and the $7,700,000.00 Note, insuring the
dignity and priority of the lien of the Deed of Trust and
Assignment, as previously modified and as further modified by the
terms and provisions hereof, and subject only to (i) the
exceptions and encumbrances specified in Schedule B of the
Policy, (ii) such other exceptions as may have been approved in
writing by Lender at the time of execution hereof, and
(iii) taxes on the Property for the current and subsequent years,
but not yet due and payable.
7. Acknowledgment by Borrower. Except as otherwise
specified herein, the terms and provisions hereof shall in no
manner impair, limit, restrict or otherwise affect the
obligations of Borrower or any third party to Lender, as
evidenced by the Security Documents. Borrower hereby
acknowledges, agrees and represents that (i) Borrower is indebted
to Lender pursuant to the terms of the $6,600,000.00 Note, as
modified hereby and of the $7,700,000.00 Note; (ii) the liens,
security interests and assignments created and evidenced by the
Security Documents are, respectively, valid and subsisting liens,
security interests and assignments of the respective dignity and
priority recited in the Security Documents; (iii) there are no
claims or offsets against, or defenses or counterclaims to, the
terms or provisions of the Security Documents, and the other
obligations created or evidenced by the Security Documents;
(iv) Borrower has no claims, offsets, defenses or counterclaims
arising from any of Lender's acts or omissions with respect to
the Property, the Security Documents or Lender's performance
under the Security Documents or with respect to the Property;
(v) the representations and warranties contained in the Security
Documents are true and correct representations and warranties in
all material respects of Borrower and to the knowledge of
Borrower, of any third parties, as of the date hereof; and
(vi) Lender is not in default and no event has occurred which,
with the passage of time, giving of notice, or both, would
constitute a default by Lender of Lender's obligations under the
terms and provisions of the Security Documents. To the extent
Borrower now has any claims, offsets, defenses or counterclaims
against Lender or the repayment of all or a portion of the Loan,
whether known or unknown, fixed or contingent, same are hereby
forever irrevocably waived and released in their entirety.
8. No Waiver of Remedies. Except as may be expressly set
forth herein, nothing contained in this Agreement shall
prejudice, act as, or be deemed to be a waiver of any right or
remedy available to Lender by reason of the occurrence or
existence of any fact, circumstance or event constituting a
default under the Note or the other Security Documents.
9. Joinder of Guarantor. By its execution hereof ,
Guarantor hereby (i) acknowledges and consents to the terms and
provisions hereof; (ii) ratifies and confirms the Guaranty,
including all interest and costs of collection, to or for the
benefit of Lender; (iii) agrees that the Guaranty is and shall
remain in full force and effect and that the terms and provisions
of the Guaranty cover and pertain to the Loan, Note, Deed of
Trust and other Security Documents as modified hereby;
(iv) acknowledges that there are no claims or offsets against, or
defenses or counterclaims to, the terms and provisions of the
Guaranty or the other obligations created and evidenced by the
Guaranty; (v) certifies that the representations and warranties
contained in the Guaranty remain true and correct representations
and warranties of Guarantor as of the date hereof; and
(vi) acknowledges that Lender has satisfied and performed its
covenants and obligations under the Guaranty and the other
Security Documents, and that no action or failure to act by or on
behalf of, Lender has or will give rise to any cause of action or
other claim against Lender for breach of the Guaranty or other
Security Documents or otherwise.
10. Costs and Expenses. Contemporaneously with the
execution and delivery hereof, Borrower shall pay, or cause to be
paid, all costs and expenses incident to the preparation,
execution and recordation hereof and the consummation of the
transaction contemplated hereby, including, but not limited to,
recording fees, title insurance policy or endorsement premiums or
other charges of the Title Company, and reasonable fees and
expenses of legal counsel to Lender.
11. Additional Documentation. From time to time, Borrower
shall execute or procure and deliver to Lender such other and
further documents and instruments evidencing, securing or
pertaining to the Loan or the Security Documents as shall be
reasonably requested by Lender so as to evidence or effect the
terms and provisions hereof. Upon Lender's request, Borrower
shall cause to be delivered to Lender an opinion of counsel,
satisfactory to Lender as to form, substance and rendering
attorney, opining to (i) the validity and enforceability of this
Agreement and the terms and provisions hereof, and any other
agreement executed in connection with the transaction
contemplated hereby; (ii) the authority of Borrower, and any
constituents of Borrower, to execute, deliver and perform its or
their respective obligations under the Security Documents, as
hereby modified; and (iii) such other matters as reasonably
requested by Lender.
12. Effectiveness of the Security Documents. Except as
expressly modified by the terms and provisions hereof, each of
the terms and provisions of the Security Documents are hereby
ratified and shall remain in full force and effect; provided,
however, that any reference in any of the Security Documents to
the Loan, the amount constituting the Loan, any defined terms, or
to any of the other Security Documents shall be deemed, from and
after the date hereof, to refer to the Loan, the amount
constituting the Loan, defined terms and to such other Security
Documents, as modified hereby.
13. Governing Law. THE TERMS AND PROVISIONS HEREOF SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN.
14. Time. Time is of the essence in the performance of the
covenants contained herein and in the Security Documents.
15. Binding Agreement. This Agreement shall be binding
upon the successors and assigns of the parties hereto; provided,
however, the foregoing shall not be deemed or construed to
(i) permit, sanction, authorize or condone the assignment of all
or any part of the Property or any of Borrower's rights, titles
or interests in and to the Property or any rights, titles or
interests in and to Borrower, except as expressly authorized in
the Security Documents, or (ii) confer any right, title, benefit,
cause of action or remedy upon any person or entity not a party
hereto, which such party would not or did not otherwise possess.
16. Headings. The section headings hereof are inserted for
convenience of reference only and shall in no way alter, amend,
define or be used in the construction or interpretation of the
text of such section.
17. Construction. Whenever the context hereof so requires,
reference to the singular shall include the plural and likewise,
the plural shall include the singular; words denoting gender
shall be construed to mean the masculine, feminine or neuter, as
appropriate; and specific enumeration shall not exclude the
general, but shall be construed as cumulative of the general
recitation.
18. Severability. If any clause or provision of this
Agreement is or should ever be held to be illegal, invalid or
unenforceable under any present or future law applicable to the
terms hereof, then and in that event, it is the intention of the
parties hereto that the remainder of this Agreement shall not be
affected thereby, and that in lieu of each such clause or
provision of this Agreement that is illegal, invalid or
unenforceable, such clause or provision shall be judicially
construed and interpreted to be as similar in substance and
content to such illegal, invalid or unenforceable clause or
provision, as the context thereof would reasonably suggest, so as
to thereafter be legal, valid and enforceable.
19. Counterparts. To facilitate execution, this Agreement
may be executed in as many counterparts as may be convenient or
required. It shall not be necessary that the signature and
acknowledgment of, or on behalf of, each party, or that the
signature and acknowledgment of all persons required to bind any
party, appear on each counterpart. All counterparts shall
collectively constitute a single instrument. It shall not be
necessary in making proof of this Agreement to produce or account
for more than a single counterpart containing the respective
signatures and acknowledgment of, or on behalf of, each of the
parties hereto. Any signature and acknowledgment page to any
counterpart may be detached from such counterpart without
impairing the legal effect of the signatures and acknowledgments
thereon and thereafter attached to another counterpart identical
thereto except having attached to it additional signature and
acknowledgment pages.
20. THIS MODIFICATION AND THE OTHER LOAN DOCUMENTS EMBODY
THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND THERETO
AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO
OR THERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES
HERETO OR THERETO. THE PROVISIONS OF THIS MODIFICATION AND THE
OTHER LOAN DOCUMENTS MAY BE AMENDED OR WAIVED ONLY BY AN
INSTRUMENT IN WRITING SIGNED BY THE RESPECTIVE PARTIES TO SUCH
DOCUMENTS.
LENDER:
COMERICA BANK-TEXAS,
a state banking association
By:
Name:
Title:
BORROWER:
STRATUS 7000 WEST JOINT VENTURE,
a Texas joint venture
By: Stratus 7000 West, Ltd.,
a Texas limited partnership,
Its Operating Partner
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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
Title: Chairman of the Board,
President and Chief
Executive Officer
By: Oly Lantana, L.P.,
a Texas limited partnership,
Its Financial Partner
By: Oly Lantana GP, L.L.C.,
a Texas limited liability company,
Its Sole General Partner
By:
Name:
Title:
GUARANTOR:
STRATUS PROPERTIES INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
Title: Chairman of the Board, President
and Chief Executive Officer
STATE OF TEXAS
&
COUNTY OF _________ &
This instrument was ACKNOWLEDGED before me, on the _____ day
of March, 2000, by ________________________________, the
__________________ of COMERICA BANK-TEXAS, a state banking
association, on behalf of said banking association.
[ S E A L ]
Notary Public, State of Texas
My Commission Expires:
_____________________ Printed Name of Notary Public
THE STATE OF TEXAS &
&
COUNTY OF __________ &
This instrument was acknowledged before me on day
of , 2000, by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III,
Chairman of the Board, President and Chief Executive Officer of
STRATUS PROPERTIES INC., a Delaware corporation, the Sole Member
of STRS L.L.C., a Delaware limited liability company, the General
Partner of STRATUS 7000 WEST, LTD., a Texas limited partnership,
the Operating Partner of STRATUS 7000 WEST JOINT VENTURE, a Texas
joint venture, on behalf of each said entity.
[SEAL]
Notary Public, State of Texas
My Commission Expires:
______________________
Printed Name of Notary Public:
STATE OF TEXAS &
&
COUNTY OF _________ &
This instrument was acknowledged before me on day
of , 2000, by
____________________________, the __________________________ of
OLY LANTANA GP, L.L.C., a Texas limited liability company, the
Sole General Partner of OLY LANTANA, L.P., a Texas limited
partnership, the Financial Partner of STRATUS 7000 WEST JOINT
VENTURE, a Texas joint venture, on behalf of each said entity.
[ S E A L ]
Notary Public, State of Texas
My Commission Expires:
_____________________ Printed Name of Notary Public
STATE OF TEXAS &
&
COUNTY OF _________ &
This instrument was acknowledged before me on day
of , 2000, by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III,
Chairman of the Board, President and Chief Executive Officer of
STRATUS PROPERTIES INC., a Delaware corporation, on behalf of
said corporation.
[ S E A L ]
Notary Public, State of Texas
My Commission Expires:
_____________________ Printed Name of Notary Public
