Exhibit 10.14
When recorded, return to:
Lynda Zimmerman, Esq.
Winstead Sechrest & Minick
5400 Renaissance Tower
1201 Elm Street
Dallas, Texas 752701
MODIFICATION AGREEMENT
This MODIFICATION AGREEMENT ("Agreement") is made as of the
16th day of August, 1999, 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 "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 (the "Deed of Trust") dated of
even date with the Note to Gary W. Orr, as trustee ("Trustee"),
for the benefit of the Lender, recorded under Document No.
1999009453 of the Official Records of Travis 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 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 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 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 Note, insuring the dignity and
priority of the lien created and evidenced by the Deed of Trust
and the Assignment; and
WHEREAS, the Borrower caused Stratus Properties, Inc., the
Guarantor to execute and deliver to Lender that certain Guaranty
("Guaranty") dated of even date with the Note guaranteeing
certain payment obligations under the Note and certain other
monetary obligations contained in the Security Documents and
performance by Borrower of certain other obligations as set forth
in the Security Documents subject to and on the terms and
conditions set forth in the Guaranty; and
WHEREAS, the Lender, Borrower and Guarantor now propose to
modify certain of the terms and provisions of the Loan Agreement,
the Assignment, the Note, the Deed of Trust 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. Disposition. Borrower and Lender hereby agree that the
definition of "Disposition" as contained in the Loan Agreement
and as contained in the Deed of Trust shall be amended and
modified by adding to said definition the following underlined
additional language to be inserted in the Loan Agreement and the
Deed of Trust:
"Disposition: Any sale, lease (except as
permitted under this Deed of Trust), exchange,
assignment, conveyance, transfer, trade, or other
disposition of all or any portion of the Mortgaged
Property (or any interest therein) or all or any part
of the beneficial ownership interest in Grantor (if
Grantor is a corporation, partnership, general
partnership, limited partnership, joint venture, trust,
or other type of business association or legal entity);
provided, however, a sale of the publicly traded stock
of Stratus Properties, Inc. shall not constitute a
Disposition under the terms of this Deed of Trust; and,
further provided, notwithstanding anything to the
contrary contained herein or in any of the other Loan
Documents, Oly Lantana, L.P., a joint venturer of
Grantor ("Oly Lantana") may, after written notice to
but without the requirement of Beneficiary's consent,
transfer all or any portion of its joint venture
interest in Grantor or all or any portion of its
interest in any constituent entity of Oly Lantana to
any entity or individual that is now or is in the
future an affiliate or partner in Hicks Muse Tate and
Furst, Inc., Olympus Real Estate Corporation or Olympus
Real Estate Fund II, LP; PROVIDED, HOWEVER, in no event
shall Stratus 7000 West, Ltd., the other joint venturer
of Grantor, and the entities which comprise
Stratus 7000 West, Ltd. (collectively, "Stratus")
(i) be entitled to transfer any interest in
Stratus 7000 West, Ltd. or in any Stratus constituent
entity without the prior written consent of Beneficiary
and FURTHER PROVIDED that (ii) Stratus shall be
obligated to, at all times during the term of this
Loan, remain in charge of the day-to-day management of
the Grantor; EXCEPT, HOWEVER, Oly Lantana shall be
entitled to exercise its right to remove Stratus as
Operating Partner of Grantor in accordance with
Section 4.1 of the Amended and Restated Joint Venture
Agreement between Oly Lantana and Stratus 7000 West,
Ltd. dated August __, 1999, PROVIDED: (i) Oly Lantana
has first given written notice to Lender at least five
(5) business days in advance of such removal and the
reason for said proposed removal, together with Oly
Lantana's proposed additional collateral, cash deposit
or guaranty of the Loan (the "Proposed Collateral"),
which Proposed Collateral must be satisfactory to
Lender in its sole discretion; and thereafter either
(ii) within ten (10) business days of receipt of
Lender's approval of said Proposed Collateral, has
furnished to Lender such Proposed Collateral; or
(iii) within ten (10) business days of receipt of
Lender's disapproval of the Proposed Collateral has
paid off the Loan in full."
2. Limitation of Liability. The Note shall be amended and
modified by adding the following additional paragraph to the
Note:
"5.8 Limitation of Liability of Oly Lower Tier
Borrower Partners. Maker and Payee agree that (x) all
of the following entities are fully liable for the
indebtedness evidenced by this Note (the
"Indebtedness"), all sums to accrue or to become
payable thereon, all amounts covenanted to be paid
under the Loan Documents and all covenants and
agreements under the Loan Documents: (i) Maker and its
two (2) joint venturers, Stratus 7000 West, Ltd. and
Oly Lantana, L.P. (the "Joint Venturers"), (ii) the
General Partners of the Joint Venturers, and (iii) to
the extent any lower tier entities of Stratus 7000
West, Ltd. otherwise have personal liability under the
terms of this Note, said lower tier entities of Stratus
7000 West, Ltd.; (y) Stratus Properties, Inc. (the
"Guarantor") is liable for the Guaranteed Obligations
(as defined in the Guaranty) to the extent set forth in
the Guaranty of even date herewith executed by
Guarantor in favor of Payee; and (z) Stratus Properties
Operating Co., an entity owned 99.9% by Guarantor, the
Assignor under that certain Assignment of Accounts
Receivable executed of even date herewith given by
Assignor as additional collateral for the Indebtedness,
has absolutely assigned the accounts receivable
described therein to Payee and said Assignment is not
modified by the terms of this Paragraph 5.9. However,
any liability of any lower tier entity which has an
ownership interest in Oly Lantana, L.P., one of the
Joint Venturers, (the "Oly Lower Tier Borrower
Parties") under this Note, or any other Loan Documents
shall be enforced only against the collateral now or
hereafter given to secure the Indebtedness and not
against any other assets, properties or funds of any
Oly Lower Tier Borrower Parties; EXCEPT, HOWEVER, to
the extent that the Indebtedness, together with all
sums due and owing to Payee under the Loan Documents,
is not fully satisfied in the manner required by the
Loan Documents, following an uncured Event of Default,
the Oly Lower Tier Borrower Parties shall be personally
liable for all amounts of money paid, loaned or
distributed to the Oly Lower Tier Borrowing Parties or
affiliates thereof, unless such amounts of money were
paid, loaned or distributed with the express written
consent of Payee.
Nothing herein shall be deemed to be a waiver of any
right which Payee may have under Sections 506(a),
506(b), 1111(b) or any other provision of the United
States Bankruptcy Code, as such sections may be
amended, or corresponding or superseding sections of
the Bankruptcy Amendments and Federal Judgeship Action
of 1984, to file a claim for the full amount due to
Payee under the Loan Documents or to require that all
collateral shall continue to secure the amounts due
under the Loan Documents.
It is specifically acknowledged and agreed that nothing
contained in this Section 5.8 shall be deemed to modify
or limit the liability of Oly Lantana, L.P., or of
Stratus 7000 West, Ltd. or of the General Partner of
either of them or, to the extent any lower tier entity
of Stratus 7000 West, Ltd. has personal liability under
the terms of this Note, of each lower tier entity of
Stratus 7000 West, Ltd."
2. Title Insurance. Contemporaneously with the execution
and delivery hereof, the Borrower shall cause the Title Company
to issue with respect to the Policy, the standard Texas Form T-38
Endorsement pursuant to Rule P-9b(3) of the Basic Manual of
Rules, Rates and Forms for the Writing of Title Insurance in the
State of Texas ("Title Manual").
3. 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 Note as modified hereby;
(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 of Borrower and 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, or in the
future possesses, 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.
4. 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.
5. Joinder of Guarantor. By its execution hereof ,
Guarantor hereby (i) acknowledges and consents to the terms and
provisions hereof; (ii) specifically acknowledges that the
Limitation of Liability of Oly Lower Tier Borrower Partners shall
in no manner limit or modify the Guaranteed Obligations of
Guarantor under the Guaranty or the obligations of Stratus 7000
West, Ltd. or of any lower tier entity which has an ownership
interest in Stratus 7000 West, Ltd. (iii) ratifies and confirms
the Guaranty, including all interest and costs of collection, to
or for the benefit of Lender; (iv) 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;
(v) 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; (vi) 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
(vii) 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.
6. 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.
7. 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.
8. 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.
9. 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.
10. Time. Time is of the essence in the performance of the
covenants contained herein and in the Security Documents.
11. 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 by the terms of this Agreement, 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.
12. 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.
13. 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.
14. 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.
15. 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.
16. Final Agreement. 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.
17. Notices. All notices or other communications required
or permitted to be given pursuant hereto shall be in writing and
shall be deemed properly given if (i) mailed by first class
United States mail, postage prepaid, registered or certified with
return receipt requested, (ii) by delivering same in person to
the intended addressee, or (iii) by delivery to an independent
third party commercial delivery service for same day or next day
delivery and providing for evidence of receipt at the office of
the intended addressee. Notice so mailed shall be effective upon
its deposit with the United States Postal Service or any
successor thereto; notice sent by such a commercial delivery
service shall be effective upon delivery to such commercial
delivery service; notice given by personal delivery shall be
effective only if and when received by the addressee; and notice
given by other means shall be effective only if and when received
at the designated address of the intended addressee. Either
party shall have the right to change its address for notice
hereunder to any other location within the continental United
States by the giving of thirty (30) days notice to the other
party in the manner set forth herein. For purposes of such
notices, the addresses of the parties shall be as follows:
Payee: Comerica Bank-Texas
1601 Elm Street, 2nd Floor
Dallas, Texas 75201
Attn: National Real Estate Services
Maker: Stratus 7000 West Joint Venture
98 San Jacinto Boulevard
Suite 220
Austin, Texas 78701
Attn: William H. Armstrong, III
and to: Oly Lantana, L.P.
200 Crescent Court
Suite 1650
Dallas, Texas 75201
Attn: Legal Department
Guarantor: Stratus Properties, Inc.
98 San Jacinto Boulevard
Suite 220
Austin, Texas 78701
Attn: William H. Armstrong, III
With a copy to: Armbrust Brown & Davis, L.L.P.
100 Congress Avenue
Suite 1300
Austin, Texas 78701
Attention: Kenneth Jones, Esq.
and to: Locke Liddell & Sapp LLP
700 Lavaca
Suite 800
Austin, Texas 78701
Attention: Brad Hawley, Esq.
EXECUTED as of the date first above written.
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/ William H. Armstrong, III
------------------------------------
Name: William H. Armstrong, III
Title: 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:
Name:
Title:
STATE OF TEXAS &
&
COUNTY OF _________ &
This instrument was ACKNOWLEDGED before me, on the _____ day
of _____________, 1999, 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
STATE OF TEXAS &
&
COUNTY OF _________ &
This instrument was ACKNOWLEDGED before me, on the _____ day
of _____________, 1999, by ________________________________, the
________________________ of STRATUS PROPERTIES, INC., a Delaware
corporation and the Sole Member of STRS L.L.C., a Delaware
limited liability company and the General Partner of STRATUS 7000
WEST, LTD., a Texas limited partnership and Operating Partner of
STRATUS 7000 WEST JOINT VENTURE, a Texas joint venture, on behalf
of each of said entities.
[ 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 the _____ day
of _____________, 1999, by ________________________________, the
________________________ of OLY LANTANA GP, L.L.C., a Texas
limited liability company and the Sole General Partner of OLY
LANTANA, L.P., a Texas limited partnership, on behalf of each of
said entities.
[ 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 the _____ day
of _____________, 1999, by ________________________________, the
__________________ 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