Exhibit 10.13
MEZZANINE LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement") is dated as of September 30,
1998 and is by and between Oly Stratus ABC West I Joint Venture, a Texas
joint venture ("Borrower") and Oly Lender Stratus, L.P., a Texas limited
partnership ("Lender").
RECITALS
A. WHEREAS, Borrower was formed to acquire and develop certain real
property in Travis County, Texas commonly known as ABC West I (the
"Property") pursuant to that certain Agreement of Sale and Purchase (ABC
West Phase 1; 75 Lots) between Stratus Properties Operating Co. and Oly
Stratus ABC West I Joint Venture dated of even date herewith (the "Purchase
Agreement").
B. WHEREAS, Borrower desires to borrow from Lender, and Lender
agrees to loan to Borrower, the amounts described below.
NOW THEREFORE, in consideration of the premises and the mutual
covenants set forth herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1. Defined Terms. The following capitalized terms generally used in
this Agreement shall have the meanings defined or referenced below.
Certain other capitalized terms used only in specific sections of this
Agreement are defined in such sections.
(a) "Affiliated" or "Affiliate" means, with respect to any
Person, (i) any other Person directly or indirectly controlling,
controlled by, or under common control with such Person, or (ii) any
other Person owning or controlling 10% or more of the outstanding
voting interests of such Person, or (iii) any officer, director,
general partner or managing member of such Person, or (iv) any other
Person which is an officer, director, general partner, managing member
or holder of 10% or more of the voting interests of any other Person
described in clauses (i) through (iii) of this definition. The term
"control" as used herein (including the terms "controlling,"
"controlled by" and "under common control with") means the possession,
direct or indirect, of the power (a) to vote 10% or more of the
outstanding voting securities of such person or entity; or (b) to
otherwise direct management policies of such person or entity by
contract or otherwise.
(b) "Agreement" shall mean this Loan Agreement as described in
the preamble.
(c) "Bankruptcy Code" means Title 11 of the United States Code
as amended from time to time, and any state law relating to creditor's
rights, reorganization or insolvency generally.
(d) "Borrower" shall have the meaning set forth in the preamble
hereto.
(e) "Borrower Joint Venture Agreement" means that Joint Venture
Agreement of Borrower of even date herewith, as the same may be
amended from time to time with the prior consent of the Lender.
(f) "Business Day" means a day of the week (other than any
Saturday or Sunday) on which banks are not authorized or required to
close in the State of Texas. Unless specifically referenced in this
Agreement as a Business Day, all references to "days" shall be to
calendar days.
(g) "Business Plan" has the meaning ascribed thereto in the
Borrower Joint Venture Agreement.
(h) "Claims" shall have the meaning set forth in Section 8.1.
(i) "Closing Date" means the Closing Date under the Purchase
Agreement.
(j) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(k) "Default" has the meaning set forth in Section 7.1.
(l) "Lender" shall have the meaning set forth in the preamble.
(m) "Loan" shall have the meaning set forth in Section 2.1.
(n) "Loan Amount" shall have the meaning set forth in 2.1.
(o) "Loan Documents" means the Notes and any documents
pertaining to Lender's rights thereunder.
(p) "Management Committee" means the Management Committee of
Borrower.
(q) "Maturity Date" means September 29, 2001.
(r) "Notes" shall have the meaning set forth in Section 2.1.
(s) "Person" means any individual, partnership, corporation,
limited liability company, limited liability partnership, trust or
other entity.
(t) "Potential Default" means any event, condition, omission or
circumstance that, with the giving of notice or the lapse of time, or
both, would constitute a "Default" hereunder or under any of the Loan
Documents.
(u) "Property" means the property purchased pursuant to the
Purchase Agreement.
(v) "Purchase Agreement" means that certain agreement of
purchase and sale as defined in the recitals.
ARTICLE II
LOANS
2.1. Loans. On the date hereof, Lender shall make a loan (the "Loan")
to the Borrower in an amount equal to ONE MILLION ONE HUNDRED FIFTY
THREE THOUSAND TWO HUNDRED FIFTY AND NO/100 DOLLARS ($1,153,250). The Loan
shall be evidenced by two Promissory Notes (the "Notes") in the form of
that attached hereto as Exhibit A, and each Note shall bear interest at the
rate of fifteen percent per annum (15%). The Loan shall be funded by wire
transfer to accounts designated by the Management Committee.
2.2. Interest; Payments. Interest on the Loan shall accrue upon the
outstanding principal balance thereof at the rate and in the amounts
provided therein, and such interest shall be payable as required therein.
Interest on the Loan shall be computed on the basis of actual days elapsed
in a year of 360 days (including the first day but excluding the last day)
occurring in the period for which payable.
2.3. Optional Prepayments. Borrower may at any time pay the full
amount or any part of the Loan without the payment of any premium or fee.
2.4. No Revolving Loan. The Loan is not a revolving loan, and amounts
repaid from time to time may not be reborrowed.
2.5. Repayment of Principal; Maturity Date. Any principal amount of
the Loan outstanding at the Maturity Date shall be repaid on the Maturity
Date. On the Maturity Date, the Loan shall mature and all sums due and
owing under this Agreement and the other Loan Documents, to the extent the
same have not previously become due, shall be payable in full. All
payments due to Lender under this Agreement, whether at the Maturity Date
or otherwise, shall be paid in immediately available funds.
2.6. Late Payments. If any amount required to be paid to Lender under
any Loan Document shall not be paid on the date it is due (taking into
account any applicable grace period), Borrower shall pay to Lender, in
addition to all other amounts payable hereunder or under the Notes, a late
fee equal to four percent (4%) of the delinquent amount.
2.7. Payments on Non-Business Days; Calculations. If any payment to
be made under any Loan Document shall be stated to be due on a day which is
not a Business Day, then the date for payment thereof shall be extended to
the next following Business Day.
2.8. Use of Proceeds. The proceeds of the Loan shall be used solely
to pay the cost of Borrower's acquisition of the Property and the other
costs of development of the Property. Lender shall have no responsibility
with respect to the use of any proceeds of the Loan.
ARTICLE III
CONDITIONS PRECEDENT TO CLOSING
3.1. Conditions Precedent to Closing. Lender's obligation to make any
disbursements or take any other action under the Loan Documents shall be
subject at all times to satisfaction or waiver, in Lender's sole and
absolute discretion, of each of the following conditions precedent on or
prior to the date of any loan hereunder.
(a) Acquisition. Borrower shall have acquired the Property
pursuant to the terms of the Purchase Agreement.
(b) Compliance. Each of the representations and warranties
contained in Article 4hereof shall be true and correct on and as of
such date, and no Default or Potential Default shall exist.
(c) Loan Documents. Borrower shall have delivered to Lender all
Loan Documents pertaining to the Loan and all other documents,
instruments, and forms of evidence or other materials requested by
Lender under the terms of this Agreement or any of the other Loan
Documents, in form and substance satisfactory to Lender in its sole
and absolute discretion, duly executed by Borrower and each other
party thereto (other than Lender).
(d) Initial Equity. Lender shall have received evidence
satisfactory to it that Borrower has received the initial capital
contribution pursuant to Borrower's Joint Venture Agreement.
(e) Other Documents. Lender shall have received such other
documents, instruments, agreements, certificates, forms of evidence
and other materials relating to the transactions contemplated hereby
as Lender may reasonably require.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
As a material inducement to Lender's entry into this Agreement,
Borrower represents and warrants to Lender as of the date hereof and
continuing thereafter that:
4.1. Organization, Powers and Good Standing. Borrower (i) is duly
organized as a joint venture under the laws of the Sate of Texas, (ii) is
validly existing in good standing under the laws of the State of Texas and
(iii) has all requisite organizational power and authority and the legal
right to own and operate its properties, to carry on its business as
heretofore conducted and as proposed to be conducted, to enter into the
Loan Documents to which it is or may become a party and to carry out the
transactions contemplated thereby. Borrower possesses all governmental
approvals, in full force and effect, that are necessary for the ownership,
maintenance and operation of its properties and conduct of its business as
now conducted and proposed to be conducted, and is not in material
violation thereof.
4.2. Authorization, Binding Effect.
(a) The execution, delivery and performance by Borrower of each
Loan Document to which it is or may be a party have been duly
authorized by all necessary corporate, limited liability company or
other organizational action on the part of Borrower.
(b) Each Loan Document to which Borrower is a party has been
duly executed and delivered by Borrower.
(c) Each Loan Document to which Borrower is a party is the
legal, valid and binding obligation of Borrower, enforceable against
it in accordance with its terms.
4.3. No Conflict. The execution, delivery and performance by Borrower
of each Loan Document to which it is party, and the consummation of the
transactions contemplated thereby, do not and will not (i) violate any
provision of the charter or other organizational documents of Borrower,
(ii) conflict with, result in a breach of or constitute (or, with the
giving of notice or lapse of time or both, would constitute) a default
under, or except for consents that have been obtained and are in full force
and effect, require the approval or consent of any Person pursuant to, any
Contractual Obligation of Borrower, (iii) violate any applicable law
binding on Borrower or (iv) result in the creation or imposition of any
lien upon any asset of Borrower.
4.4. Agreements, Applicable Law. Borrower is not in violation of any
applicable law and is not in material default under any contractual
obligations to which it is a party or by which its property is bound.
4.5. Indebtedness. Except for indebtedness to Lender hereunder,
amounts payable under debt secured by the Property or trade debt and any
other indebtedness approved in writing by the Lender, Borrower does not
have and will not have any indebtedness of any kind or nature whatsoever.
4.6. No Defaults. No Default or Potential Default has occurred and is
continuing.
4.7. Formation and Organizational Documents. Borrower has delivered
to Lender all formation and organizational documents of Borrower, and all
such formation and organizational documents remain in full force and effect
and as of the date hereof have not been amended or modified since they were
delivered to Lender.
4.8. No Subordination. Except as provided herein, there is no
agreement, indenture, contract or instrument to which Borrower is subject
or by which Borrower may be bound that requires the subordination in right
of payment of any of Borrower's obligations under this Agreement or the
Notes to any other obligation of Borrower.
4.9. Permits; Franchises. Borrower possesses all permits,
memberships, franchises, contracts and licenses required and all trademark
rights, trade names, trade name rights, patents, patent rights and
fictitious name rights necessary to enable it to conduct the business in
which it is now engaged without conflict with the rights of others.
ARTICLE V
COVENANTS OF BORROWER
Borrower covenants that until the Loan has been fully discharged:
5.1. Records and Inspection. Borrower shall maintain adequate books,
records and accounts as may be required or necessary to permit the
preparation of financial statements in accordance with sound business
practices. Borrower shall permit such Persons as Lender may designate, at
reasonable times and as often as may be reasonably requested, under
reasonable circumstances, to (i) visit and inspect the Property, (ii)
inspect and copy Borrower's books and records and (iii) discuss with its
officers and employees and its independent accountants, its business,
assets, liabilities, prospects, results of operation or financial
condition; provided, however, that Lender shall make reasonable efforts to
avoid disruption of the tenants at the Property during any such inspection.
Borrower acknowledges that Lender's inspection of such books, records and
accounts once in each sixty (60) day period shall be presumed to be
reasonable under the foregoing provision of this Agreement.
5.2. Corporate Existence, Etc.Borrower shall, at all times preserve
and keep in full force and effect its company, corporate or partnership
existence and all material rights and franchises.
5.3. Payment of Taxes. Borrower shall pay and discharge all taxes
imposed upon it or any of its properties or in respect of any of its
franchises, business, income or property before any penalty shall be
incurred with respect to such Taxes.
5.4. Conduct of Business. Borrower shall conduct its business in
compliance in all material respects with all applicable laws and all of its
contractual obligations.
5.5. Expenses. Borrower shall immediately pay Lender upon demand all
reasonable costs and expenses incurred by Lender in connection with (i) the
preparation of this Agreement and all other Loan Documents contemplated
hereby, (ii) the administration of this Agreement and the other Loan
Documents for the term of the Loan and (iii) the enforcement or
satisfaction by Lender of any of Borrower's obligations under this
Agreement and the Other Loan Documents.
5.6. Business Plan. Borrower shall, from time to time, submit to
Lender a true and correct copy of the Business Plan, including a copy of
such operating budgets within ten Business Days following any amendment
thereof.
5.7. ERISA Compliance. Borrower shall at all times comply with the
provisions of ERISA with respect to any retirement or other employee
benefit plan to which it is a party as employer, and as soon as possible
after Borrower knows, or has reason to know, that any Reportable Event (as
defined in ERISA) with respect to any such plan of Borrower has occurred,
it shall furnish to Lender a written statement setting forth details as to
such Reportable Event and the action, if any, which Borrower proposes to
take with respect thereto, together with a copy of the notice of such
Reportable Event furnished to the Pension Benefit Guaranty Corporation.
5.8. Taxes. Borrower shall pay and discharge when due any and all
taxes, both real and personal, owed by or relating to Borrower and
Borrower's properties (including federal and state income taxes), except
such as Borrower may in good faith contest or as to which a bona fide
dispute may arise, provided provision is made to the satisfaction of Lender
for eventual payment thereof in the event that it is found in a final, non-
appealable judgment that the same is an obligation of Borrower.
5.9. Notice. Borrower shall promptly give notice in writing to Lender
of (i) any litigation pending or threatened against Borrower or the
Property, (ii) the occurrence of any Default, (iii) any change in the name
of Borrower and any change in the identity or organizational structure of
Borrower, (iv) as soon as it becomes aware, any uninsured or partially
uninsured material loss of the Property or any material portion thereof or
(v) as soon as it becomes aware, any termination or cancellation of any
insurance policy which Borrower is required herein to maintain.
5.10. Single Purpose Entity. Borrower at all times will continue
to be a duly formed and existing joint venture and a single-purpose entity.
Borrower will continue to comply with the provisions of the Borrower Joint
Venture Agreement and the laws of the State of Texas relating to joint
ventures. All customary formalities regarding the existence of Borrower as
a joint venture will continue to be observed. Borrower will continue to
accurately maintain its financial statements, accounting records and other
corporate documents separate from those of any Affiliate of Borrower and
any other Person.
ARTICLE VI
NEGATIVE COVENANTS
Borrower covenants that until all of the Loan have been fully
discharged:
6.1. Debt. Borrower shall not, directly or indirectly, create, incur,
assume, guarantee or otherwise become or remain liable with respect to, any
material indebtedness other than indebtedness described in Section 4.5
hereof.
6.2. Restriction on Fundamental Changes. Borrower shall not, directly
or indirectly, enter into any merger, consolidation, reorganization or
recapitalization, liquidate, wind up or dissolution without the written
consent of Lender.
6.3. Distributions to Members. Except as provided herein, no
distribution shall be made to the partners of Borrower, whether under the
Borrower Joint Venture Agreement or otherwise, while any amount remains
outstanding under the Notes.
6.4. Amendments of Certain Documents. Borrower shall not amend its
formation and organizational documents in any respect without obtaining the
prior written consent of each Lender.
6.5. Other Indebtedness; Transfer of Interests. Without the prior
written consent of Lender, and except as otherwise expressly permitted by
this Agreement or the Borrower Joint Venture Agreement, Borrower shall not
create, incur or permit to exist any liabilities resulting from borrowings,
loans or advances, whether secured or unsecured, or any other obligation of
any kind whatsoever, except (i) the liabilities of Borrower to Lender for
money borrowed hereunder and the liabilities of Borrower under the Loan
Documents, (ii) debt secured by a first lien on the Property and
(iii) unsecured trade payables incurred in the ordinary course of business.
Borrower shall not directly or indirectly create, incur, assume or permit
to exist any lien, pledge, encumbrance or other security interest or
preferential arrangement of any kind or nature with respect to the
membership or partnership interests in Borrower.
6.6. Merger, Consolidation, Sale of Assets, Amendments. Borrower
shall not merge into or consolidate with any corporation or other entity,
or sell, lease, assign, transfer or otherwise dispose of all or
substantially all of its assets. Borrower shall not amend or modify any
portion of Borrower's Joint Venture Agreement without Lender's prior
written consent.
6.7. Guarantees. Without the prior written consent of Lender,
Borrower shall not guarantee or become liable in any way as a surety,
endorser (other than as endorser of negotiable instruments in the ordinary
course of business) or accommodation endorser or otherwise for debt or
obligations of any other person or entity.
6.8. No Sale, Transfer, Liens, Etc. Without the prior written consent
of Lender and except as otherwise expressly permitted by this Agreement,
Borrower's Joint Venture Agreement, the Business Plan or in the ordinary
course of business operations of the Borrower's joint venture, Borrower
shall not suffer or permit any disposition or encumbrance of, or lien upon,
the Property or any portion thereof or any interest therein.
6.9. Assignment. Without the prior written consent of Lender,
Borrower shall not assign Borrower's interest under any of the Loan
Documents, or in any monies due or to become due thereunder, and any
assignment without such consent shall be void.
6.10. Compliance with Laws. Borrower shall comply in all material
respects with all laws, ordinances, governmental rules and regulations to
which it is subject, and obtain and keep in force any and all licenses,
permits, franchises, or other governmental authorizations necessary to the
ownership of its assets or to the conduct of its business.
ARTICLE VII
DEFAULTS AND REMEDIES
7.1. Default. The occurrence of any one or more of the following
shall constitute an event of default (hereinafter, "Default") under this
Agreement and the other Loan Documents:
(a) Payment; Performance. (i) Borrower fails to pay as and when
due hereunder or under the Notes or (ii) Borrower fails to pay when
due any other amount due hereunder, under the Notes or any of the
other Loan Documents; provided, however, that Borrower shall not be in
Default if Borrower fails to pay when due any payment that is not
regularly scheduled until ten (10) days after notice from any Lender
of such failure to pay; or
(b) Performance of Obligations. Borrower's failure to perform
any other obligation under any of the Loan Documents (other than those
referred to in Section 7.1(a) above) for a period of ten (10) days
after receipt of written notice of such failure (or, if delivery of
such notice is stayed or prohibited by applicable law, for a period of
ten (10) days after such failure to perform), or, if Borrower is
diligently pursuing cure and Lender's is reasonably satisfied that
such cure can, with reasonable diligence, be completed in an
additional thirty (30) day period, then such initial ten (10) day
period shall be extended for such additional time during which
Borrower shall be diligently pursuing such cure, not to exceed an
additional thirty (30) days; or
(c) Representations and Warranties. The failure of any
representation or warranty of Borrower in any of the Loan Documents to
be true in all material respects on each date made or deemed made; or
(d) Voluntary Bankruptcy; Insolvency; Dissolution. (i) The
filing of a petition by Borrower for relief under the Bankruptcy Code,
or under any other present or future state or federal law regarding
bankruptcy, reorganization or other debtor relief law, (ii) the filing
of any pleading or an answer by Borrower in any involuntary proceeding
under the Bankruptcy Code or other debtor relief law which admits the
jurisdiction of the court or the petition's material allegations
regarding Borrower's insolvency, (iii) a general assignment by
Borrower for the benefit of creditors or (iv) Borrower applying for,
or the appointment of, a receiver, trustee, custodian or liquidator of
Borrower or any of its assets; or
(e) Involuntary Bankruptcy. The failure of Borrower to effect a
full dismissal of any involuntary petition under the Bankruptcy Code
or under any other debtor relief law that is filed against Borrower or
in any way restrains or limits Borrower or Lender regarding the Loan
prior to the earlier of (i) the entry of any court order granting
relief sought in such involuntary petition or (ii) sixty (60) days
after the date of filing of such involuntary petition; or
7.2. Acceleration Upon Default. Upon the occurrence and during the
continuance of a Default specified in Section 7.1(d) or (e), all sums owing
to Lender under the Loan Documents immediately shall be due and payable.
Upon the occurrence and during the continuance of any Default specified in
this Article VII (other than those referred to in the immediately preceding
sentence) Lender may, at their sole option, declare all sums owing to
Lender under the Loan Documents immediately due and payable.
7.3. Disbursements to Third Parties. Upon the occurrence and during
the continuance of a Default occasioned by Borrower's failure to pay money
to a third party as required by this Agreement, Lender may, but shall not
be obligated to, make such payment from the Loan proceeds or other funds of
Lender. If such payment is made from proceeds of the Loan, Borrower shall
immediately deposit with Lender, upon written demand, an amount equal to
such payment. If such payment is made from funds of Lender, Borrower shall
immediately repay such funds upon written demand of Lender. In either
case, the Default with respect to which any such payment has been made by
Lender shall not be deemed cured until such deposit or repayment (as the
case may be) has been made by Borrower to Lender.
7.4. Repayment of Funds Advanced. Any funds expended by Lender in the
exercise of its rights or remedies under this Agreement and the other Loan
Documents shall be payable to Lender upon demand, together with interest at
the rate applicable to the principal balance of the Notes from the date the
funds were expended.
7.5. Rights Cumulative; No Waiver. All of Lender's rights and
remedies provided in this Agreement and the other Loan Documents, together
with those granted by law or at equity, are cumulative and may be exercised
by Lender at any time. Lender's exercise of any right or remedy shall not
constitute a cure of any Default unless all sums then due and payable to
Lender under the Loan Documents are repaid and Borrower has cured all other
Defaults. No waiver shall be implied from any failure of Lender to take,
or any delay by Lender in taking, action concerning any Default or failure
of condition under the Loan Documents, or from any previous waiver of any
similar or unrelated Default or failure of condition. Any waiver or
approval under any of the Loan Documents must be in writing and shall be
limited to its specific terms.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.1. Indemnity. Borrower hereby agrees to defend, indemnify and hold
harmless Lender, and its directors, officers, employees, agents, successors
and assigns from and against any and all losses, damages, liabilities,
claims, actions, judgments, costs and reasonable legal or other expenses
(including, without limitation, reasonable attorneys' fees and expenses)
(collectively, "Claims") such indemnified party may incur as a direct or
indirect consequence of (i) the negotiation, documentation or
administration of the transactions contemplated hereby, (ii) the
transactions contemplated hereby, (iii) the purpose to which Borrower
applies the proceeds of the Loan, (iv) the failure of Borrower to perform
any obligations as and when required by this Agreement or any of the other
Loan Documents, (v) any failure at any time of any of Borrower's
representations or warranties to be true and correct or (vi) any act or
omission by Borrower, or any constituent shareholders/partners/members in
Borrower. Borrower shall immediately pay to Lender upon demand any amounts
owing under this indemnity, together with interest from the date the
indebtedness arises until paid at the rate of interest applicable to the
principal balance of the Notes. BORROWER'S DUTY TO INDEMNIFY LENDER
HEREUNDER SHALL SURVIVE THE REPAYMENT OF THE LOAN WITH RESPECT TO CLAIMS
ARISING PRIOR TO THE REPAYMENT OF THE LOAN IN FULL.
8.2. Form of Documents. The form and substance of all documents,
instruments and forms of evidence to be delivered to Lender under the terms
of this Agreement any of the other Loan Documents shall be subject to
Lender's approval and shall not be modified, superseded or terminated in
any respect without Lender's prior written approval.
8.3. Notices. All notices, demands or other communications under this
Agreement and the other Loan Documents shall be in writing and shall be
delivered via confirmed facsimile, overnight courier, by hand delivery or
by certified mail, return receipt requested, to the appropriate party at
the address set forth on the signature page of this Agreement (subject to
change from time to time by written notice to all other parties to this
Agreement). All communications shall be deemed served upon delivery of, or
if mailed, upon the first to occur of receipt or the expiration of three
(3) days after the deposit in the United States Postal Service mail,
postage prepaid and addressed to the address of Borrower or Lender at the
address specified or, if transmitted via facsimile, upon electronic
confirmation of receipt; provided, however, that non-receipt of any
communication as the result of any change of address or facsimile number of
which the sending party was not notified or as the result of a refusal to
accept delivery shall be deemed receipt of such communication.
8.4. Relationship of Parties. The relationship of Borrower and Lender
under the Loan Documents is, and shall at all times remain, solely that of
Borrower and Lender and not that of partners or joint venturers, and Lender
does not undertake or assume any responsibility or duty to Borrower or to
any third party with respect to the Loan, except as expressly provided in
this Agreement and the other Loan Documents. Borrower hereby irrevocably
waives and disclaims any right, privilege or defense hereunder or under any
of the Loan Documents to the contrary. This Agreement does not constitute
a partnership agreement or any other association between Lender and
Borrower.
8.5. Attorneys' Fees and Expenses; Enforcement. If any attorney is
engaged by Lender to interpret, administer, enforce or defend any provision
of this Agreement or any of the other Loan Documents, or as a consequence
of any Default under the Loan Documents, with or without the filing of any
legal action or proceeding, Borrower shall immediately pay to Lender, upon
demand, the amount of all reasonable attorneys' fees and expenses and all
costs incurred by Lender in connection therewith, together with interest
thereon from the date of such demand until paid at the rate of interest
applicable to the principal balance of the Notes as specified therein.
8.6. Immediately Available Funds. Unless otherwise expressly provided
for in this Agreement, all amounts payable by Borrower to Lender shall be
payable only in United States currency, in immediately available funds.
8.7. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective permitted
successors and permitted assigns.
8.8. Severability. If any provision or obligation under this
Agreement and the other Loan Documents shall be determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable, that
provision shall be deemed severed from the Loan Documents and the validity,
legality and enforceability of the remaining provisions or obligations
shall remain in full force as though the invalid, illegal or unenforceable
provision had never been a part of the Loan Documents; provided, however,
that if the rate of interest or any other amount payable under the Notes or
this Agreement or any other Loan Document, or the right of collectability
therefor, are declared to be or become invalid, illegal or unenforceable,
Lender's obligations to make advances under the Loan Documents shall not be
enforceable by Borrower.
8.9. No Waiver; Successors. No waiver shall be implied from any
failure of Lender to take, or any delay by Lender in taking, action
concerning any default or failure of condition, or from any previous wavier
of any similar or unrelated Default or failure of condition. Any waiver or
approval hereunder must be in writing and shall be limited to its specific
terms. No amendment of any provision of this Agreement or any other Loan
Document (including a waiver thereof or consent relating thereto) shall be
effective unless the same shall be in writing and signed by Borrower and
Lender.
8.10. Time. Time is of the essence of each and every term of this
Agreement.
8.11. Headings. All article, section or other headings appearing
in this Agreement and any of the other Loan Documents are for convenience
of reference only and shall be disregarded in construing this Agreement and
any of the other Loan Documents.
8.12. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State of Texas.
Borrower and all persons and entities in any manner obligated to Lender
under the Loan Documents consent to the jurisdiction of any Federal or
State Court within the State of Texas and also consent to service of proces
by any means authorized by Texas or Federal Law.
8.13. Usury Savings. It is the intention of the parties hereto to
conform strictly to the usury and other laws relating to interest from time
to time in force, and all agreements between Borrower and Lender, whether
now existing or hereafter arising and whether oral or written, are hereby
expressly limited so that in no contingency or event whatsoever, whether by
acceleration or maturity or otherwise, shall the amount paid or agreed to
be paid to Lender, or collected by Lender for the use, forbearance or
detention of the money to be loaned under the Notes, this Agreement or
otherwise, or for the payment or performance of any covenant or obligation
contained herein or in any of the other Loan Documents, exceed the maximum
amount of interest allowable under applicable law (the "Maximum Amount").
If under any circumstances whatsoever fulfillment of any provision hereof
or any other Loan Document, at the time performance of such provision shall
be due, shall involve transcending the Maximum Amount, then ipso facto, the
obligation to be fulfilled shall be reduced to the Maximum Amount. For the
purposes of calculating the actual amount of interest paid or agreed to be
paid to the holder of the Notes for the use, forbearance or detention of
the Loan shall, to the extent permitted by applicable law, be amortized,
allocated and spread from the date of disbursement of the proceeds of the
Loan until payment in full of the Loan, so that the actual rate of interest
on account of the Loan is uniform throughout the term hereof. If under any
circumstances Lender shall ever receive an amount deemed interest by
applicable law, which would exceed the Maximum Amount, such amount that
would be excessive interest under applicable usury laws shall be deemed a
payment in reduction of the principal amount owing under the Notes and
shall be so applied to principal and not to the payment of interest, or if
such excessive interest exceeds the outstanding principal balance of the
Loan, such excessive interest shall be deemed to have been a payment made
by mistake and shall be refunded to Borrower or to any other person making
such payment on Borrower's behalf.
8.14. Revival. To the extent Borrower makes a payment to Lender,
which payment or the proceeds of any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or
required to be repaid to a trustee, receiver or any other party having
requisite authority under the Bankruptcy Code or any bankruptcy law, state
or federal law, common law or equitable cause, then, to the extent of such
payment or proceeds received, the obligation hereunder or part thereof
intended to be satisfied shall be revived and continue in full force and
effect, as if such payment or proceeds had not been received.
8.15. Notes Freely Transferable. The Notes issued hereunder may
be freely transferred by the Lender holding such Notes.
LENDER:
OLY LENDER STRATUS, L.P.,
a Texas limited partnership
By: Oly Fund II GP Investments, L.P.,
a Texas limited partnership,
its general partner
By: Oly Real Estate Partners II, L.P.,
a Texas limited partnership,
its general partner
By: Oly REP II, L.P.,
a Texas limited partnership,
its general partner
By: Oly Fund II, LLC,
a Texas limited liability company,
its general partner
By:/s/ Hal R. Hall
------------------
Name: Hal R. Hall
Title:Vice President
BORROWER:
OOLY STRATUS ABC WEST I JOINT VENTURE,
a Texas joint venture
Financial Partner:
Oly ABC West I, L.P.,
a Texas limited partnership
By: Oly Texas GP II, LLC,
a Texas limited liability company,
its sole general partner
By:/s/ Hal R. Hall
------------------
Name: Hal R. Hall
Title: Vice President
Operating Partner:
Stratus ABC West I, L.P.,
a Texas limited partnership
By: STRS L.L.C.,
a Delaware limited liability company,
General Partner
By: Stratus Properties Inc.,
a Delaware corporation,
its sole member
By:/s/ William H. Armstrong III
-----------------------------
William H. Armstrong III,
President and CEO
EXHIBIT A
Form of Promissory Note
[ATTACHED]