FIRST
AMENDMENT TO GENERAL PARTNERSHIP AGREEMENT
OF
OLY WALDEN GENERAL PARTNERSHIP
THIS FIRST AMENDMENT TO GENERAL PARTNERSHIP AGREEMENT OF OLY
WALDEN GENERAL PARTNERSHIP (this "Amendment") is entered into this 30th day
of September, 1998 by and among Oly/Houston Walden, L.P., a Texas limited
partner ("Olympus"), Oly/FM Walden, L.P., a Texas limited partnership
("FM") and Stratus Ventures I Walden, L.P., a Texas limited partnership
("Stratus").
W I T N E S S E T H
WHEREAS, Oly Walden General Partnership, a Texas general
partnership (the "Partnership") was formed on April 8, 1998, pursuant to
that certain General Partnership Agreement of Oly Walden General
Partnership (the "Partnership Agreement"), with Olympus as the initial
Financial Partner and FM as the initial Operating Partner.
WHEREAS, pursuant to that certain Assignment of Partnership
Interest dated of even date herewith, FM assigned its partnership interest
in the Partnership to Stratus.
WHEREAS, Olympus, FM and Stratus desire to amend the Partnership
Agreement in certain respects.
NOW, THEREFORE, Olympus, FM and Stratus hereby agree as follows:
1. Consent. Olympus hereby consents to (i) the assignment by FM to
Stratus of FM's interests in the Partnership, and acknowledges the
withdrawal of FM from the Partnership. Olympus hereby acknowledges and
agrees that from and after the date hereof, Stratus shall be deemed to be a
partner of the Partnership. In connection therewith, Stratus hereby
assumes all of the obligations of FM under the Partnership Agreement and is
hereby entitled to all of the rights and benefits of FM under the
Partnership Agreement. Effective from the date hereof, (i) all references
in the Partnership Agreement to "FM" shall become "Stratus" and (ii) all
references to "Partner" or "Partners" in the Partnership Agreement shall be
deemed to include Stratus instead of FM.
2. Definitions. The following terms hereby replace or are hereby
inserted as definitions in Section 1.1 of the Partnership Agreement:
"Development Loan Agreement" shall mean that certain
Development Loan Agreement dated September 30, 1998, by and
between Oly Walden General Partnership and Bank One, Texas,
National Association.
"Escrow Deposit" shall have the meaning set forth in the
Development Loan Agreement.
"Operating Partner" shall mean Stratus Ventures I Walden,
L.P., a Texas limited partnership, together with its successors
or assigns.
3. Escrow Deposit. The following is hereby inserted as the new
Section 3.3 of the Partnership Agreement and the current Section
3.3 and 3.4 are renumbered Section 3.4 and 3.5, respectively:
3.3 Escrow Deposit. Pursuant to the Development Loan
Agreement, the Escrow Deposit was delivered by an affiliate of
the Operating Partner (the "Guarantor") on behalf of the
Partnership to Bank One, Texas. In consideration of the payment
of the Escrow Deposit by the Guarantor, the Partnership agrees to
pay to the Guarantor an amount equal to twelve percent (12%) per
annum, minus the interest accruing on the outstanding portion of
the Escrow Deposit compounded at the rate of return on the Escrow
Deposit held by Bank One, Texas (the "Interest Spread"), until
the Escrow Deposit has been released or applied to the loan
evidenced by the Development Loan Agreement. In the event the
Escrow Deposit is applied to the loan evidenced in part by the
Development Loan Agreement, the Financial Partner shall elect to
call a Mandatory Additional Contribution in an amount necessary
to reimburse the Guarantor for the portion of the Escrow Deposit
and the Interest Spread which has not been paid by the
Partnership to the Guarantor.
4. Distributions. Section 6.1 of the Partnership Agreement is
hereby deleted in its entirety and the following is inserted in
its place:
6.1 Distributions. No later than thirty (30) days after
the end of each Distribution Period during which the Partnership
has Cash Flow, such Cash Flow shall be distributed as set forth
below and in the order of priority as set forth below.
(i) First, to the payment of debt pursuant to the terms of the Development
Loan Agreement; then
(ii) Second, to the payment of the Escrow Deposit and the Interest Spread.
Then, the Partnership shall receive 78.4314% of all Cash Flow until
the special distribution interest to be paid to Richard A. Gray, Jr.
pursuant to that certain Profits Participation letter agreement dated
April 9, 1998 has been paid in full, at which time the Partnership
shall receive 98.0392% of all Cash Flow, to be distributed as set
forth below and in the order of priority as set forth below.
(iii) Third, to the payment of the Mezzanine Financing pursuant to the
terms of the Mezzanine Loan Agreement; then
(iv) Fourth, to the payment of the Preferred Return on the Unreturned
Capital of each Partner in proportion to each Partner's Capital
Contribution; then
(v) Fifth, to the return, pari passu of the Capital Contributions to each
Partner; then
(vi) Sixth, to each Partner in proportion to the Sharing Ratios.
Notwithstanding anything to the contrary contained in this Section
6.1, the extent there is available Cash Flow, the Partners agree to
make distributions to the Financial Partner in the amount of its
federal income tax liability; provided, however, before any future
distributions of Cas h Flow are made for items (iii) through (vi)
above, the Operating Partner shall receive a proportionate
distribution based on the Sharing Ratio.
5. Release from Liability Under the Buy/Sell. The following is
hereby inserted to the end of Section 7.3(f) of the Partnership
Agreement:
Notwithstanding anything to contrary contained in this Agreement, in
the event the closing of the Buy/Sell transaction occurs, at such
closing the Escrow Deposit shall be paid in full by the Partnership.
6. Confirmation of the Partnership Agreement. Except as modified by
this Amendment, the Partnership Agreement is hereby confirmed.
7. Counterparts. This Amendment may be executed in several
counterparts, all of which, when taken together, shall constitute one
and the same agreement. An executed copy of this Amendment
transmitted by telecopy shall be sufficient as an original for all
purposes.
8. Captions. The captions preceding the various provisions of this
Amendment have been inserted solely for convenience of reference and
shall not be used in construing this Amendment.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Olympus and FM have executed this
Amendment the day and year first set forth above.
OLYMPUS:
OLY/HOUSTON WALDEN, L.P.,
a Texas limited partnership
By: Oly PF Village GP, LLC,
a Texas limited liability company,
its sole general partner
By:/s/ Hal R. Hall
---------------
Name:Hal R. Hall
Title:Vice President
FM:
OLY/FM WALDEN, 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
STRATUS:
:
STRATUS VENTURES I WALDEN, L.P.,
a Texas limited partnership
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
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William H. Armstrong, III
President and CEO