PROMISSORY NOTE

FOR VALUE RECEIVED, CJUF II STRATUS BLOCK 21 LLC , a Delaware limited liability company (“ Maker ”), with a mailing address of c/o Stratus Properties Inc., 98 San Jacinto, Suite 220, Austin, Texas 78701, promises to pay to the order of COR US BANK, N.A. , a national banking association   (“ Lender ”), at the address set forth in Section 4.1(e)   of the Loan Agreement (as defined in Section 7 below), or such other place as Lender may designate in writing, in the manner provided hereinafter the principal sum of up to One Hundred Sixty-Five Million Dollars ($165,000,000), or so much thereof as may now or hereafter be disbursed by Lender to or for the benefit of Maker (the “ Loan ”), on or before the Maturity Date (as defined in the Loan Agreement) or the date to which the indebtedness evidenced hereby is accelerated pursuant to the terms of this Note and the terms of the other Loan Documents, with interest, in the manner and upon the terms and conditions set forth below.  All capitalized terms not expressly defined herein shall have the same meanings as set forth in the Loan Agreement.

1.   Interest Rate .   Interest shall accrue from the date of first disbursement of the Loan on the principal balance thereof remaining from time to time outstanding at the rate (“ Interest Rate ”)   established below.  Unless the Loan is then bearing interest at the Default Rate, the Interest Rate shall be equal to the greater of: (1) the sum of: (i) three and one half percent (3.5%) per annum plus (ii) the three month London Interbank Offered Rate quoted in the Money Rates section of The Wall Street Journal (the “ LIBOR Rate ”); or (2) six percent and one-half percent (6.5%) per annum.  The LIBOR Rate shall be automatically adjusted without notice to Maker on the first (1st) day of each January, April, July, and October following the calendar month in which the Loan Opening Date occurs (the “ Quarterly Adjustment Date ”) based on the LIBOR Rate as of the Quarterly Adjustment Date (or, if the Quarterly Adjustment Date falls on a non-Business Day, then the Interest Rate shall be adjusted based on the LIBOR Rate on the first Business Day following the Quarterly Adjustment Date, effective retroactively to the Quarterly Adjustment Date).  Interest shall be computed based on a 360-day year and charged for the actual number of days elapsed.

2.   Principal and Interest Payments . Commencing on the first day of the first month after the initial disbursement of the Loan, and continuing on the first day of each month thereafter until the Loan has been repaid in full, interest on the Loan shall be payable monthly in arrears on the first day of each month (“ Payment Date ”) in the amount of all interest accrued and unpaid.  The final payment of the entire unpaid principal balance of the Loan plus all accrued and unpaid interest, Exit Fees, charges, fees, and expenses, if not sooner paid, shall be due and payable on the Maturity Date.

3.   Prepayment .   During the twelve (12) months immediately following the execution of this Note (“ Lockout Period ”), Maker shall not be permitted to prepay the Loan in part or in full from any source.  At Lender’s option, any attempted unpermitted prepayment

during the Lockout Period shall be placed in a non-interest bearing account and held until such time as prepayment is allowed.  After the Lockout Period, Maker may prepay the Loan in part or in full (in accordance with the provisions hereof) upon not less than seven (7) days prior written notice to Lender, except that no such notice shall be required in the case of the sale of individual Residential Units.  In the event that Maker repays any portion of the Loan after the 12-month anniversary of this Note but before the 30-month anniversary of this Note from a source other than proceeds realized from the sale of individual Residential Units or of a component of the Project (i.e., the Venue, the Hotel or the Commercial Space), in each case, in accordance with and as permitted by the Loan Documents, then Maker shall pay Lender a prepayment charge (the “ Prepayment Charge ”) equal to (x) in the event of a partial prepayment, two percent (2.0%) of the amount prepaid, or (y) in the event of prepayment in full, the sum of (i) two percent (2.0%) of the amount prepaid and (ii) two percent (2.0%) of any Unfunded Commitment.  The Prepayment Charge shall be in addition to any Exit Fee still outstanding.  There shall be no Prepayment Charge on casualty or condemnation proceeds which Lender requires be applied to the Loan.

4.   Applicability of Charges .   Upon acceleration of the Loan at any time after the date of this Note and prior to the 30-month anniversary of the date of this Note, in addition to the Exit Fee that may be due as provided in the Loan Agreement and to the extent permitted by law, Maker hereby agrees that there shall be added to the indebtedness evidenced hereby and secured by that certain Construction Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing of even date herewith (the “ Deed of Trust ”) a charge equal to the Prepayment Charge (calculated as if the outstanding Loan were being prepaid in full as of  the date of such acceleration, regardless of whether such acceleration would be deemed a “prepayment” under applicable Law).  Maker hereby acknowledges that the aforesaid charge payable to the Lender hereunder is a reasonable pre-estimate of the Lender’s losses and is not a penalty.

5.   Application of Payments .   Subject to the application of payments required by Section 14.10 of the Loan Agreement and other applicable provisions of the Loan Documents, Lender shall have the right unilaterally (and without the consent of Maker) to allocate any and all payments that may be received by or tendered to Lender made by Maker or any other person at any time or from time to time and that relate in any way to the Loan or any other of the obligations then due and payable under the Loan Documents in any order of priority as Lender in its sole and exclusive discretion shall elect, including without limitation to: (i) to the payment of any costs and expenses of Lender that Maker is responsible for under the Loan Documents; (ii) to accrued but unpaid interest, Exit Fees, penalties, late payment fees; and (iii) to principal.  Maker (1) irrevocably waives the right to direct the application of payments and collections received by Lender from or on behalf of Maker and/or any other person, and (2) agrees that Lender shall have the continuing exclusive right to apply and reapply any and all such payments and collections against the Loan or any other obligations then due and payable under the Loan Documents in such manner as Lender may deem appropriate (subject to any express provisions of the Loan Documents to the contrary), notwithstanding any entry by Lender upon any of its books and records.

6.   Late Charges .   If any installment of interest, principal or other amount due under the Loan Documents is not paid on or before the fifteenth (15th) day after the date such payment is due, Maker shall pay Lender a late charge in an amount equal to ten percent (10%) of the amount due on any payment (including, but not limited to, any payment of principal, interest,

unfunded loan fee, if applicable, or any other payment due other than the payment of the total principal amount due upon maturity of the Loan [whether at stated maturity or by acceleration]) to defray part of the increased cost of collecting the late payments and the opportunity cost incurred by Lender because of the unavailability of the funds.

7.   Security for Payment .   The payment of this Note is further evidenced by the Construction Loan Agreement of ev