exv10w3



 







Exhibit 10.3




EIGHTH MODIFICATION AGREEMENT

(Unsecured Loan)




     THIS EIGHTH MODIFICATION AGREEMENT (“Agreement”), dated November 18, 2005 but effective as of
November 4, 2005, is entered into by and between WELLS FARGO BANK, NATIONAL ASSOCIATION
(“Lender”), and AmREIT, a Texas Real Estate Investment Trust (“Borrower”).



RECITALS




     A. Lender made a revolving loan (the “Loan”) to Borrower in the maximum principal amount of
TWENTY MILLION AND NO/100THS DOLLARS ($20,000,000.00) evidenced by a revolving note dated September
4, 2003, executed by Borrower in favor of Lender (the “Revolving Note”), which Revolving Note was
modified and increased by a revolving loan to Borrower in the maximum principal amount of THIRTY
MILLION AND NO/100THS DOLLARS ($30,000,000.00) evidenced by a First Amended and Restated Revolving
Note dated December 8, 2003, executed by Borrower in favor of Lender (the “First Amended Note”).



     B. The First Amended Note is governed by the terms of a Revolving Credit Agreement (as
amended, the “Loan Agreement”) dated September 4, 2003, executed by Borrower and Lender, which
Loan Agreement, together with the First Amended Note, the First
Modification (hereinafter defined), Second Modification (hereinafter
defined), Second Amended Note (hereinafter defined), Third
Modification Agreement (hereinafter defined), Fourth Modification Agreement (hereinafter
defined), Fifth Modification Agreement (hereinafter defined), Third Amended Note (hereinafter
defined), Sixth Modification Agreement (hereinafter defined), Seventh Modification (hereinafter
defined) this Agreement and all other documents executed in conjunction with the Loan are herein
collectively called the “Loan Documents.”



     C. Borrower and Lender entered into that certain Modification Agreement dated as of December
8, 2003 (the “First Modification”) pursuant to which the total amount of the Loan was increased and
certain terms and provisions of the Loan Documents were modified and amended.



     D. Borrower and Lender entered into that certain Second Modification Agreement (the “Second
Modification”) dated as of June 30, 2004 pursuant to which the total amount of the Loan was
increased to Thirty-Five Million and No/100 Dollars ($35.000,000.00), which increased Loan is
evidenced by a Second Amended and Restated Revolving Note executed and delivered by Borrower to
Lender dated June 30, 2004 in the maximum principal amount of Thirty-Five Million and No/100
Dollars ($35,000,000.00) (the “Second Amended Note”).



     E. Borrower and Lender entered into that certain Third Modification Agreement (the “Third
Modification”) dated September 4, 2004, pursuant to which the Revolving Credit Termination Date (as
defined in the Loan Agreement) was extended to October 4, 2004.



     F. Borrower and Lender entered into that certain Fourth Modification Agreement (the “Fourth
Modification”) dated October 4, 2004, pursuant to which the Revolving Credit Termination Date (as
defined in the Loan Agreement) was extended to October 4, 2005 and



 









 







pursuant to which certain terms and provisions of the Loan Documents were modified and amended.



     G. Borrower and Lender entered into that certain Fifth Modification Agreement (the “Fifth
Modification”) dated December 21, 2004, pursuant to which (i) the total amount of the Loan was
increased to Forty-One Million and No/100 Dollars ($41,000,000.00), which increased Loan is
evidenced by a Third Amended and Restated Revolving Note executed and delivered by Borrower to
Lender dated December 21, 2004 in the maximum principal amount of Forty-One Million and No/100
Dollars ($41,000,000.00)(The “Third Amended Note”) and (ii) certain terms and provisions of the
Loan Documents were modified and amended.



     H. Borrower and Lender entered into that certain Sixth Modification Agreement (the “Sixth
Modification”) dated June 1, 2005, pursuant to which certain terms and provisions of the Loan
Documents were modified and amended.



     I. Borrower and Lender entered into that certain Seventh Modification Agreement (the
“Seventh Modification”) dated October 4, 2005, pursuant to which the Revolving Credit Termination
Date (as defined in the Loan Agreement) was extended to November 4, 2005.



     J. By this Agreement Borrower and Lender intend to further extend the Revolving Credit
Termination Date, to reduce the total amount of the Loan to Forty Million and No/100 Dollars
($40,000,000.00) and to further modify and amend certain terms and provisions of the Loan
Documents.



     NOW, THEREFORE, Borrower and Lender agree as follows:



     1. DEFINED TERMS. Unless otherwise defined in this Agreement, capitalized terms
used in this Agreement shall have the same meanings as are ascribed to such terms in the Loan
Agreement.



     2. DECREASE OF COMMITMENT. The Commitment shall be and hereby is decreased from
Forty One Million and No/100 Dollars ($41,000,000.00) to Forty Million and No/100 Dollars
($40,000,000.00). To evidence such decrease in the Commitment Borrower shall execute and deliver
to Lender a Fourth Amended and Restated Revolving Note in the form attached to this Agreement as
Exhibit “A” and made a part hereof, which Fourth Amended and Restated Revolving Note shall, from
and after the date of this Agreement, be deemed the “Revolving Note” which is defined in and the
subject of the Loan Agreement, as modified by the Fifth Modification. Exhibit “A” to this
Agreement shall be and hereby is substituted for Exhibit “B” to the Loan Agreement.



     3. DEFINITIONAL CHANGES.




	 	(a)	 	The definition of the term “Applicable Margin” as set forth in Section 1.1 of
the Loan Agreement shall be and hereby is deleted and the following shall be and
hereby is inserted in lieu thereof:
	 
	 	 	 	“Applicable Margin” means the percentage rate set forth
below corresponding to the ratio of Total Liabilities to Gross Asset
Value




 









 






	 	 	 	as determined in accordance with Section 7.1 (c) in effect at such
time:





	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Applicable Margin for	 	Applicable Margin for
	Level	 	Ratio of Total Liabilities to Gross Asset Value	 	LIBOR Loans	 	Base Rate Loans
	1

	 	Less than or equal to 0.40 to 1.00
	 	 	1.35	%	 	 	0	%
	2

	 	Greater than 0.40 to 1.00 but less than
or equal to 0.50 to 1.00
	 	 	1.55	%	 	 	0	%
	3

	 	Greater than 0.50 to 1.00 but less than
or equal to 0.55 to 1.00
	 	 	1.65	%	 	 	0	%
	4

	 	Greater than 0.55 to 1.00 but less than
or equal to 0.60 to 1.00
	 	 	1.85	%	 	 	0	%
	5

	 	Greater than 0.60 to 1.00
	 	 	2.35	%	 	 	0.25	%







The Applicable Margin for Loans shall be determined by Lender
based on the ratio of Total Liabilities to Gross Asset Value as set
forth in the Compliance Certificate most recently delivered by the
Borrower pursuant to Section 7.1(c) Any such adjustment to such
Applicable Margin shall be effective as of the first day of the
calendar quarter immediately following the end of the calendar
quarter for which Borrower delivers to Lender the applicable
Compliance Certificate pursuant to Section 7.1(c). If the Borrower
fails to deliver a Compliance Certificate pursuant to Section 7.1(c)
the Applicable Margin shall equal the percentages corresponding to
Level 5 from the date the required Compliance Certificate was due
until the date of receipt by Lender of the required Compliance
Certificate; however the application of such Level 5 Applicable
Margin under such circumstances shall not impair Lender’s ability to
declare such failure to deliver the required Compliance Certificate
an Event of Default. Further, the inclusion of Level 5 in the
foregoing table shall not be deemed a consent by Lender for Borrower
to breach the covenants set forth in Section 8.2 of this Loan
Agreement and shall not impair Lender’s ability to declare such
breach an Event of Default.”




	 	(b)	 	The definition of the term “Commitment” as set
forth in Section 1.1 of the Loan
Agreement, as modified by the provisions of the Fifth Modification, shall be and hereby
is modified to delete the words “Forty-One Million and No/100 Dollars ($41,000,000.00)”
and to substitute the words “Forty Million and No/100 Dollars ($40,000,000.00)” in lieu
thereof.
	 
	 	(c)	 	The definition of the term “Operating Property Value” as set forth in Section 1.1
of the Loan Agreement, as modified by the provisions of the Fourth Modification, shall
be and hereby is deleted and the following definition shall be and hereby is inserted in
lieu thereof:
	 
	 	 	 	“Operating Property Value” means, as of a given date and with
respect to any Person, such Person’s EBITDA for the fiscal quarter





 









 





	 	 	 	most recently ended (including the amortized cash portion of Direct
Financing Leases [as defined by GAAP] not already added back to
EBITDA, and excluding Net Operating Income from any Property not
owned by such Person for the entire fiscal quarter most recently
ended and further excluding EBITDA derived from sources other than
Property) multiplied by 4 and divided by (i) eight
and one-quarter percent
(81/4%) for that portion of
EBITDA derived from single-tenant, triple-net leased Properties,
(ii) eight and one-quarter percent
(81/4%) for that
portion of EBITDA derived from multi-tenant Properties and (iii)
eight percent (8%) for portion of EBITDA derived from
grocery-anchored retail Properties (including the Uptown Park
Property being that retail Property located at 1101, 1111, 1121,
1131, 1141, 1151, and 1180 Uptown Park Boulevard, Houston, Texas
77056, plus the purchase price of any real property acquired
during the fiscal quarter most recently ended other than real
property upon which construction is then in progress.”






	 	(d)	 	The definition of the term “Revolving Credit Termination Date” as set forth in
Section 1.1 of the Loan Agreement, as modified by the provisions of the Seventh
Modification, shall be and hereby is modified to delete the words “November 4, 2005”
and substitute the words “November 4, 2007” in lieu thereof.





     4. ADDITION
OF DEFINITION. The following definition shall be and hereby is added to
Section 1.1 of the Loan Agreement:




“Unused
Fee” means a fee payable by Borrower to Lender in
consideration of Lender’s having the Commitment available to be
loaned to Borrower, which Unused Fee shall be calculated and paid
quarterly based on the portion of the Commitment, determined on a
daily basis, not borrowed and outstanding during such preceding
calendar quarter.”



     5. EXTENSION
FEE. Upon the execution of this Agreement Borrower shall pay to Lender a
credit facility extension fee in the amount of $200,000.00.



     6. UNUSED
FEE. The following provision shall be and hereby is added as Section 3.1(d)
to the Loan Agreement:




“(d) On the first day of each January, April, July and October prior
to the Revolving Credit Termination Date, commencing January 1, 2006,
and on the Revolving Credit Termination date with respect to the
period since the last date on which the Unused Fee was paid, Borrower
shall pay to Lender the Unused Fee. If the unused portion of the
Commitment is equal to or greater than fifty percent (50%) of the
Commitment, the Unused Fee rate shall be 12.5/100% (.125%) of the
Unused portion of the Commitment. If



 









 






the unused portion of the Commitment is less than fifty percent (50%)
of the Commitment, the Unused Fee rate shall be 20/100% (.2%) of the
unused portion of the Commitment”.



     7. UNENCUMBERED
POOL PROPERTIES. The provisions of Sections 4.3 (d) and 4.3(e) of
the Loan Agreement shall be and hereby are deleted and the following provisions shall be and hereby
are inserted in lieu thereof:




“(d) No single-tenant Unencumbered Pool Property (other than those leased by
CVS Corporation and its Subsidiaries [“CVS”]) shall constitute greater than
10% of the total value of the Unencumbered Pool Properties, and no
single-tenant Unencumbered Pool Property leased by CVS shall constitute
greater than 15% of the total value of the Unencumbered Pool Properties.




(e) Any single Unencumbered Pool Property which has an Unencumbered Pool
Value that is greater than 15% of the total value of all Unencumbered Pool
Properties shall, for the purposes of determining Maximum Loan Availability,
only be accorded a value in an amount equal to 15% of the total value of all
Unencumbered Pool Properties, except that the foregoing, limit shall, as to
the South Bank Property (being that Property located at 111 West Crockett,
San Antonio, Texas 78205) be increased to 25% of the total value of all
Unencumbered Pool Properties.”



     8. CONCENTRATIONS. Section 7.19 of the Loan Agreement shall be and hereby is deleted
and the following shall be and hereby is inserted in lieu thereof:




“At no time shall Borrower and its Subsidiaries, on a consolidated basis,
derive more than 15% of its aggregate Net Operating Income from any single
tenant (other than CVS), nor shall Borrower and its Subsidiaries, on a
consolidated basis, derive more that 18% of its aggregate Net Operating
Income from CVS. Any tenant entities whose financial reporting is, in
accordance with GAAP, consolidated shall, for the purposes of the foregoing
covenant, be deemed a “single tenant.”



     9. MINIMUM TANGIBLE NET WORTH. Section 8.1 of the Loan Agreement shall be and hereby
is deleted and the following shall be and hereby is inserted in lieu thereof:




“Borrower shall not at any time permit the Tangible Net Worth of Borrower
and its Subsidiaries, on a consolidated basis, to be less than (a)
$158,000,000.00, plus (b) 90% of the amount of proceeds in cash or
Property (net of transaction costs) received by Borrower from the sale or
issuance by Borrower of Shares, options, warrants or other Equity Interests
of any class or character after June 30, 2005.”



     10. RATIOS OF TOTAL LIABILITIES TO GROSS ASSET VALUE. The provisions of Section 8.2 of
the Loan Agreement, as modified by the Fifth Modification, shall be and hereby are deleted and the
following shall be and hereby are inserted in lieu thereof:



 









 






“Borrower shall not at any time permit the ratio of (a) Total
Liabilities of Borrower and its Subsidiaries, on a consolidated
basis, to (b) Gross Asset Value of Borrower and its Subsidiaries, on
a consolidated basis to exceed 0.60 to 1.00.”



     11. RATIO OF EBITDA TO INTEREST EXPENSE. The provisions of Section 8.4 of the Loan
Agreement shall be and hereby are deleted and the following provisions shall be and hereby are
inserted in lieu thereof:




Borrower shall not permit the ratio of (a) EBITDA of Borrower and
its Subsidiaries, on a consolidated basis, to (b) Interest Expense
of Borrower and its Subsidiaries, on a consolidated basis, for any
fiscal quarter to be less than 2.00 to 1.00.



     12. RATIO OF EBITDA TO FIXED CHARGES. The provisions of Section 8.5 of the Loan
Agreement, as modified by the Fourth Modification, shall be and hereby are deleted and the
following provisions shall be and hereby are inserted in lieu thereof:




Borrower shall not permit the ratio of (a) EBITDA of Borrower and
its Subsidiaries, on a consolidated basis, to (b) the Fixed Charges
of Borrower and its Subsidiaries, on a consolidated basis, for any
fiscal quarter to be less than 1.75 to 1.00 for such quarter.



     13. NOTICES. The provisions of Section 10.1 of the Loan Agreement shall be and hereby
are deleted and the following provisions shall be and hereby are inserted in lieu thereof:




“All notices, requests and other communications to any party under
the Loan Documents shall be in writing (including facsimile
transmission or similar writing) and shall be given to such party as
follows:


If to Borrower:



AmREIT



Eight Greenway Plaza, Suite 1000

Houston, Texas 77046
 Attention:
Mr., Kerr Taylor
 Telecopier: (713) 850-0498
 Telephone: (713) 850-1400



With a copy of any notice of default to:



Wilson, Cribbs & Goren, P.C.
 2500
Fannin
 Houston, Texas 77002
 Attn: Reid C. Wilson

Telecopier: (713) 229-8824
 Telephone: (713) 222-9000





 









 







If to Lender:



Wells Fargo Bank, National Association

Minneapolis Loan Center
 733 Marquette Avenue,
10th
Floor
 Minneapolis, Minnesota 55402
 Attention: Disbursement
Administrator
 Telecopier: (866) 720-0617
 Telephone: (612) 667-4507



with a copy to:



Wells Fargo Bank, National Association
 1000
Louisiana, 4th Floor
 Houston, Texas 77002-5093
 Attention: Loan Administration

Telecopier: (713) 739-1077
 Telephone: (713) 319-1414





or as to each party at such other address as such party shall
designate in a written notice to the other parties. Each such
notice, request or other communication shall be effective (a) if
given by mail, 72 hours after such communication is deposited in the
United States Mail, certified with return receipt requested, postage
prepaid, addressed as aforesaid or (b) if given by any other means
(including facsimile), when received at the applicable address
provided for in this Section; provided that notices to Lender under
Article 2, and any notice of a change of address for notices, shall
not be effective until received.”



     14. GUARANTORS. The execution of this Agreement is joined in by AMREIT OPERATING
CORPORATION and AMREIT REALTY INVESTMENT CORPORATION, each as a Guarantor, for the purposes of (i)
evidencing Guarantors’ consent to the modifications to the Loan Documents evidenced by this
Agreement, (ii) confirming to Lender that Guarantors’ obligations to Lender as set forth in the
Guaranty dated September 4, 2003, executed and delivered by Guarantor to Lender are ratified and
declared to be in full force and effect, and (iii) evidencing their joinder in releasing Lender and
waiving claims as set forth in Section 17 hereof.



     15. REAFFIRMATIONS. Borrower hereby reaffirms to Lender each of the representations,
warranties, covenants and agreements of Borrower set forth in the Loan Documents.



     16. ENFORCEABLE OBLIGATIONS. Borrower hereby ratifies, affirms, reaffirms,
acknowledges, confirms and agrees that the Loan Documents represent valid and enforceable
obligations of Borrower, and Borrower further acknowledges that there are no existing claims,
defenses, personal or otherwise, or rights of setoff whatsoever with respect to the Second



 









 







Amended Note, and Borrower further acknowledges and represents that no event has occurred and no
condition exists which would constitute a default under the Loan Documents or this Agreement,
either with or without notice or lapse of time, or both.



     17. RELEASE AND WAIVER OF CLAIMS. In consideration of (i) the modification of
certain provisions of the Loan Documents, as herein provided, and (ii) the other benefits received
by Borrower hereunder, Borrower and Guarantor, each for themselves, hereby RELEASE, RELINQUISH and
forever DISCHARGE Lender, as well as its predecessors, successors, assigns, agents, officers,
directors, employees and representatives, of and from any and all claims, demands, actions and
causes of action of any and every kind or character, past or present, which either may have against
Lender and its predecessors, successors, assigns, agents, officers, directors, employees
and representatives arising out of or with respect to (a) any right or power to bring any claim
against Lender for usury or to pursue any cause of action against Lender based on any claim of
usury, and (b) any and all transactions relating to the Loan Documents occurring prior to the date
hereof, including any loss, cost or damage, of any kind or character, arising out of or in any way
connected with or in any way resulting from the acts, actions or omissions of Lender, and its
predecessors, successors, assigns, agents, officers, directors, employees and representatives,
including any breach of fiduciary duty, breach of any duty of fair dealing, breach of confidence,
breach of funding commitment, undue influence, duress, economic coercion, conflict of
interest, negligence, bad faith, malpractice, intentional or negligent infliction of mental
distress, tortious interference with contractual relations, tortious interference with corporate
governance or prospective business advantage, breach of contract, deceptive trade practices,
libel, slander or conspiracy, but in each case only to the extent permitted by applicable law.



     18. MISCELLANEOUS.




	 	(a)	 	As modified hereby, the provisions of the Loan Documents shall continue in full
force and effect, and the Borrower acknowledges and reaffirms its liability to Lender
thereunder. In the event of any inconsistency between this Agreement and the terms of
the Loan Documents, this Agreement shall govern.
	 
	 	(b)	 	Borrower hereby agrees to pay all costs and expenses incurred by Lender in
connection with the execution and administration of this Agreement and the modification
of the Loan Documents including, but not limited to, all reasonable legal fees incurred
by Lender.
	 
	 	(c)	 	Any default by Borrower in the performance of its obligations herein contained
shall constitute a default under the Loan Documents and shall allow Lender to exercise
all of its remedies set forth in the Loan Documents.
	 
	 	(d)	 	In case any of the provisions of this Agreement shall for any reason be held to
be invalid, illegal or unenforceable, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, and this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never been contained herein.




 









 












	 	(e)	 	This Agreement and the Loan Documents shall be governed and construed according to the
laws of the State of Texas (without regard to any conflict of laws principles) and the
applicable laws of the United States.
	 
	 	(f)	 	This Agreement shall be binding upon and inure to the benefit of Lender, Borrower and their
respective successors, assigns and legal representatives.
	 
	 	(g)	 	Borrower hereby acknowledges and agrees that it has entered into this Agreement of its own
free will and accord and in accordance with its own judgment after advice of its own legal
counsel, and states that it has not been induced to enter into this Agreement by any
statement, act or representation of any kind or character on the part of the parties hereto,
except as expressly set forth in this Agreement.
	 
	 	(h)	 	This Agreement may be executed in multiple counterparts, each of which shall constitute an
original instrument, but all of which shall constitute one and the same agreement.
	 
	 	(i)	 	ENTIRE AGREEMENT. THIS AGREEMENT, TOGETHER WITH THE LOAN AGREEMENT AND THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. THIS INSTRUMENT MAY BE AMENDED ONLY BY
AN INSTRUMENT IN WRITING EXECUTED BY THE PARTIES HERETO.




 









 











     IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to be duly executed as of
the date first above written.



	 	 	 	 	 	 	 
	 

	 	“LENDER”	 	 
	 
	 	 	 	 	 	 
	 	 	WELLS FARGO BANK	 	 
	 	 	NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Timothy P. Williamson
 

Timothy P. Williamson
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	“BORROWER”	 	 
	 
	 	 	 	 	 	 
	 	 	AmREIT,	 	 
	 	 	a Texas Real Estate Investment Trust	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Chad Braun
 

Chad Braun
	 	 
	 

	 	Title:
	 	Executive Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	“GUARANTORS”	 	 
	 
	 	 	 	 	 	 
	 	 	AMREIT OPERATING CORPORATION,	 	 
	 	 	 a Texas corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Chad Braun
 

Chad Braun
	 	 
	 

	 	Title:
	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	AMREIT REALTY INVESTMENT CORPORATION,
	 	 	a Texas corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Chad Braun
 

Chad Braun
	 	 
	 

	 	Title:
	 	Vice President	 	 






 









 






EXHIBIT “A”




FORM OF FOURTH AMENDED AND RESTATED REVOLVING PROMISSORY NOTE




 









 








FOURTH AMENDED AND RESTATED REVOLVING NOTE



	 	 	 	 	 
	$40,000,000.00

	 	Houston, Texas
	 	November 4, 2005






     FOR VALUE RECEIVED, the undersigned, AmREIT, a Texas Real Estate Investment Trust
(“Borrower”), hereby unconditionally promises to pay to the order of Wells Fargo Bank, National
Association (the “Lender”), at its Lending Office at Wells Fargo Bank, National Association,
Minneapolis Loan Center, 733 Marquette Avenue, 10th Floor. Minneapolis, Minnesota 55402
or at such other address as may be specified by Lender to Borrower, the principal sum of FORTY
MILLION AND NO/100 DOLLARS ($40,000,000.00), or such lesser amount as may be the then outstanding
and unpaid balance of all the Loans made by Lender to the Borrower pursuant to, and in accordance
with the terms of, the Credit Agreement (hereinafter defined).



     The Borrower further agrees to pay interest at said Lending Office, in like money, on the
unpaid principal amount owing hereunder from time to time on the dates and at the rates and at the
times specified in the Credit Agreement.



     This Fourth Amended and Restated Revolving Note (the “Revolving Note”) is given in
modification and decrease of that certain Third Amended and Restated Revolving Note dated December
21, 2004, executed and delivered by Borrower to Lender in the original principal amount of
FORTY-ONE MILLION AND NO/100 DOLLARS ($41,000,000.00) and from and after the date of this
Revolving Note shall constitute the “Revolving Note” referred to in that certain Revolving Credit
Agreement dated as of September 4, 2003 (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”), by and between the Borrower and Lender, and is subject
to, and entitled to, all provisions and benefits thereof. Capitalized terms used herein and not
defined herein shall have the respective meanings given to such terms in the Credit Agreement. The
Credit Agreement, among other things, (a) provides for the making of Loans by Lender to Borrower
from time to time in an aggregate amount not to exceed at any time outstanding the Dollar amount
first above mentioned, (b) permits the prepayment of the Loans by the Borrower subject to certain
terms and conditions and (c) provides for the acceleration of the Loans upon the occurrence of
certain specified events.



     It is expressly stipulated and agreed to be the intent of Borrower and Lender at all times to
comply strictly with the applicable Texas law (or applicable United States federal law to the
extent that it permits Lender to contract for, charge, take, reserve or receive a greater amount of
interest than under Texas law) governing the maximum rate or amount of interest payable on this
Revolving Note or the Related Indebtedness (hereinafter defined). If the applicable law is ever
judicially interpreted so as to render usurious any amount (i) contracted for, charged, taken,
reserved or received pursuant to this Revolving Note, any of the other Loan Documents or any other
communication or writing by or between Borrower and Lender related to the transaction or
transactions that are the subject matter of the Loan Documents, (ii) contracted for, charged or
received by reason of Lender’s exercise of the option to accelerate the maturity of this Revolving
Note and/or the Related Indebtedness, or (iii) Borrower will have paid or Lender will have received
by reason of any voluntary prepayment by Borrower of this Revolving Note and/or the Related
Indebtedness, then it is Borrower’s and Lender’s express intent that all amounts charged in excess
of the Maximum Lawful Rate shall be automatically canceled, ab initio, and all



 









 







amounts in excess of the Maximum Lawful Rate theretofore collected by Lender shall be credited on
the principal balance of this Revolving Note and/or the Related Indebtedness (or, if this
Revolving-Note and all Related Indebtedness have been or would thereby be paid in full, refunded to
Borrower), and the provisions of this Revolving Note and the other Loan Documents immediately be
deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without
the necessity of the execution of any new document, so as to comply with the applicable law, but so
as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder;
provided, however, if this Revolving Note has been paid in full before the end of the stated term
of this Revolving Note, then Borrower and Lender agree that Lender shall, with reasonable
promptness after Lender discovers or is advised by Borrower that interest was received in an amount
in excess of the Maximum Lawful Rate, either refund such excess interest to Borrower and/or credit
such excess interest against this Revolving Note and/or any Related Indebtedness then owing by
Borrower to Lender. Borrower hereby agrees that as a condition precedent to any claim seeking usury
penalties against Lender, Borrower will provide written notice to Lender, advising Lender in
reasonable detail of the nature and amount of the violation, and Lender shall have sixty (60) days
after receipt of such notice in which to correct such usury violation, if any, by either refunding
such excess interest to Borrower or crediting such excess interest against this Revolving Note
and/or the Related Indebtedness then owing by Borrower to Lender. All sums contracted for, charged
or received by Lender for the use, forbearance or detention of any debt evidenced by this Revolving
Note and/or the Related Indebtedness shall, to the extent permitted by applicable law, be amortized
or spread, using the actuarial method, throughout the stated term of this Revolving Note and/or the
Related Indebtedness (including any and all renewal and extension periods) until payment in full so
that the rate or amount of interest on account of this Revolving Note and/or the Related
Indebtedness does not exceed the Maximum Lawful Rate from time to time in effect and applicable to
this Revolving Note and/or the Related Indebtedness for so long as debt is outstanding. In no event
shall the provisions of Chapter 346 of the Texas Finance Code (which regulates certain revolving
credit loan accounts and revolving triparty accounts) apply to this Revolving Note and/or the
Related Indebtedness. Notwithstanding anything to the contrary contained herein or in any of the
other Loan Documents, it is not the intention of Lender to accelerate the maturity of any interest
that has not accrued at the time of such acceleration or to collect unearned interest at the time
of such acceleration. Borrower and Lender hereby agree that any and all suits alleging the
contracting for, charging or receiving of usurious interest shall lie in Harris County, Texas, and
each irrevocably waive the right to venue in any other county.



     As used herein, the term “Maximum Lawful Rate” shall mean the maximum lawful rate of interest
which may be contracted for, charged, taken, received or reserved by Lender in accordance with the
applicable laws of the State of Texas (or applicable United States federal law to the extent that
it permits Lender to contract for, charge, take, receive or reserve a greater amount of interest
than under Texas law), taking into account all Charges (as herein defined) made in connection with
the transaction evidenced by this Revolving Note and the other Loan Documents. As used herein, the
term “Charges” shall mean all fees, charges and/or any other things of value, if any, contracted
for, charged, received, taken or reserved by Lender in connection with the transactions relating
to this Revolving Note and the other Loan Documents, which are treated as interest under
applicable law. As used herein, the term “Related Indebtedness” shall mean any and all debt paid
or payable by Borrower to Lender pursuant to the Loan Documents or any other communication or
writing by or between Borrower and Lender



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related to the transaction or transactions that are the subject matter of the Loan Documents,
except such debt which has been paid or is payable by Borrower to Lender under the Revolving
Note.



     To the extent that Lender is relying on Chapter 303 of the Texas Finance Code to determine the
Maximum Lawful Rate payable on this Revolving Note and/or the Related Indebtedness, Lender will
utilize the weekly ceiling from time to time in effect as provided in such Chapter 303, as amended.
To the extent United States federal law permits Lender to contract for, charge, take, receive or
reserve a greater amount of interest than under Texas law, Lender will rely on United States
federal law instead of such Chapter 303 for the purpose of determining the Maximum Lawful Rate.
Additionally, to the extent permitted by applicable law now or hereafter in effect, Lender may, at
its option and from time to time, utilize any other method of establishing the Maximum Lawful Rate
under such Chapter 303 or under other applicable law by giving notice, if required, to Borrower as
provided by applicable law now or hereafter in effect.



     Notwithstanding anything in this Revolving Note to the contrary, if at any time (i) the
interest rate provided for under this Revolving Note or any other Loan Document (the “Stated
Rate”), and (ii) the Charges computed over the full term of this Revolving Note, exceed the
Maximum Lawful Rate, then the rate of interest payable hereunder, together with all Charges, shall
be limited to the Maximum Lawful Rate; provided, however, that any subsequent reduction in the
Stated Rate shall not cause a reduction of the rate of interest payable hereunder below the
Maximum Lawful Rate until the total amount of interest earned
hereunder, together with all
Charges, equals the total amount of interest which would have accrued at the Stated Rate if such
interest rate had at all times been in effect. Changes in the Stated Rate resulting from a
fluctuations in the rates used to calculate the Stated Rate shall be subject to the provisions of
this paragraph.



     The holder hereof shall be entitled to the benefits of the other Loan Documents (to the
extent and with the effect as therein provided).



     The Borrower hereby waives presentment, demand, protest and notice of any kind, including
without limitation notice of intent to accelerate and notice of acceleration. No failure to
exercise, and no delay in exercising any rights hereunder on the part of the holder hereof shall
operate as a waiver of such rights.



     Time is of the essence of this Revolving Note.



     THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TEXAS.



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     IN WITNESS WHEREOF, the undersigned has executed and delivered this Revolving Note as of the
date written above.



	 	 	 	 	 	 	 
	 	 	AmREIT,	 	 
	 	 	a Texas Real Estate Investment Trust	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Chad Braun
 

	 	 
	 

	 	Name:
	 	Chad Braun	 	 
	 

	 	Title:
	 	Executive Vice President	 	 







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