EXHIBIT
10.20



	
  

 	
  

 
	
 $23,400,000.00

 	
 December ____, 2012 

 
	
  

 	
 (the “Effective Date”)

 


Secured
Promissory Note


FOR VALUE RECEIVED, the
undersigned, AMREIT PRESTON ROYAL, LP, a Texas limited partnership, whose
address is 8 Greenway Plaza, Suite 1000, Houston, Texas 77046 (the “Borrower”),
promises to pay Twenty-Three Million Four Hundred Thousand Dollars and No Cents
($23,400,000.00), together with interest according to the terms of this Secured
Promissory Note (this “Note”), to the order of TRANSAMERICA FINANCIAL LIFE
INSURANCE COMPANY, a New York corporation (together with any future holder, the
“Lender”), whose address is c/o AEGON USA Realty Advisors, LLC, 4333 Edgewood
Road, N.E., Cedar Rapids, Iowa 52499-5443. Capitalized terms used but not
defined in this Note shall have the meanings assigned to them in the Deed of
Trust, as defined in Section 12 below.


	
  

 	
  

 	
  

 
	
 1.

 	
 CONTRACT
 INTEREST RATE

 
	
  

 	
  

 	
  

 
	
  

 	
 The
 principal balance of this Note shall bear interest at the rate of the lesser
 of (i) Three and Twenty-One One Hundredths percent (3.21%) per annum (the
 “Note Rate”) and (ii) the Maximum Lawful Rate (as defined in Section
 24.1 below). Interest shall accrue based on twelve thirty-day months.

 
	
  

 	
  

 	
  

 
	
 2.

 	
 SCHEDULED
 PAYMENTS

 
	
  

 	
  

 	
  

 
	
  

 	
 2.1

 	
 Prepayment of Interest for the
 Month of Funding

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Unless the
 funding of the loan evidenced by this Note (together with all additional
 charges, advances and accruals, the “Loan”) occurs on the first day of a
 calendar month, the Borrower shall prepay, on the date of the funding,
 interest due from the date of the funding through and including the last day
 of the calendar month in which the funding occurs.

 
	
  

 	
  

 	
  

 
	
  

 	
 2.2

 	
 Monthly Payments

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 On the first
 day of February, 2013 and on the first day of each subsequent calendar month
 through December, 2019, the Borrower shall pay an installment in the amount
 of One Hundred One Thousand Three Hundred Twenty-Five Dollars and
 Twenty-Eight Cents ($101,325.28). Monthly installments of principal and
 interest shall be made when due, regardless of the prior acceptance by the
 Lender of unscheduled payments.

 
	
  

 	
  

 	
  

 
	
  

 	
 2.3

 	
 Final Payment

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 The Loan
 shall mature on the first day of January, 2020 (the “Maturity Date”), when
 the Borrower shall pay its entire principal balance, together with all
 accrued interest and any other amounts owed by the Borrower under this Note
 or under any of the other documents entered into now or in the future in
 connection with the Loan (the “Loan Documents”).

 






	
 

	
 

	
 


	
 Promissory Note

 	
 -1-

 	
  

 
	
 Preston Royal Village,
 Dallas, Texas

 	
  

 	
  

 
	
 AEGON Loan No. 10512155

 	
  

 	
  

 













	
  

 	
  

 	
  

 
	
 3.

 	
 BALLOON
 PAYMENT ACKNOWLEDGMENT

 
	
  

 	
  

 	
  

 
	
  

 	
 The Borrower
 acknowledges that the scheduled monthly payments referred to in Section 2.2
 will not amortize fully the principal sum of this Note over its term,
 resulting in a “balloon” payment at maturity. Any future agreement to extend
 this Note or refinance the Indebtedness it evidences may be made only by
 means of a writing executed by a duly authorized officer of the Lender.

 
	
  

 	
  

 	
  

 
	
 4.

 	
 APPLICATION
 OF MONTHLY PRINCIPAL AND INTEREST PAYMENTS

 
	
  

 	
  

 	
  

 
	
  

 	
 When the
 Lender receives a monthly principal and interest payment, the Lender shall
 apply it first to interest in arrears for the previous month and then to the
 amortization of the principal amount of this Note, unless other amounts are
 then due under this Note or the other Loan Documents. If other amounts are
 due when a regular monthly payment is received, the Lender shall apply the
 payment first to accrued interest and then, at its discretion, either to
 those other amounts or to principal.

 
	
  

 	
  

 	
  

 
	
 5.

 	
 DEFAULT
 INTEREST

 
	
  

 	
  

 	
  

 
	
  

 	
 If a Default
 exists (as defined in Section 9 below) the outstanding principal balance of
 this Note shall, at the option of the Lender, bear interest at a rate (the
 “Default Rate”) equal to the lesser of (i) eighteen percent (18%) per annum
 and (ii) the Maximum Lawful Rate. If interest has accrued at the Default Rate
 during any period, the difference between such accrued interest and interest
 which would have accrued at the Note Rate during such period shall be payable
 on demand. If a court of competent jurisdiction determines that any interest
 charged has exceeded the maximum rate allowed by law, the excess of the
 amount collected over the legal rate of interest will be applied to the
 Indebtedness as a principal prepayment without premium, retroactively, as of
 the date of receipt, or returned to the Borrower if the Indebtedness has been
 fully paid.

 
	
  

 	
  

 	
  

 
	
 6.

 	
 LATE
 CHARGE

 
	
  

 	
  

 	
  

 
	
  

 	
 If the
 Lender does not receive any scheduled monthly principal and interest payment
 on or before the tenth (10th) day of the calendar month in which it is due,
 the Lender will send the Borrower written Notice that a late charge equal to
 five percent (5%) of the late payment has accrued. The Borrower shall pay any
 such late charge on or before the tenth day of the calendar month following
 the month during which the late payment was scheduled to have been received.

 
	
  

 	
  

 	
  

 
	
 7.

 	
 PREPAYMENT

 
	
  

 	
  

 	
  

 
	
  

 	
 This Note is
 closed to prepayment prior to and during the first twelve (12) full calendar
 months of its term (the “Lock Period”). Thereafter, the principal balance of
 this Note may be prepaid upon not less than thirty (30) days’ prior written
 Notice to the Lender. At the time of any prepayment, the Borrower shall pay
 all accrued interest on the principal balance of this Note and all other sums
 due to the Lender under the Loan Documents. In addition, unless the
 prepayment is a “Permitted Par Prepayment” (as defined in Section 8 below),
 the Borrower shall remit together with any prepayment a premium (the
 “Prepayment Premium Amount”) equal to the greater of (A) one percent (1%) of
 the 

 






	
 

	
 

	
 


	
 Promissory Note

 	
 -2-

 	
  

 
	
 Preston Royal Village,
 Dallas, Texas

 	
  

 	
  

 
	
 AEGON Loan No. 10512155

 	
  

 	
  

 













	
  

 	
  

 	
  

 
	
  

 	
 prepayment
 and (B) the amount (the “Yield Protection Amount”) calculated in accordance
 with the next succeeding paragraph of this Note.

 
	
  

 	
  

 	
  

 
	
  

 	
 Unless the
 one percent minimum prepayment premium applies, the “Prepayment Premium
 Amount” is the amount by which the present value of scheduled Loan payments
 (the “Total Present Value”) on the prepaid indebtedness exceeds the prepaid
 amount. To determine the Total Present Value, each of the scheduled payments
 to be made under the terms of this Note, including the “balloon” payment due
 at this Note’s maturity, shall be discounted to its present value as of the
 prepayment date. For this purpose, the Lender shall use a discount rate equal
 to (a) the interest rate on a hypothetical instrument which, assuming monthly
 compounding of interest, would produce a yield (as calculated by Merrill
 Lynch (or the Lender’s choice of another dealer in U.S. Treasury Securities)
 and as reported by Bloomberg, L.P.) equal to the interpolated average yield
 of U.S. Treasury Securities having the same average life as the remaining
 average life of the Loan (the “Prepayment Treasury Rate”), plus (b) fifty
 (50) basis points. The Prepayment Treasury Rate shall be determined as of two
 (2) Business Days (as defined in the Deed of Trust) before the date of the
 prepayment. The sum of these present value amounts equals the Total Present
 Value of a prepayment in full. If the prepayment is a partial prepayment, the
 Total Present Value equals the sum of these present value amounts multiplied
 by a fraction, the numerator of which is the principal amount to be prepaid
 and the denominator of which is the principal balance of the Loan as of the date
 of prepayment.

 
	
  

 	
  

 	
  

 
	
  

 	
 Voluntary
 partial prepayments shall be prohibited.

 
	
  

 	
  

 	
  

 
	
 8.

 	
 PERMITTED
 PAR PREPAYMENTS

 
	
  

 	
  

 	
  

 
	
  

 	
 The Lender
 shall not charge a prepayment premium on certain prepayments (the “Permitted
 Par Prepayments”). Permitted Par Prepayments include:

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 any prepayment in full of
 the Loan made no more than ninety (90) days before the Maturity Date; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 any prepayment made as the
 result of the Lender’s election to apply insurance or condemnation proceeds
 to the principal balance of this Note or to achieve any required loan to
 value ratio that is a prerequisite to the Borrower’s rights to obtain and to
 use such proceeds.

 
	
  

 	
  

 	
  

 
	
 9.

 	
 DEFAULT

 
	
  

 	
  

 	
  

 
	
  

 	
 A default on
 this Note (“Default”) shall exist if (a) the Lender fails to receive any
 required installment of principal and interest on or before the tenth (10th)
 day of the calendar month in which it is due, (b) the Borrower fails to pay
 the matured balance of this Note on the Maturity Date or (c) a “Default”
 exists as defined in any other Loan Document. If a Default exists and the
 Lender engages counsel to collect any amount due under this Note or if the
 Lender is required to protect or enforce this Note in any probate, bankruptcy
 or other proceeding, then any expenses incurred by the Lender in respect of
 the engagement, including the reasonable fees and reimbursable expenses of
 counsel and including such costs and fees which relate to issues that are
 particular to any given proceeding, shall constitute indebtedness evidenced
 by this Note, shall be payable on demand, and shall bear interest at the
 Default Rate. Such fees and expenses include those incurred in connection
 with any action against the Borrower for a deficiency judgment after a
 foreclosure or trustee’s sale of the Real Property under the Deed of Trust,

 






	
 

	
 

	
 


	
 Promissory Note

 	
 -3-

 	
  

 
	
 Preston Royal Village,
 Dallas, Texas

 	
  

 	
  

 
	
 AEGON Loan No. 10512155

 	
  

 	
  

 













	
  

 	
  

 	
  

 
	
  

 	
 including all of the Lender’s reasonable attorneys’ fees, property appraisal
 costs and witness fees.

 
	
  

 
	
 10.

 	
 ACCELERATION

 
	
  

 	
  

 	
  

 
	
  

 	
 If a Default
 exists, the Lender may, at its option, declare the unpaid principal balance
 of this Note to be immediately due and payable, together with all accrued
 interest on the Indebtedness, all costs of collection (including reasonable
 attorneys’ fees and expenses) and all other charges due and payable by the
 Borrower under this Note or any other Loan Document. If the subject Default
 has arisen from a failure by the Borrower to make a regular monthly payment
 of principal and interest, the Lender shall not accelerate the Indebtedness
 unless the Lender shall have given the Borrower at least three (3) Business
 Days’ advance Notice of its intent to do so.

 
	
  

 	
  

 	
  

 
	
  

 	
 Notwithstanding
 the foregoing, if the subject Default is a Curable Non-Monetary Default (as
 defined in the Deed of Trust), the Lender shall exercise its option to
 accelerate only by delivering Notice of acceleration to the Borrower. The
 Lender shall not deliver any such Notice of acceleration until (a) the
 Borrower has been given any required Notice of the prospective Default and
 (b) any applicable cure period has expired.

 
	
  

 	
  

 	
  

 
	
  

 	
 Except as
 expressly described in this Section, no Notice of acceleration shall be
 required in order for the Lender to exercise its option to accelerate the
 Indebtedness in the event of Default.

 
	
  

 	
  

 	
  

 
	
 11.

 	
 PREPAYMENT
 FOLLOWING ACCELERATION

 
	
  

 	
  

 	
  

 
	
  

 	
 Any Default
 resulting in the acceleration of the Indebtedness evidenced by this Note
 shall be presumed to be an attempt to avoid the provisions of Section 7 of
 this Note, which prohibit prepayment or condition the Lender’s obligation to
 accept prepayment on the payment of a prepayment premium. Accordingly, if the
 Indebtedness is accelerated, any amounts tendered to repay the accelerated
 Indebtedness, or realized by the Lender through its remedies following acceleration,
 shall be subject to either (a) if the prepayment is tendered or realized
 during the Lock Period, a premium equal to the greater of (x) ten percent
 (10%) of the amount so tendered or realized and (y) the prepayment premium
 that would have been applicable under Section 7 (calculated from the date of
 acceleration through the Maturity Date), or (b) if the prepayment is tendered
 or realized thereafter, the prepayment premium that would have been
 applicable under Section 7 in respect of a voluntary prepayment (calculated
 from the date of acceleration through the Maturity Date).

 
	
  

 	
  

 	
  

 
	
 12.

 	
 SECURITY

 
	
  

 	
  

 	
  

 
	
  

 	
 This Note is
 secured by a Deed of Trust, Security Agreement and Fixture Filing (the “Deed
 of Trust”) of even date herewith granted by the Borrower to Peter S. Graf,
 the Trustee, for the benefit of the Lender, conveying certain real property
 (the “Real Property”) located in the City of Dallas, Dallas County, Texas,
 and granting a security interest in certain fixtures and personal property,
 and by an Assignment of Leases and Rents of even date herewith made by the
 Borrower to the Lender, assigning the landlord’s interest in all present and
 future leases (the “Leases”) of all or any portion of the Real Property
 encumbered by the Deed of Trust. Reference is made to the Loan Documents for
 a description of the security and rights of the Lender. This reference shall 

 






	
 

	
 

	
 


	
 Promissory Note

 	
 -4-

 	
  

 
	
 Preston Royal Village,
 Dallas, Texas

 	
  

 	
  

 
	
 AEGON Loan No. 10512155

 	
  

 	
  

 













	
  

 	
  

 	
  

 
	
  

 	
 not affect
 the unconditional obligation of the Borrower to repay the Loan in accordance
 with its terms.

 
	
  

 	
  

 	
  

 
	
 13.

 	
 RECOURSE
 TO BORROWER

 
	
  

 	
  

 	
  

 
	
  

 	
 The Lender
 agrees that it shall not seek to enforce any monetary judgment with respect
 to the Indebtedness evidenced by this Note against the Borrower except
 through recourse to the Property (as defined in the Deed of Trust), unless
 the obligation from which the judgment arises is one of the “Carveout
 Obligations” defined in Section 14.

 
	
  

 	
  

 	
  

 
	
 14.

 	
 CARVEOUT
 OBLIGATIONS

 
	
  

 	
  

 	
  

 
	
  

 	
 The
 “Carveout Obligations” are (a) the obligation to repay any portion of the
 Indebtedness evidenced by this Note that arises because the Lender has
 advanced funds or incurred expenses in respect of any of the “Carveouts” (as
 defined below), (b) the obligation to repay the entire Indebtedness evidenced
 by this Note, if the Lender’s exculpation of the Borrower from personal
 liability under this Section has become void as set forth below, (c) the
 obligation to indemnify the Lender in respect of its actual damages suffered
 in connection with any of the Carveouts, and (d) the obligation to defend and
 hold the Lender harmless from and against any claims, judgments, causes of
 action or proceedings arising from any of the Carveouts. The “Carveouts” are:

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Fraud or material written
 misrepresentation.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Waste of the Property (which shall include
 damage, destruction or disrepair of the Real Property caused by a willful act
 or grossly negligent omission of the Borrower, but shall exclude ordinary
 wear and tear in the absence of gross negligence).

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Misappropriation of tenant security
 deposits (including proceeds of tenant letters of credit), Insurance Proceeds
 or Condemnation Proceeds.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Failure to turn over to the Lender all
 tenant security deposits and tenant letters of credit required to be held by
 the Borrower under the terms of the Leases on or prior to the date on which
 the Lender receives title to the Real Property following the foreclosure of
 its lien or by delivery of the deed in lieu of foreclosure.

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 Failure to pay property taxes, assessments
 or other lienable Impositions to the taxing authority prior to the date when
 payment becomes delinquent or to the Lender to the extent such impositions
 have accrued on the date the Lender receives title to the Real Property following
 the foreclosure of its lien or by delivery of the deed in lieu of
 foreclosure.

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 Failure to maintain insurance coverage in
 accordance with the Loan Documents, provided that any coverage furnished by a
 Key Tenant (or any other Person) will not impair, alter or diminish the
 insurance requirements under the Loan Documents and will not modify this
 subpart (f), or failure to pay insurance proceeds to the Lender in accordance
 with the Loan Documents, even if a Key Lease provides otherwise.

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 The cost to the Lender of the forced
 placement of insurance, as permitted under the Loan Documents.

 






	
 

	
 

	
 


	
 Promissory Note

 	
 -5-

 	
  

 
	
 Preston Royal Village,
 Dallas, Texas

 	
  

 	
  

 
	
 AEGON Loan No. 10512155

 	
  

 	
  

 













	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 Failure to pay to the Lender all
 Termination Payments, that are required to be paid to Lender pursuant to the
 Loan Documents.

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 Failure to pay to the Lender all Rents,
 income and profits, net of reasonable and customary operating expenses,
 received in respect of a period when the Loan is in Default.

 
	
  

 	
  

 	
  

 
	
  

 	
 (j)

 	
 The reasonable out-of-pocket expenses of
 enforcing the Loan Documents following Default, not including expenses
 incurred after the Lender has received a Qualified Offer.

 
	
  

 	
  

 	
  

 
	
  

 	
 (k)

 	
 Executing, terminating or amending a Lease
 in violation of the Loan Documents.

 
	
  

 	
  

 	
  

 
	
  

 	
 (l)

 	
 Any liability of the Borrower under the
 Environmental Indemnity Agreement. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (m)

 	
 Loss or damage suffered by the Lender as a
 result of: (i) Lender’s inability to perform an obligation under a Lease
 without breaching the Lease, or its inability to exercise a right under a
 Lease, in either case to the extent resulting from any reference made by the
 Lease to the “Shopping Center” to the extent “Shopping Center” includes the
 Leasehold Shopping Center Parcel; (ii) the exercise by a tenant of a right
 under a Lease that the tenant would have been unable to exercise but for any
 reference made by the Lease to the “Shopping Center” to the extent “Shopping
 Center” includes the Leasehold Shopping Center Parcel, or (iii) the
 performance by Lender of an obligation under a Lease that the Lender would
 not have been required to perform, but for any reference made by the Lease to
 the “Shopping Center” to the extent “Shopping Center” includes the Leasehold
 Shopping Center Parcel.

 
	
  

 	
  

 	
  

 
	
 The
 Lender’s exculpation of the Borrower from personal liability for the
 repayment of the Indebtedness evidenced by this Note shall be void without
 Notice if the Borrower (A) voluntarily grants a lien on the Property in
 violation of the Deed of Trust, or (B) files a voluntary petition for
 reorganization under Title 11 of the United States Code (or under any other
 present or future law, domestic or foreign, relating to bankruptcy,
 insolvency, reorganization proceedings or otherwise similarly affecting the
 rights of creditors), and has not made a Qualified Offer prior to the filing.
 After the Lender accepts a Qualified Offer, default by the Borrower in
 fulfilling the terms of the accepted offer shall trigger personal liability
 for the entire Indebtedness.

 
	
  

 	
  

 	
  

 
	
 15.

 	
 SEVERABILITY

 
	
  

 	
  

 	
  

 
	
  

 	
 If any
 provision of this Note is held to be invalid, illegal or unenforceable in any
 respect, or operates, or would if enforced operate to invalidate this Note,
 then that provision shall be deemed null and void. Nevertheless, its nullity
 shall not affect the remaining provisions of this Note, which shall in no way
 be affected, prejudiced or disturbed.

 
	
  

 	
  

 	
  

 
	
 16.

 	
 WAIVER

 
	
  

 	
  

 	
  

 
	
  

 	
 Except to
 the extent that such rights are expressly provided in this Note, the Borrower
 waives demand, presentment for payment, notice of intent to accelerate,
 notice of acceleration, protest, notice of protest, dishonor and of
 nonpayment and any and all lack of diligence or delays in collection or
 enforcement of this Note. Without affecting the 

 






	
 

	
 

	
 


	
 Promissory Note

 	
 -6-

 	
  

 
	
 Preston Royal Village,
 Dallas, Texas

 	
  

 	
  

 
	
 AEGON Loan No. 10512155

 	
  

 	
  

 













	
  

 	
  

 	
  

 
	
  

 	
 liability of
 the Borrower under this Note, the Lender may release any of the Property,
 grant any indulgence, forbearance or extension of time for payment, or
 release any other person now or in the future liable for the payment or
 performance of any obligation under this Note or any of the Loan Documents.

 
	
  

 	
  

 	
  

 
	
  

 	
 The Borrower
 further (a) waives any homestead or similar exemption; (b) waives any statute
 of limitation; (c) agrees that the Lender may, without impairing any future
 right to insist on strict and timely compliance with the terms of this Note,
 grant any number of extensions of time for the scheduled payments of any
 amounts due, and may make any other accommodation with respect to the
 Indebtedness evidenced by this Note; (d) waives any right to require a
 marshaling of assets; and (e) to the extent not prohibited by applicable law,
 waives the benefit of any law or rule of law intended for its advantage or
 protection as a debtor or providing for its release or discharge from
 liability under this Note, excepting only the defense of full and complete
 payment of all amounts due under this Note and the Loan Documents.

 
	
  

 	
  

 	
  

 
	
 17.

 	
 VARIATION
 IN PRONOUNS

 
	
  

 	
  

 	
  

 
	
  

 	
 All the
 terms and words used in this Note, regardless of the number and gender in
 which they are used, shall be deemed and construed to include any other
 number, singular or plural, and any other gender, masculine, feminine, or
 neuter, as the context or sense of this Note or any paragraph or clause
 herein may require, the same as if such word had been fully and properly
 written in the correct number and gender.

 
	
  

 	
  

 	
  

 
	
 18.

 	
 WAIVER OF JURY TRIAL

 
	
  

 	
  

 	
  

 
	
  

 	
 THE BORROWER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION
 OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (A) UNDER THIS NOTE OR ANY
 OTHER LOAN DOCUMENT OR (B) ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN
 CONNECTION WITH THIS NOTE OR ANY OTHER LOAN DOCUMENT, AND THE BORROWER AGREES
 THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A JUDGE AND NOT
 BEFORE A JURY.

 
	
  

 	
  

 	
  

 
	
 19.

 	
 OFFSET
 RIGHTS

 
	
  

 	
  

 	
  

 
	
  

 	
 In addition
 to all liens upon and rights of setoff against the money, securities, or
 other property of the Borrower given to the Lender by law, the Lender shall
 have a lien upon and a right of setoff against all money, securities, and
 other property of the Borrower, now or hereafter in possession of or on
 deposit with the Lender, whether held in a general or special account or
 deposit, or safe-keeping or otherwise, and, following a Default, every such
 lien and right of setoff may be exercised without demand upon, or notice to
 the Borrower. No lien or right of setoff shall be deemed to have been waived
 by any act or conduct on the part of the Lender, or by any neglect to
 exercise such right of setoff or to enforce such lien, or by any delay in so
 doing, and every right of setoff and lien shall continue in full force and
 effect until such right of setoff or lien is specifically waived or released
 by an instrument in writing executed by the Lender.

 






	
 

	
 

	
 


	
 Promissory Note

 	
 -7-

 	
  

 
	
 Preston Royal Village,
 Dallas, Texas

 	
  

 	
  

 
	
 AEGON Loan No. 10512155

 	
  

 	
  

 













	
  

 	
  

 	
  

 
	
 20.

 	
 COMMERCIAL
 LOAN

 
	
  

 	
  

 	
  

 
	
  

 	
 The Borrower
 hereby represents and warrants to the Lender that the Loan was made for
 commercial or business purposes, and that the funds evidenced by this Note
 will be used solely in connection with such purposes.

 
	
  

 	
  

 	
  

 
	
 21.

 	
 REPLACEMENT
 OR BIFURCATION OF NOTE

 
	
  

 	
  

 	
  

 
	
  

 	
 If this Note
 is lost or destroyed, the Borrower shall, at the Lender’s request, execute
 and return to the Lender a replacement promissory note identical to this
 Note, provided the Lender delivers to the Borrower an affidavit to the
 foregoing effect. Upon delivery of the executed replacement note, the Lender
 shall indemnify the Borrower from and against its actual damages suffered as
 a result of the existence of two Notes evidencing the same obligation. No
 replacement of this Note under this Section shall result in a novation of the
 Borrower’s obligations under this Note. In addition, the Lender may at its
 sole and absolute discretion require that the Borrower execute and deliver
 two separate promissory notes, which shall replace this Note as evidence of
 the Borrower’s obligations. The two replacement notes shall, taken together,
 evidence the exact obligations set forth in this Note. The replacement notes
 shall be independently transferable. If this Note is so replaced, the Lender
 shall return this Note to the Borrower marked to evidence its cancellation.

 
	
  

 	
  

 	
  

 
	
 22.

 	
 GOVERNING
 LAW

 
	
  

 	
  

 	
  

 
	
  

 	
 This Note
 shall be construed and enforced according to, and governed by, the laws of
 Texas without reference to conflicts of laws provisions which, but for this
 provision, would require the application of the law of any other
 jurisdiction.

 
	
  

 	
  

 	
  

 
	
 23.

 	
 TIME OF
 ESSENCE

 
	
  

 	
  

 	
  

 
	
  

 	
 In the
 performance of the Borrower’s obligations under this Note, time is of the
 essence.

 
	
  

 	
  

 	
  

 
	
 24.

 	
 AGREEMENT
 CONCERNING INTEREST

 
	
  

 	
  

 	
  

 
	
  

 	
 24.1

 	
 Definitions

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 As used in
 this Note, 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 federal law, if it permits a higher rate). “Charges” means all
 fees, charges, and any other things of value, if any, that are contracted
 for, charged, received, taken or reserved pursuant to this Note, any of the
 other Loan Documents, or any other conversation or writing between the Lender
 and the Borrower in connection with the Loan (whether in connection with the
 acceleration by the Lender of the maturity of the Indebtedness, in connection
 with any voluntary prepayment of the Indebtedness, or otherwise, and
 including fees for the forbearance of any enforcement action or for the
 extension or modification of the Loan) which are treated as interest under
 applicable law. The term “Indebtedness” shall mean any and all debt paid or
 payable by the Borrower to the Lender pursuant to this Note, the Loan
 Documents or any other 

 






	
 

	
 

	
 


	
 Promissory Note

 	
 -8-

 	
  

 
	
 Preston Royal Village,
 Dallas, Texas

 	
  

 	
  

 
	
 AEGON Loan No. 10512155

 	
  

 	
  

 













	
  

 	
  

 	
  

 
	
  

 	
  

 	
 communication
 or writing by or between the Borrower and the Lender relating to the Loan.

 
	
  

 	
  

 	
  

 
	
  

 	
 24.2

 	
 Savings Clause

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 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 governing the
 maximum rate or amount of interest payable on the Note or the Indebtedness
 (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). If the applicable law is ever judicially
 interpreted so as to render usurious any amount (i) contracted for, taken,
 reserved or received pursuant to the Note, any of the other Loan Documents or
 any 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, taken, reserved or received by
 reason of the Lender’s exercise of the option to accelerate the maturity of
 the Note and/or the Indebtedness, or (iii) Borrower will have paid or Lender
 will have received by reason of any prepayment by Borrower of the Note and/or
 the 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
 cancelled, ab initio, and all
 amounts in excess of the Maximum Lawful Rate theretofore collected by Lender
 shall be credited on the principal balance of the Note and/or the Indebtedness
 (or, if the Note and all Indebtedness have been or would thereby be paid in
 full, refunded to Borrower), and the provisions of the Note and the other
 Loan Documents shall 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 the Note
 has been paid in full before the end of the stated term of the 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 the Note
 and/or any Indebtedness then owing by Borrower to Lender. Borrower hereby
 agrees that as a condition precedent to any claim or counterclaim (in which
 event such proceeding shall be abated for such time period) 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 the Lender shall have sixty (60) days after receipt of the
 Notice to correct such usury violation, if any, by either refunding such
 excess interest to Borrower or crediting such excess interest against the
 Note and/or the Indebtedness then owing by Borrower to Lender. All sums
 contracted for, charged, taken, reserved or received by Lender for the use,
 forbearance or detention of any debt evidenced by the Note and/or the
 Indebtedness shall, to the extent permitted by applicable law, be amortized
 or spread, using the actuarial method, throughout the stated term of the Note
 and/or the Indebtedness (including any and all renewal and extension periods)
 until payment in full so that the rate or amount of interest on account of
 the Note and/or the Indebtedness does not exceed the Maximum Lawful Rate from
 time to time in effect and applicable to the Note and/or the 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 

 






	
 

	
 

	
 


	
 Promissory Note

 	
 -9-

 	
  

 
	
 Preston Royal Village,
 Dallas, Texas

 	
  

 	
  

 
	
 AEGON Loan No. 10512155

 	
  

 	
  

 













	
  

 	
  

 	
  

 
	
  

 	
  

 	
 revolving
 triparty accounts) apply to the Note and/or any of the 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.

 
	
  

 	
  

 	
  

 
	
  

 	
 24.3

 	
 Ceiling Election

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 To the
 extent that the Lender is relying on Chapter 303 of the Texas Finance Code to
 determine the Maximum Lawful Rate payable on the Indebtedness, the Lender
 will utilize the weekly ceiling from time to time in effect as provided in such
 Chapter 303, as amended. To the extent federal law permits the Lender to
 contract for, charge, take, receive or reserve a greater amount of interest
 than under Texas law, the Lender will rely on 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, the 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 the Borrower
 as provided by applicable law now or hereafter in effect.

 
	
  

 	
  

 	
  

 
	
 25.

 	
 NO ORAL
 AGREEMENTS

 
	
  

 	
  

 	
  

 
	
  

 	
 THIS NOTE AND ALL THE OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE
 AGREEMENT OF THE BORROWER AND THE LENDER AND SUPERSEDE ANY AND ALL PRIOR
 COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN
 OR ORAL, RELATING TO THE LOAN AND MAY NOT BE CONTRADICTED OR VARIED BY
 EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR
 DISCUSSIONS OF THE BORROWER AND THE LENDER. THERE ARE NO ORAL AGREEMENTS
 BETWEEN THE BORROWER AND THE LENDER. THE PROVISIONS OF THIS NOTE AND THE
 OTHER LOAN DOCUMENTS MAY BE AMENDED OR REVISED ONLY BY AN INSTRUMENT IN
 WRITING SIGNED BY THE BORROWER AND THE LENDER.

 



IN WITNESS WHEREOF, the
Borrower has caused this Note to be duly executed as of the Effective Date.


	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 AMREIT
 PRESTON ROYAL, LP, a Texas 

 limited partnership

 
	
  

 
	
  

 	
 By:

 	
 AmREIT
 Preston Royal GP, LLC, a Texas limited liability company

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:  

 	
 /s/ Brett Treadwell

 
	
  

 	
  

 	
 Name:  

 	
 Brett Treadwell

 
	
  

 	
  

 	
 Title:  

 	
 Vice President

 






	
 

	
 

	
 


	
 Promissory Note

 	
 -10-

 	
  

 
	
 Preston Royal Village,
 Dallas, Texas

 	
  

 	
  

 
	
 AEGON Loan No. 10512155