Document:

EXHIBIT
10.3

PURCHASE
AGREEMENT

AND
ESCROW INSTRUCTIONS

Between

AMREIT
WOODLAKE POINTE I, LP

as
Seller

and

SERIES
C, LLC

as
Buyer

April
5, 2013

PURCHASE
AGREEMENT AND ESCROW INSTRUCTIONS

	
  

 	
  

 
	
 DATED:

 	
 Dated to be effective as of the last of the manual signatures by
 Seller and Buyer as parties to this Agreement (the “Effective Date”).

 
	
  

 	
  

 
	
 PARTIES:

 	
 This Purchase Agreement and Escrow Instructions is between AMREIT
 WOODLAKE POINTE I, LP a Texas limited partnership, as “Seller”, and
 SERIES C, LLC, an Arizona limited liability company, as “Buyer”.

 

          WHEREAS, as
of the Effective Date, Seller is the fee title owner of that certain improved
property located at 9603 Westheimer Road, Houston, Texas, as legally described
on Exhibit A attached hereto (the “Real Property”);

          WHEREAS, as
of the Effective Date, the Real Property is improved with a building containing
approximately 45,000 square feet (the “Building”) which Real Property
and Building are leased to L.A. Fitness International, LLC, a California limited
liability company (“Tenant”) in accordance with a written lease (the “Lease”).
The Real Property, the Building, the improvements to the Real Property (the “Improvements”),
the personal property, if any, of Seller located on the Real Property and Seller’s
interest in the Lease and all rents issued and profits due or to become due
thereunder are hereinafter collectively referred to as the “Property”;
and

          WHEREAS,
Buyer desires to purchase the Property from Seller and Seller desires to sell
the Property to Buyer free and clear of all liens, all as more particularly set
forth in this Purchase Agreement and Escrow Instructions (the “Agreement”).

          NOW
THEREFORE, in consideration of the promises set forth in this Agreement and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Seller and Buyer (each, a “Party” and,
collectively, the “Parties”) hereby agree as follows:

          1.     INCORPORATION
OF RECITALS. All of the foregoing Recitals are hereby incorporated as
agreements of the Parties.

          2.     BINDING
AGREEMENT. This Agreement constitutes a binding agreement between Seller
and Buyer for the sale and purchase of the Property subject to the terms set
forth in this Agreement. Subject to the limitations set forth in this
Agreement, this Agreement shall bind and inure to the benefit of the Parties
and their respective successors and permitted assigns. This Agreement
supersedes all other written or verbal agreements between the Parties
concerning any transaction embodied in this Agreement. No claim of waiver or
modification concerning any provision of this Agreement shall be made against a
Party unless based upon a written instrument signed by such Party.

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          3.     INCLUSIONS
IN PROPERTY.

                 (a)      The
Property. The term “Property” shall also include the following:

                           (1)     all
tenements, hereditaments and appurtenances pertaining to the Real Property;

                           (2)     all
mineral, water and irrigation rights of Seller, if any, running with or
otherwise pertaining to the Real Property;

                           (3)     all
interest, if any, of Seller in any road adjoining the Real Property;

                           (4)     all
interest, if any, of Seller in any award made or to be made or settlement in
lieu thereof for damage to the Property by reason of condemnation, eminent
domain or exercise of police power;

                           (5)     all
of Seller’s interest in the Building, the Improvements and any other
improvements and fixtures on the Real Property;

                           (6)     all
of Seller’s interest, if any, in any equipment, machinery and personal property
on or used in connection with the Real Property (the “Personalty”);

                           (7)     the
Lease and security deposit, if any, now or hereafter due thereunder; and,

                           (8)     all
of Seller’s interest, to the extent transferable, in all permits and licenses
(the “Permits”), warranties (the “Warranties”), contractual
rights and intangibles (including rights to the name of the Improvements as
well as all construction contracts, subcontracts, architectural/engineering
plans and/or agreements and similar agreements) with respect to the design,
development, construction, operation, maintenance, repair and/or improvement of
the Property (collectively, the “Contracts”). 

                 (b)     The Transfer Documents. All of Seller’s
interest, if any, in the Personalty shall be transferred by that certain bill
of sale from Seller to Buyer, the agreed upon form of which is attached hereto
as Exhibit B (the “Bill of Sale”); the Lease shall be transferred by
that certain assignment and assumption of lease, the agreed upon form of which
is attached hereto as Exhibit C (the “Assignment of Lease”); all of (i)
the Required Items (as defined below), to the extent assignable, and
(ii) Seller’s interest, if any, to the extent transferrable, in the other
Permits, Warranties and Contracts shall be transferred by that certain
assignment and assumption agreement, the agreed upon form of which is attached
hereto as Exhibit D (the “Assignment Agreement”); and the Real Property,
the Building and the Improvements shall be transferred and conveyed by
execution and delivery of Seller’s special warranty deed, the agreed upon form
of which is attached hereto as Exhibit E (the “Deed”). The Bill of Sale,
the Assignment of Lease, the Assignment Agreement and the Deed are hereinafter
collectively referred to as the “Transfer 

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Documents”. Notwithstanding the foregoing, in
the event transfer of any Warranty that is not a Required Item requires the
approval of the applicable warrantor and/or satisfaction of any other
conditions to such transfer, Seller shall use commercially reasonable efforts
to obtain such approval and satisfy all such conditions no later than COE (as
defined below), including, without limitation, payment of any fees relating
thereto. The roof warranty for the Improvements and any warranties for Tenant’s
Work (as defined in the Lease) that have been assigned to Seller are
collectively referred to as the “Required Items.”

          4.     PURCHASE
PRICE. The price to be paid by Buyer to Seller for the Property is Twelve
Million and No/100 DOLLARS ($12,000,000.00) (the “Purchase Price”),
payable as follows:

                 (a)     One
Hundred Fifty Thousand and No/100 Dollars ($150,000.00) earnest money (said
deposit, together with any and all interest earned or accrued thereon, the “Earnest
Money Deposit”) to be deposited in escrow with First American Title
National Commercial Services, The Esplanade Commercial Center, 2425 E.
Camelback Road, Suite 300, Phoenix, Arizona 85016, Attention: Brandon Grajewski
(“Escrow Agent”) not later than five (5) business days following the
receipt by Escrow Agent of a fully-executed original of this Agreement (said
receipt by Escrow Agent of both a fully-executed original of this Agreement and
the Earnest Money Deposit, the “Opening of Escrow”), which Earnest Money
Deposit is to be held by Escrow Agent until released to Seller or Buyer as
provided herein or paid to Seller at close of escrow (“COE”); and

                 (b)     One Hundred
Fifty Thousand and No/100 Dollars ($150,000.00) additional earnest money to be
deposited in escrow with Escrow Agent two (2) business days after the
expiration of the Study Period (defined below). For purposes of this Agreement,
the additional earnest money deposit shall be added to and become a part of the
Earnest Money Deposit; and

                 (c)     Eleven
Million Seven Hundred Thousand and No/100 Dollars ($11,700,000.00) in
additional cash, or other immediately available funds (as may be increased or
decreased by such sums as are required to take into account any additional
deposits, prorations, credits, or other adjustments required by this
Agreement), to be deposited in escrow with Escrow Agent on or before COE, which
sum is to be held by Escrow Agent until cancellation of this Agreement as
provided herein or paid to Seller at COE.

          5.     DISPOSITION
OF EARNEST MONEY DEPOSIT. Seller and Buyer hereby instruct Escrow Agent to
place the Earnest Money Deposit in a federally insured interest-bearing
passbook account on behalf of Seller and Buyer. The Earnest Money Deposit shall
be applied as follows:

                 (a)     if
Buyer cancels this Agreement as Buyer is so entitled to do as provided in this
Agreement, the Earnest Money Deposit shall be paid immediately to Buyer;

                 (b)     if
the Earnest Money Deposit is forfeited by Buyer pursuant to this Agreement,
such Earnest Money Deposit shall be paid to Seller as Seller’s agreed and total

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liquidated damages, it being acknowledged and agreed that it would be
difficult or impossible to determine Seller’s exact damages; and

                 (c)     if
escrow closes, the Earnest Money Deposit shall be credited to Buyer,
automatically applied against the Purchase Price and paid to Seller at COE.

          6.     PRELIMINARY
TITLE REPORT AND OBJECTIONS. Within ten (10) days after the Opening of
Escrow, Escrow Agent shall deliver a current Preliminary Title Report (the “Report”)
for a TLTA extended coverage title insurance policy (the “Owner’s Policy”)
on the Property to Buyer and Seller. The Report shall show the status of title
to the Property as of the date of the Report and shall also describe the
requirements of Escrow Agent for the issuance of the Owner’s Policy as
described herein. The cost of the Owner’s Policy shall be paid by the Seller;
provided, however, that any additional costs for an extended coverage policy,
endorsements thereto (excluding, however, those endorsements required to cure
one or more Objectionable Matters (as hereinafter defined) which Seller has
agreed to cure, which endorsements shall be issued at Seller’s sole cost and
expense), and any lender’s title policy shall be paid by Buyer. In addition to
the Report, Escrow Agent shall simultaneously deliver to Buyer legible copies
of all documents identified in Schedule B of the Report. In connection with
this Section 6, if Buyer has not received the Report within ten (10) days after
the Opening of Escrow, Buyer will be deemed to have received the Report on the
eleventh (11th) day after the Opening of Escrow.

          If Buyer is
dissatisfied with any exception to title as shown in the Report and/or any
matter disclosed by the Survey (collectively, the “Objectionable Matters”),
then Buyer may either, by giving written notice thereof to Seller and Escrow
Agent on or before expiration of the Study Period (as defined below), (a)
cancel this Agreement, whereupon the Earnest Money Deposit shall be returned to
Buyer together with all documents deposited in escrow by Buyer, or (b)
provisionally accept the title subject to Seller’s agreement to cause the
removal of or otherwise cure the Objectionable Matters. Seller shall notify
Buyer in writing within seven (7) days after receiving Buyer’s written notice
of Objectionable Matters, if Seller does not intend to remove (or cause the
Escrow Agent to endorse over, to Buyer’s satisfaction) or otherwise cure any
such Objectionable Matters. Seller’s lack of response shall not be a breach of
this Agreement, but shall be deemed as Seller’s election not to remove or
otherwise cure the Objectionable Matters prior to COE. If written notice of
dissatisfaction is not timely given by Buyer to Seller pursuant to this Section
6, then Buyer shall be deemed to have disapproved of the condition of the title
of the Property as shown by the Report, and shall have elected to terminate
this Agreement, whereupon the Earnest Money Deposit shall be returned to Buyer
and all other obligations under this Agreement shall terminate. 

          In the
event the Report is amended to include new exceptions that are not set forth in
a prior Report, Buyer shall have until the later of (i) the expiration of the
Study Period, or (ii) the date that is five (5) business days after Buyer’s
receipt of the amended Report and copies of the documents identified in the new
exceptions or new requirements, within which to cancel this Agreement and
receive a refund of the Earnest Money Deposit or to provisionally accept the
title subject to Seller’s agreement to cause the removal of or otherwise cure
the Objectionable Matters. Seller shall notify Buyer in writing within seven
(7) days after receiving Buyer’s 

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written notice of disapproval or objection, if Seller does not intend
to remove (or cause the Escrow Agent to endorse over, to Buyer’s satisfaction)
or otherwise cure any such additional Objectionable Matters. Seller’s lack of
response shall be deemed as Seller’s election not to remove or otherwise cure
the Objectionable Matters prior to COE. 

          If Seller
serves notice to Buyer that Seller does not intend to remove or otherwise cure
the Objectionable Matters before COE, or Seller does not timely give such
notice, Buyer shall, within seven (7) days thereafter, notify Seller and Escrow
Agent in writing of Buyer’s election to either (i) terminate this Agreement,
whereupon the Earnest Money Deposit shall be returned to Buyer and all other
obligations under this Agreement shall terminate, or (ii) waive such
Objectionable Matters and the transaction shall close as scheduled. If Seller
agrees to remove or otherwise cure the Objectionable Matters but fails or is
unable to do so by the scheduled COE date, or if Buyer otherwise receives
notice that Seller has failed or refused to remove or otherwise cure the
Objectionable Matters which Seller has agreed to cure, Buyer shall, within seven
(7) days of either said COE date or its receipt of notice of such failure or
inability, whichever is earlier, notify Seller and Escrow Agent in writing of
Buyer’s election, as its sole and exclusive remedy, to either (i) declare
Seller to be in default under this Agreement and terminate this Agreement,
whereupon the Earnest Money Deposit shall be returned to the Buyer, Seller
shall promptly reimburse Buyer for all reasonable out-of-pocket costs incurred
by Buyer from and after the date that Seller agreed to cure such Objectionable
Matters until the date of Seller’s default, such amount not to exceed the sum
of $50,000.00 (provided, however, that the obligation to reimburse Buyer for
its out-of-pocket costs shall only arise upon Seller’s receipt of reasonably
satisfactory evidence of such costs) and all other obligations under this
Agreement shall terminate, or (ii) waive such Objectionable Matters whereupon
the transaction shall close five (5) business days after Buyer notifies Seller
of such election. If written notice of such election is not timely given by
Buyer pursuant to the foregoing sentence, then Buyer shall be deemed to have
elected to terminate this Agreement as set forth in such sentence. The Parties
hereby acknowledge and agree that Buyer’s remedies for a Seller default under
this Section 6 shall be governed by this Section 6 rather than by Section
20(a).

          7.     BUYER’S
STUDY PERIOD.

                 (a)     The
Study Period. Buyer shall have until 5:00 p.m. CST on the thirtieth (30th)
day after the Effective Date (the “Study Period”), at Buyer’s sole cost,
within which to conduct and approve any investigations, studies or tests deemed
necessary by Buyer, in Buyer’s sole discretion, to determine the feasibility of
acquiring the Property, including, without limitation, Buyer’s right to: (i)
review and approve the Survey (as hereinafter defined), the Lease, Seller’s
operating statements with respect to the Property, and the Contracts; (ii) meet
and confer with Tenant; and, (iii) obtain, review and approve an environmental
study of the Real Property and Building (collectively, “Buyer’s Diligence”).
All such inspections, tests and examinations are to be conducted in a manner so
as not to physically damage the Property and, in any event, the Property shall
be restored by Buyer substantially to its condition at the time of entry of
Buyer at Buyer’s sole cost. Neither Buyer nor any of its agents or
representatives shall conduct any invasive physical testing, drilling, boring,
sampling or removal of, on or through the surface of the Property (or any part
or portion thereof) without Seller’s prior written consent, which consent shall
not be unreasonably withheld.

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                 (b)     Right
of Entry. Subject to the prior rights of the Tenant in the Property, Seller
hereby grants to Buyer and Buyer’s agents, employees and contractors the right
to enter upon the Property, at any time or times prior to COE (but during
normal business hours), subject to reasonable advance notice to Seller of not
less than 24 hours, to conduct Buyer’s Diligence. In consideration therefor,
Buyer shall and does hereby agree to release, indemnify, defend and hold
Seller, Tenant and all of Seller’s principals, officers, representatives,
employees and agents harmless from and against any and all claims for expenses,
costs, losses, liabilities and/or damages asserted against Seller, including,
but not limited to, court costs and attorneys’ fees, which may be incurred by
Seller as a result of Buyer’s Diligence, including, but not limited to, holding
the Real Property and Seller harmless and free from any mechanic’s or
materialmen’s lien arising out of such activities; provided, however, Buyer
shall have no duty to release, indemnify, defend or hold harmless Seller,
Tenant nor any of Seller’s principals, officers, representatives, employees or
agents with respect to any claim arising out of or relating to such party’s
negligence or intentional acts. Buyer’s indemnity and hold harmless obligation
shall survive cancellation of this Agreement or COE. Buyer shall obtain and
maintain (i) commercial general liability insurance covering such entries by
Buyer, with limits of not less than $1,000,000 per occurrence and $2,000,000
combined single limit naming Seller as an additional insured, and (ii) worker’s
compensation insurance coverage with limits not less than required by
applicable statutes, and shall provide one or more certificates evidencing such
coverage to Seller prior to Buyer’s entry onto the Property.

          During the
performance of any inspections or studies of the Property, Buyer and its agents
and representatives shall use commercially reasonable and good faith efforts
not to (a) unreasonably disturb Tenant or materially interfere with its use of
the Property in accordance with the Lease; (b) interfere with the operation and
maintenance of the Property undertaken in accordance with the Lease; (c) damage
any part of the Property or any personal property owned or held by Tenant; (d)
cause injury or bodily harm to Seller, its agents, contractors and employees or
Tenant; (e) permit any liens to attach to the Property by reason of the
exercise of Buyer’s rights hereunder; or (f) reveal or disclose any information
obtained during the Study Period concerning the Property to anyone other than
as authorized herein.

          If Buyer
desires to interview Tenant, Buyer shall notify Seller of such intent, in
writing, prior to the expiration of the Study Period. Upon receipt of Buyer’s
written notice, Seller shall attempt to schedule such interview with Tenant
within a reasonable time thereafter. Seller shall have the right to have one of
its agents or representatives present at any such Tenant interview; provided,
however, in no event shall Seller’s election not to or failure to have such an
agent or representative present at any such Tenant interview in any way modify,
limit, restrict, prohibit or prevent Buyer’s rights under this Section 7.

                 (c)     Cancellation. Unless Buyer so notifies
Seller and Escrow Agent, in writing, on or before the end of the Study Period
of Buyer’s acceptance of Buyer’s Diligence and waiver of the contingencies as
set forth in this Section 7, this Agreement shall be canceled and the Earnest
Money Deposit shall be returned immediately to Buyer and, except as otherwise
provided in this Agreement, neither of the Parties shall have any further
liability or obligation under this Agreement, except those obligations which
expressly survive the cancellation of this 

7

Agreement. If Buyer does not terminate this Agreement pursuant to this
Section 7(c), the Earnest Money Deposit shall be non-refundable to Buyer in all
respects, except as otherwise expressly provided in this Agreement.

                 (d)     Tenant
Right of First Refusal or Right of First Offer. Notwithstanding the fact
that the Lease may contain a tenant right of first refusal or right of first
offer (either such right, a “ROFR”), Buyer hereby agrees that the Study
Period shall commence and run as set forth in Section 7(a) above, and commencement
thereof shall not be tolled pending receipt of a written waiver of such ROFR by
Tenant; provided, however, that in return therefor, Seller hereby agrees that,
in the event Tenant does give notice of its intent to exercise the ROFR or does
actually exercise the ROFR, Seller shall promptly reimburse to Buyer all
reasonable out-of-pocket and third-party property diligence expenses incurred
by Buyer, including, without limitation, reasonable attorneys’ fees and costs,
such amount not to exceed the sum of $50,000.00 (provided, however, that the
obligation to reimburse Buyer for its out-of-pocket costs shall only arise upon
Seller’s receipt of reasonably satisfactory evidence of such costs).

          8.     DELIVERY
OF SELLER’S DILIGENCE MATERIALS. Seller agrees to deliver to Buyer, on or
prior to the Effective Date, all information in Seller’s possession or control
relating to the leasing, operating, maintenance, construction (including the
Certificate of Occupancy for the Property), repair, zoning (including any
zoning verification letters), platting, engineering, soil tests, water tests,
environmental tests, market studies, master planning, architectural drawings
and like matters regarding the Property and/or the Tenant (collectively, “Seller’s
Diligence Materials”), all at no cost to Buyer. The foregoing deliveries
shall include, but not be limited to, copies of all: (i) books of account and
records for the Property for the last twenty-four (24) months (including
year-end Tenant CAM expense reconciliations); (ii) the Lease, including all
amendments thereto, guaranties thereof and assignments thereof and, to the
extent the landlord is obligated to deliver such a policy to Tenant under the
Lease, a copy of the leasehold title insurance policy; (iii) a detailed listing
of all capital expenditures on the Property for the last thirty-six (36)
months; (iv) the maintenance history of the Property for the last twenty-four
(24) months; (v) current maintenance, management, and listing contracts for the
Property including any amendments thereto; (vi) all claims or suits by Tenant
or third parties involving the Property or the Lease or any Contracts (whether
or not covered by insurance); (vii) a list of all claims or suits by or against
Seller regarding the Property for the last thirty-six (36) months; (viii) the
site plan with respect to, and Seller’s most recent survey of, the Property;
(ix) copies of all Contracts, Warranties and Permits; and (x) any other
documents or other information in the possession of Seller or its agents
pertaining to the Property that would reasonably be considered by an
experienced purchaser to be material to that purchaser’s decision to acquire
the Property. Should Seller receive new or updated information regarding any of
the matters set forth in this Section 8 after the Effective Date and prior to
COE, Seller will immediately notify Buyer of such fact and will promptly
deliver complete copies thereof to Buyer.

          Seller
makes no representations or warranties of any kind regarding the accuracy,
thoroughness or completeness of or conclusions drawn in the information
contained in the Seller’s Diligence Materials; provided, however, that Seller
does hereby represent and warrant to Buyer that it has no actual knowledge of
any inaccuracy therein or incompleteness thereof. 

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Buyer agrees and acknowledges that any and all of Seller’s Diligence
Materials will be made available or delivered to Buyer solely to assist Buyer
in determining the feasibility of purchasing the Property. Buyer agrees not to
disclose Seller’s Diligence Materials, or any of the provisions, terms or
conditions thereof, to any party other than Buyer and Buyer’s agents,
principals, officers, employees, lenders, consultants and attorneys that are
responsible for determining the feasibility of Buyer’s acquisition of the
Property, financing of any portion of the Purchase Price and for preparation
and revision of documents to consummate the closing hereof. If this Agreement
is terminated, Buyer shall certify to Seller that Buyer has destroyed Seller’s
Diligence Materials; provided, however, Buyer (x) will be entitled to retain
one copy of Seller’s Diligence Materials for compliance purposes or for the
purposes of defending or maintaining litigation or threatened litigation, and
(y) will not be obligated to erase Seller’s Diligence Materials that is
contained in an archived computer system made in accordance with its security
and/or disaster recovery procedures. 

           9.     THE
SURVEY. Promptly after the Opening of Escrow, Buyer, at Buyer’s cost, shall
cause a surveyor licensed in the State of Texas to complete and deliver to
Escrow Agent and Buyer a current, certified ALTA As-Built survey of the Real
Property, Building and Improvements (the “Survey”), whereupon the legal
description in the Survey shall control over the description in Exhibit A
attached hereto to the extent they may be inconsistent. The Survey shall set
forth the legal description and boundaries of the Property and all easements,
encroachments and improvements thereon. The Survey shall be certified to Buyer,
Seller and the title company issuing the Owner’s Policy.

          10.    IRS
SECTION 1445. Seller shall furnish to Buyer in escrow by COE a sworn
affidavit (the “Non-Foreign Affidavit”) stating under penalty of perjury
that Seller is not a “foreign person” as such term is defined in Section
1445(f)(3) of the Internal Revenue Code of 1986, as amended (the “Tax Code”).
If Seller does not timely furnish the Non-Foreign Affidavit, Buyer may withhold
(or direct Escrow Agent to withhold) from the Purchase Price an amount equal to
the amount required to be so withheld pursuant to Section 1445(a) of the Tax
Code, and such withheld funds shall be deposited with the Internal Revenue
Service as required by such Section 1445(a) and the regulations promulgated
thereunder. The amount withheld, if any, shall nevertheless be deemed to be
part of the Purchase Price paid to Seller.

          11.    DELIVERY
OF POSSESSION. Seller shall deliver possession of the Property to Buyer at
COE subject only to the rights of Tenant under the Lease as approved by Buyer
as part of Buyer’s Diligence.

          12.    BUYER’S
CONDITIONS PRECEDENT. In addition to all other conditions precedent set
forth in this Agreement, Buyer’s obligations to perform under this Agreement
and to close escrow are expressly subject to the following:

                 
(a)     the delivery by Seller to Escrow Agent, for
delivery to Buyer at COE, of the executed original Transfer Documents;

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                 (b)     the
issuance of the Owner’s Policy (or a written commitment therefor) subject only
to those matters approved or deemed approved by Buyer pursuant to this
Agreement;

                 (c)     the
delivery by Seller to Buyer at COE of all security deposits and pre-paid/abated
rents under the Lease, if any, in the form of a credit in favor of Buyer
against the Purchase Price;

                 (d)     the
deposit by Seller with Buyer not later than five (5) days prior to COE of (i)
an original estoppel certificate, in a form reasonably acceptable to Buyer (v)
dated not more than thirty (30) days prior to COE, (w) executed by Tenant and
naming Buyer (or its designee) and any lender of which Buyer provides written
notice to Seller pursuant to the notice provisions hereof prior to the end of
the Study Period (“Lender”) as addressees, (x) verifying the basic facts
of the Lease (term, rental, expiration date, options, if any exist), (y)
confirming that there are no defaults by the landlord under the Lease and that
no percentage rents or impounds are paid pursuant to the Lease (or specifying
the amount(s) thereof), and (z) if Tenant’s obligations under the Lease have
been guaranteed by another person or entity, also cover such guaranty and also
be signed by such guarantor(s), (ii) a subordination, non-disturbance and
attornment agreement executed by Tenant, in form and substance reasonably
acceptable to Tenant, for the benefit of Lender, and (iii) an original estoppel
certificate executed by all other parties to any applicable reciprocal easement
agreement or declaration of covenants, conditions and/or restrictions (the “REA’s”)
and addressed or certified to Buyer and Lender stating that such instrument is
in full force and effect and is not modified (except as disclosed in such
estoppel certificate) and, to the best knowledge of the party giving the
estoppel, the other party or parties thereto is/are not in default under the
applicable instrument and all amounts, if any, owing under the applicable
agreement have been paid in full;

                 (e)     if
applicable, the deposit with Escrow Agent and Buyer prior to the expiration of
the Study Period of an executed waiver by Tenant of any right of first refusal
under the Lease;

                 (f)      the
deposit with Escrow Agent of an executed affidavit of Seller or, if Seller is a
single-asset entity, of Seller’s principals or parent entity, and such other
documentation as may be reasonably required by Escrow Agent to allow for the
deletion of the mechanics’ lien exception from the Owner’s Policy;

                 (g)     the
delivery by Seller to Buyer of the final Certificate of Occupancy for the
Improvements;

                 (h)     the
deposit with Escrow Agent of a letter from Seller to Tenant requesting that
future rent under the Lease be paid to Buyer; 

                 (i)      reserved;

                 (j)      there
has been no “Insolvency Event” with respect to the Tenant. As used in this
subsection (j), an “Insolvency Event” shall have occurred if the Tenant becomes insolvent within the meaning of the
United States Bankruptcy Code, 11 U.S.C. Sec. 101 et seq., as amended 

10

(the “Bankruptcy Code”), files or
notifies Seller or any affiliate of Seller that it intends to file a petition
under the Bankruptcy Code, initiates a proceeding under any similar law or
statute relating to bankruptcy, insolvency, reorganization, winding up or
adjustment of debts (collectively, hereinafter, an “Action”), becomes
the subject of either a petition under the Bankruptcy Code or an Action, or is
not generally paying its debts as the same become due;

                 (k)      reserved;

                 (l)       delivery
to Buyer of the original, fully-executed Lease, and a copy of all guaranties
thereof, all exhibits, amendments and other modifications thereto, and, if
Seller is not the original landlord under the Lease, all assignments necessary
to establish that Seller is the successor-in-interest to the landlord’s rights
under the Lease; and

                 (m)     delivery
to Buyer of originals of the Contracts, Warranties and Permits, if any, in the
possession of Seller or Seller’s agents, including, without limitation, any
warranties covering the roof or any other part of the Improvements, and any
correspondence with respect thereto, together with such non-proprietary leasing
and property manuals, files and records which are material in connection with
the continued operation, leasing and maintenance of the Property.

If the foregoing conditions have not been satisfied by the specified
date or COE as the case may be, then Buyer shall have the right, at Buyer’s
sole option, by giving written notice to Seller and Escrow Agent, to (i) cancel
this Agreement, whereupon the Earnest Money Deposit shall be paid immediately
by Escrow Agent to Buyer and, except as otherwise provided in this Agreement,
neither of the Parties shall have any further liability or obligation under
this Agreement, or (ii) extend such specified date or COE, as applicable, for
such amount of time as Buyer deems reasonably necessary to allow Seller to
satisfy such conditions; provided however, unless otherwise agreed by the
Parties, this Agreement shall be deemed cancelled as provided in (i) above if
the foregoing conditions have not been satisfied on or before twenty (20) days
after the initially scheduled COE. 

          13.    SELLER’S
REPRESENTATIONS WARRANTIES AND COVENANTS. 

                  (a)     Seller
hereby represents and warrants to Buyer as of the Effective Date and again as
of COE that:

                           (i)     to
Seller’s knowledge, there are no unrecorded leases (other than the Lease),
liens or encumbrances which may affect title to the Property; any existing
financing secured by the Property or any part thereof shall be satisfied and discharged
in full at or prior to COE and any liens or encumbrances relating thereto shall
be terminated and released of record at or prior to COE;

                           (ii)     Seller
has not received any written notice of any violation with regard to any
applicable regulation, ordinance, requirement, covenant, condition or restriction
relating to the present use or occupancy of the Property by any person,
authority or agency having jurisdiction;

11

                         (iii)     Seller
has not received any written notice of any intended public improvements which
will or could result in any charges being assessed against the Property which
will result in a lien upon the Property;

                         (iv)     Seller
has not received any written notice of any impending or contemplated
condemnation or taking by inverse condemnation of the Property, or any portion
thereof, by any governmental authorities;

                         (v)      there
are no suits or claims pending or to Seller’s knowledge, threatened with
respect to or in any manner affecting the Property or the Tenant, nor does
Seller know of any circumstances which should or could reasonably form the
basis for any such suits or claims which have not been disclosed in writing to
Buyer by Seller;

                         (vi)     Seller
has not entered into and, to Seller’s knowledge, there is not existing any
other agreement, written or oral, under which Seller is or could become
obligated to sell the Property, or any portion thereof, to a third party,
except as may be disclosed in the Report;

                         (vii)    Seller
has not taken any action before any governmental authority having jurisdiction
thereover, the object of which would be to change the present zoning of or other
land-use limitations, upon the Property, or any portion thereof, or its
potential use, and, to Seller’s knowledge, there are no pending proceedings,
the object of which would be to change the present zoning or other land-use
limitations;

                         (viii)   this
transaction will not in any way violate any other agreements to which Seller is
a party;

                         (ix)     Seller
has full power and authority to execute, deliver and perform under this
Agreement as well as under the Transfer Documents;

                         (x)       no
default of Seller exists under the Lease; Seller has sent no written notice of
default to Tenant and, to Seller’s knowledge, no default of Tenant exists under
the Lease; Seller has not received any notice or correspondence from Tenant or
Tenant’s agents indicating Tenant’s desire, willingness or intent to amend,
modify, assign or terminate the Lease nor any notice or correspondence
requesting the consent of Seller to any of the foregoing;

                         (xi)     Tenant
is not entitled to any free rent periods or rental abatements, concessions or
other inducements for any period subsequent to COE, except as expressly set
forth in the Lease;

                         (xii)    to
the extent Seller is the original landlord under the Lease, the Lease was
negotiated in an arms-length transaction; 

                         (xiii)   all
amounts due and payable by Seller under the Contracts and the REA’s have been
paid in full and no default of Seller exists under any of the Contracts or any
of 

12

the REA’s and, to Seller’s knowledge, no default of any other party
exists under any of the Contracts or any of the REA’s;

                         (xiv)     no
consent of any third party is required in order for Seller to enter into this
Agreement and perform Seller’s obligations hereunder;

                         (xv)      except
as set forth in Seller’s Diligence Materials, Seller has no actual knowledge
that there exists or has existed, and Seller itself has not caused any
generation, production, location, transportation, storage, treatment,
discharge, disposal, release or threatened release upon, under or about the
Property of any Hazardous Materials. “Hazardous Materials” shall mean
any flammables, explosives, radioactive materials, hazardous wastes, hazardous
and toxic substances or related materials, asbestos or any material containing
asbestos (including, without limitation, vinyl asbestos tile), or any other
substance or material, defined as a “hazardous substance” by any federal,
state, or local environmental law, ordinance, rule or regulation including,
without limitation, the Federal Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, the Federal Hazardous Materials
Transportation Act, as amended, the Federal Resource Conservation and Recovery
Act, as amended, and the rules and regulations adopted and promulgated pursuant
to each of the foregoing;

                         (xvi)     except
as set forth in Seller’s Diligence Materials, to Seller’s actual knowledge,
there is not now, nor has there ever been, on or in the Property underground
storage tanks, any asbestos-containing materials or any polychlorinated
biphenyls, including those used in hydraulic oils, electric transformers, or
other equipment;

                         (xvii)    Seller
has not received any written notice of proceedings pending for the increase of
the assessed valuation of the Real Property;

                         (xviii)   the
execution, delivery and performance of this Agreement and the Transfer
Documents have not and will not constitute a breach or default under any other
agreement, law or court order under which Seller is a party or may be bound;
and

                         (xix)     Seller
has not withheld any information within its possession or of which it is
actually aware regarding the Property or any part thereof that would reasonably
be considered by an experienced purchaser to be material to that purchaser’s
decision to acquire the Property.

                 (b)    Further,
Seller hereby covenants to Buyer as of the Effective Date that:

                         (i)         Seller
will not enter into nor execute any agreement, written or oral, under which
Seller is or could become obligated to sell the Property, or any portion
thereof, to a third party, without Buyer’s prior written consent;

                         (ii)        Seller
will not, without the prior written consent of Buyer, take any action before
any governmental authority having jurisdiction thereover, the object of which 

13

would be to change the present zoning of or other land-use limitations,
upon the Property, or any portion thereof, or its potential use;

                         (iii)     except
for any item to be prorated at COE in accordance with this Agreement or the
sole responsibility of Tenant under the Lease, all bills or other charges,
costs or expenses arising out of or in connection with or resulting from
Seller’s use, ownership, or operation of the Property up to COE shall be paid
in full by Seller;

                         (iv)     all
general real estate taxes, assessments and personal property taxes that have
become due with respect to the Property (except for those that will be prorated
at COE or the sole responsibility of Tenant under the Lease) have been paid or
will be so paid by Seller prior to COE;

                         (v)      between
the Effective Date and COE or any earlier termination of this Agreement, Seller
shall not execute or enter into any lease with respect to the Property or any
part thereof, or terminate, amend, modify, extend or waive any rights under the
Lease without Buyer’s prior written consent, which consent may be withheld at
Buyer’s sole discretion;

                         (vi)     between
the Effective Date and COE or any earlier termination of this Agreement, Seller
shall, at its sole cost:

                                   (1)     continue
to operate the Property as heretofore operated by Seller subject to Buyer’s rights
under this Agreement to direct specific activities of Seller;

                                   (2)     maintain
or cause Tenant to maintain the Property in its current condition and perform
required and routine maintenance and make replacements of each part of the
Property that is tangible property (whether real or personal) and perform
repairs or make replacements to any broken, defective or malfunctioning portion
the Property that is tangible property (whether real or personal) as the
relevant conditions require;

                                   (3)     pay
or cause Tenant to pay (as applicable) prior to COE, except as permitted under
the Lease, all sums due for work, materials or services furnished or otherwise
incurred in the ownership, use or operation of the Property up to COE;

                                   (4)     comply
or cause Tenant to comply with all governmental requirements applicable to the
Property;

                                   (5)     except
as required by a governmental agency or tenant alterations permitted under the
Lease, not place or permit to be placed on any portion of the Property any new
improvements of any kind or remove or permit any improvements to be removed
from the Property without the prior written consent of Buyer;

                                   (6)     without
Buyer’s prior written consent, Seller shall not, by voluntary or intentional
act or omission to act, further cause or create any easement, encumbrance, or
mechanic’s or materialmen’s liens, and/or similar liens or encumbrances to 

14

arise or to be imposed upon the Premises or any portion thereof that
affects title thereto, or to allow any amendment or modification to any
existing easements or encumbrances; and

                                     (7)     cause
Tenant to comply in all material respects with the terms, covenants and
conditions of the Lease;

                         (vii)     Seller
shall and hereby does assign to Buyer, effective as of COE, all claims,
counterclaims, defenses, or actions, whether at common law, or pursuant to any
other applicable federal or state or other laws which Seller may have against
any third parties relating to the existence of any Hazardous Materials in, at,
on, under or about the Property (including Hazardous Materials released on the
Property prior to COE and continuing in existence on the Property at COE);

                         (viii)    Seller
shall not, without the prior written consent of Buyer, provide a copy of, nor
disclose any of the terms of, this Agreement to any appraiser, and Seller shall
instruct Broker that it may not provide a copy of nor disclose any of the terms
of this Agreement to any appraiser without the prior written consent of Buyer;
and

                         (ix)      should
Seller receive notice or knowledge of any information regarding any of the
matters set forth in this Section 13 after the Effective Date and prior to COE,
Seller will immediately notify Buyer of the same in writing.

               All
representations and warranties made in this Agreement by Seller shall survive
the execution and delivery of this Agreement and COE for a period of one (1)
year. Seller shall and does hereby indemnify against and hold Buyer harmless
from any loss, damage, liability and expense, together with all court costs and
attorneys’ fees which Buyer may incur, by reason of any material
misrepresentation by Seller or any breach of any of Seller’s warranties or
covenants. Seller’s indemnity and hold harmless obligations shall survive COE
as provided in this paragraph. Any claim for a breach of Seller’s
representations and warranties must be made in writing within one (1) year
following COE, and, if not resolved within thirty (30) days following such
claim, a claim must be brought in a court of competent jurisdiction within one
(1) year and thirty (30) days following COE. Notwithstanding anything contained
herein to the contrary, at any time prior to COE, if, to Buyer’s knowledge, any
representation or warranty made by Seller is not accurate in any fashion, then Buyer
shall bring such matter to the attention of Seller promptly upon discovery. If
Buyer consummates the transactions contemplated by this Agreement
notwithstanding such knowledge, Buyer shall be barred from asserting a claim
after COE that such matter constituted a breach of a representation, warranty
or covenant of Seller. As used in this Agreement, the phrase “Buyer’s
knowledge” or words of similar import shall mean the actual knowledge of Brian
Garrigan. 

          As used in
this Agreement, the phrase “to Seller’s knowledge” or words of similar import
shall mean the actual knowledge of (a) Ron Lindsey as Managing Vice President
of Development of AmREIT, and (b) Charles Scoville as Senior Vice President and
Director of Operations for AmREIT. Seller hereby represents that foregoing
persons are the individuals most familiar with the Property, its operations and
its condition and have the most 

15

comprehensive knowledge regarding the representations and warranties
set forth in this Section 13.

                    (c)     DISCLAIMER
OF REPRESENTATIONS AND WARRANTIES BY SELLER. NOTWITHSTANDING ANYTHING
CONTAINED HEREIN TO THE CONTRARY, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
OF SELLER SET FORTH IN THIS AGREEMENT AND/OR IN THE TRANSFER DOCUMENTS
(COLLECTIVELY, THE “SELLER WARRANTIES”) IT IS UNDERSTOOD AND AGREED THAT
SELLER HAS NOT MADE AND IS NOT NOW MAKING, AND SELLER SPECIFICALLY DISCLAIMS
AND BUYER WAIVES, ANY WARRANTIES, REPRESENTATIONS, OR GUARANTIES OF ANY KIND OR
CHARACTER, EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT, OR FUTURE, WITH
RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, WARRANTIES,
REPRESENTATIONS OR GUARANTIES AS TO (I) MATTERS OF TITLE (OTHER THAN SELLER’S
WARRANTY OF TITLE SET FORTH IN THE WARRANTY DEED TO BE DELIVERED AT CLOSING);
(II) ENVIRONMENTAL MATTERS RELATING TO THE PROPERTY OR ANY PORTION THEREOF;
(III) GEOLOGICAL CONDITIONS, INCLUDING, WITHOUT LIMITATION, SUBSIDENCE,
SUBSURFACE CONDITIONS, WATER TABLE, UNDERGROUND WATER RESERVOIRS, LIMITATIONS
REGARDING THE WITHDRAWAL OF WATER AND EARTHQUAKE FAULTS AND THE RESULTING
DAMAGE OF PAST AND/OR FUTURE EARTHQUAKES; (IV) WHETHER AND THE EXTENT TO WHICH,
THE PROPERTY OR ANY PORTION THEREOF IS AFFECTED BY ANY STREAM (SURFACE OR
UNDERGROUND), BODY OF WATER, FLOOD PRONE AREA, FLOOD PLAIN, FLOODWAY OR SPECIAL
FLOOD HAZARD; (V) DRAINAGE; (VI) SOIL CONDITIONS, INCLUDING THE EXISTENCE OF
INSTABILITY, PAST SOIL REPAIRS, SOIL ADDITIONS OR CONDITIONS OF SOIL FILL, OR
SUSCEPTIBILITY TO LANDSLIDES, OR THE SUFFICIENCY OF ANY UNDERSHORING; (VII)
ZONING TO WHICH THE PROPERTY OR ANY PORTION THEREOF MAY BE SUBJECT; (VIII) THE
AVAILABILITY OF ANY UTILITIES TO THE PROPERTY OR ANY PORTION THEREOF,
INCLUDING, WITHOUT LIMITATION, WATER, SEWAGE, GAS AND ELECTRIC; (IX) USAGES OF
ADJOINING PROPERTY; (X) ACCESS TO THE PROPERTY OR ANY PORTION THEREOF; (XI) THE
VALUE, COMPLIANCE WITH THE PLANS AND SPECIFICATIONS, SIZE, LOCATION, AGE, USE,
DESIGN, QUALITY, DESCRIPTION, SUITABILITY, STRUCTURAL INTEGRITY, OPERATION,
TITLE TO, OR PHYSICAL OR FINANCIAL CONDITION OF THE PROPERTY OR ANY PORTION
THEREOF, OR ANY INCOME, EXPENSES, CHARGES, LIENS, ENCUMBRANCES, RIGHTS, OR
CLAIMS ON OR AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF; (XII)
THE PRESENCE OF HAZARDOUS SUBSTANCES IN, ON, UNDER, OR IN THE VICINITY OF THE
PROPERTY; (XIII) THE CONDITION OR USE OF THE PROPERTY OR COMPLIANCE OF THE
PROPERTY WITH ANY OR ALL PAST, PRESENT OR FUTURE FEDERAL, STATE OR LOCAL
ORDINANCES, RULES, REGULATIONS, OR LAWS, BUILDING FIRE OR ZONING ORDINANCES,
CODES OR OTHER SIMILAR LAWS; (XIV) THE EXISTENCE OR NON-EXISTENCE OF
UNDERGROUND STORAGE TANKS; (XV) ANY OTHER MATTER AFFECTING THE STABILITY OR
INTEGRITY OF THE PROPERTY; (XVI) THE POTENTIAL FOR FURTHER DEVELOPMENT OF THE
PROPERTY; (XVII) THE EXISTENCE OF VESTED LAND USE, ZONING OR BUILDING 

16

ENTITLEMENTS AFFECTING THE PROPERTY; (XVIII) THE MERCHANTABILITY OF THE
PROPERTY OR FITNESS OF THE PROPERTY FOR ANY PARTICULAR PURPOSE (BUYER AFFIRMING
THAT BUYER HAS NOT RELIED ON SELLER’S SKILL OR JUDGMENT TO SELECT OR FURNISH
THE PROPERTY FOR ANY PARTICULAR PURPOSE, AND THAT SELLER MAKES NO WARRANTY THAT
THE PROPERTY IS FIT FOR ANY PARTICULAR PURPOSE); OR (XIX) TAX CONSEQUENCES
(INCLUDING, BUT NOT LIMITED TO, THE AMOUNT, USE OR PROVISIONS RELATING TO ANY
TAX CREDITS).

                    (d)     SALE
“AS IS”. EXCEPT FOR THE SELLER WARRANTIES, BUYER HAS NOT RELIED UPON AND
WILL NOT RELY UPON, EITHER DIRECTLY OR INDIRECTLY, ANY REPRESENTATION OR
WARRANTY OF SELLER OR ANY OF ITS AGENTS AND ACKNOWLEDGES THAT NO SUCH
REPRESENTATIONS HAVE BEEN MADE. BUYER REPRESENTS THAT IT IS A KNOWLEDGEABLE,
EXPERIENCED AND SOPHISTICATED BUYER OF REAL ESTATE AND, WITH THE EXCEPTION OF
ITS RELIANCE ON THE SELLER WARRANTIES, THAT IT IS RELYING SOLELY ON ITS OWN
EXPERTISE AND THAT OF BUYER’S CONSULTANTS IN PURCHASING THE PROPERTY. BUYER
WILL CONDUCT SUCH INSPECTIONS AND INVESTIGATIONS OF THE PROPERTY AS BUYER DEEMS
NECESSARY, INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL
CONDITIONS THEREOF, AND, IN ADDITION TO THE SELLER WARRANTIES, SHALL RELY UPON
SAME. UPON CLOSING, BUYER SHALL ASSUME THE RISK THAT ADVERSE MATTERS,
INCLUDING, BUT NOT LIMITED TO, ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS,
MAY NOT HAVE BEEN REVEALED BY BUYER’S INSPECTIONS AND INVESTIGATIONS AND,
EXCEPT TO THE EXTENT THAT IT CONSTITUTES A BREACH OF ONE OR MORE OF THE SELLER
WARRANTIES, HEREBY WAIVES ANY CLAIM BUYER MAY HAVE, NOW OR IN THE FUTURE, IN
CONNECTION WITH ANY SUCH ADVERSE MATTERS, INCLUDING, WITHOUT LIMITATION, ANY
RIGHT OF CONTRIBUTION. BUYER ACKNOWLEDGES AND AGREES THAT UPON CLOSING, SELLER
SHALL SELL AND CONVEY TO BUYER AND BUYER SHALL ACCEPT, SUBJECT TO THE SELLER
WARRANTIES AND THE SURVIVAL THEREOF, THE PROPERTY “AS IS, WHERE IS,” WITH ALL
FAULTS. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT THERE ARE NO ORAL
AGREEMENTS, WARRANTIES OR REPRESENTATIONS, COLLATERAL TO OR AFFECTING THE
PROPERTY BY SELLER, ANY AGENT OF SELLER OR ANY THIRD PARTY. THE TERMS AND
CONDITIONS OF THIS PARAGRAPH SHALL EXPRESSLY SURVIVE THE CLOSING AND SHALL NOT
MERGE WITH THE PROVISIONS OF ANY TRANSFER DOCUMENTS. EXCEPT FOR THE SELLER
WARRANTIES, SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR WRITTEN
STATEMENTS, REPRESENTATIONS, OR INFORMATION PERTAINING TO THE PROPERTY
FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE, SERVANT, OR OTHER PERSON.
BUYER ACKNOWLEDGES THAT THE PURCHASE PRICE REFLECTS THE “AS IS” NATURE OF THIS
SALE AND ANY FAULTS, LIABILITIES, DEFECTS OR OTHER ADVERSE MATTERS THAT MAY BE
ASSOCIATED WITH THE PROPERTY. BUYER HAS FULLY REVIEWED THE DISCLAIMERS,
ASSUMPTIONS AND WAIVERS SET FORTH IN THIS AGREEMENT WITH ITS COUNSEL AND
UNDERSTANDS THE 

17

SIGNIFICANCE AND EFFECT THEREOF. BUYER FURTHER ACKNOWLEDGES AND AGREES
THAT THE PROVISIONS OF THIS PARAGRAPH (13)(d) AND PARAGRAPH 13(c) ABOVE ARE AN
INTEGRAL PART OF THIS AGREEMENT AND THAT SELLER WOULD NOT HAVE AGREED TO SELL
THE PROPERTY TO BUYER FOR THE PURCHASE PRICE WITHOUT SUCH PROVISIONS.

          14.      BUYER’S
REPRESENTATIONS WARRANTIES AND COVENANTS. 

                     (a)     Buyer
hereby represents and warrants to Seller as of the Effective Date and again as
of COE that:

                    
         (i)     Buyer
has full power and authority to execute, deliver and perform under this
Agreement as well as under the Transfer Documents;

                    
         (ii)     there are no actions or proceedings pending
or to Buyer’s knowledge, threatened against Buyer which may in any manner
whatsoever affect the validity or enforceability of this Agreement or any of
the documents, the agreed upon forms of which are attached hereto as Exhibits;
and

                    
         (iii)     the execution, delivery and performance of
this Agreement and the Transfer Documents have not and will not constitute a
breach or default under any other agreement, law or court order under which
Buyer is a party or may be bound.

                     (b)     Further,
Buyer hereby covenants to Seller as of the Effective Date that:

                    
         (i)     should Buyer receive notice or knowledge of
any information regarding any of the matters set forth in this Section 14 after
the Effective Date and prior to COE, Buyer will promptly notify Seller of the
same in writing.

                     All
representations and warranties made in this Agreement by Buyer shall survive
the execution and delivery of this Agreement and COE for a period of one (1)
year. Buyer shall and does hereby indemnify against and hold Seller harmless
from any loss, damage, liability and expense, together with all court costs and
attorneys’ fees, if awarded by a court of law, which Seller may incur, by
reason of any misrepresentation by Buyer or any breach of any of Buyer’s
warranties or covenants. Buyer’s indemnity and hold harmless obligations shall
survive COE COE as provided in this paragraph. Any claim for a breach of
Buyer’s representations and warranties must be made in writing within one (1)
year following COE, and, if not resolved within thirty (30) days following such
claim, a claim must be brought in a court of competent jurisdiction within one
(1) year and thirty (30) days following COE.

          15.      RENTS
AND DEPOSITS. Seller and Buyer agree that, in addition to all other
conditions and covenants contained herein, Seller shall deliver to Buyer and
Escrow Agent not later than the day immediately prior to COE information,
certified by Seller to be true and accurate as of the date thereof and as of
the date of COE, with respect to (i) the amount of Tenant’s security deposit
under the Lease, if any, and (ii) prepaid and/or abated rents, including,
without limitation, the amount thereof and the date to which such rents have
been paid.

18

          16.          BROKER’S
COMMISSION. Concerning any brokerage commission, the Parties agree as
follows:

                         (a)          the
Parties warrant to one another that they have not dealt with any finder, broker
or realtor in connection with this Agreement except Marcus & Millichap
(Alvin Mansour) (“Broker”);

                         (b)          if
any person shall assert a claim to a finder’s fee or brokerage commission on
account of alleged employment as a finder or broker in connection with this
Agreement (including Broker), the Party under whom the finder or broker is
claiming shall indemnify and hold the other Party harmless from and against any
such claim and all costs, expenses and liabilities incurred in connection with
such claim or any action or proceeding brought on such claim, including, but
not limited to, counsel and witness fees and court costs in defending against
such claim. The provisions of this subsection shall survive cancellation of
this Agreement or COE; and

                         (c)          
Seller shall be responsible for payment of a commission to Broker pursuant to a
separate written agreement between Seller and Broker, which commission shall be
paid at COE.

          17.          CLOSE
OF ESCROW. COE shall be on or before 3:00 p.m. CST on July 1, 2013 or such
earlier date as Buyer may choose by giving not less than five (5) days prior
written notice to Seller and Escrow Agent (the “Closing Date”). Buyer
may extend the Closing Date for up to an additional fifteen (15) days upon
delivery of written notice to extend the Closing Date to Escrow Agent prior to
the original Closing Date. 

          18.          ASSIGNMENT.
This Agreement may not be assigned by Seller without the prior written consent
of Buyer which consent shall not be unreasonably withheld. Buyer may assign its rights under this
Agreement to an affiliate of Buyer without seeking or obtaining Seller’s
consent. Such assignment shall not become effective until the assignee executes
an instrument whereby such assignee expressly assumes all unperformed
obligations of Buyer under this Agreement. Buyer may also designate
someone other than Buyer, as grantee under the Transfer Documents, by providing
written notice of such designation at least five (5) days’ prior to COE and
obtaining Seller’s prior written consent if such grantee is not an affiliate of
Buyer. Such assignment shall not become effective
until the assignee executes an instrument whereby such assignee expressly
assumes all unperformed obligations of Buyer under this Agreement. No assignment shall release or otherwise
relieve Buyer from any obligations hereunder; provided, however,
with respect to any assignment, if COE occurs the assigning party (but not the
assignee) shall be relieved of all its obligations arising under this Agreement
before, on and after COE. 

          19.          RISK
OF LOSS. Seller shall bear all risk of loss resulting from or related to
damage of or to the Property or any part thereof which may occur prior to COE.
Seller shall also bear all risk of loss resulting from or related to a taking
or condemnation of the Property or any part thereof with respect to which
written notice of a proposed condemnation or taking is 

19

received, a condemnation proceeding is commenced, a
condemnation proceeding is concluded or all or any part of the Property is
conveyed in lieu of condemnation prior to COE (any such damage, taking or
condemnation event a “Risk of Loss Event”). In the event of any Risk of
Loss Event prior to COE which is “Material” (as defined below), Buyer may, at
Buyer’s sole option, by written notice to Seller and Escrow Agent, cancel this
Agreement whereupon the Earnest Money Deposit shall be paid immediately by
Escrow Agent to Buyer and, except as otherwise provided in this Agreement,
neither of the Parties shall have any further liability or obligation
hereunder. In the alternative, Buyer may attempt to negotiate an appropriate
downward adjustment of the Purchase Price. If Seller and Buyer cannot agree
upon such a downward adjustment within a reasonable period (not to exceed ten
(10) days from the date Buyer receives notice of the loss) Buyer may cancel
this Agreement as provided above. In the event of any Risk of Loss Event which
does not result in a termination of this Agreement, Seller shall at COE and as
a condition precedent thereto, pay Buyer or credit Buyer against the Purchase
Price the amount of any insurance or condemnation proceeds, or assign to Buyer,
as of COE and in a form acceptable to Buyer, all rights or claims for relief to
the same, and credit to Buyer an amount equal to the deductible (if any) under
the insurance policy.

          As
used herein, the term “Material” shall mean (i) with respect to a Risk of Loss
Event related to casualty, such Risk of Loss Event results in (a) Tenant having
a right of termination under the Lease and the Tenant does not waive such right
of termination in writing prior to the date that is ten (10) days from the date
that Buyer receives notice of the Risk of Loss Event, (b) Tenant having the
right to permanently or temporarily abate or offset its rent under the Lease,
(c) damage to the Property the cost of which to repair is reasonably estimated
to exceed $100,000, or (d) damage to the Property that is not fully covered by insurance
(unless Seller agrees in writing to contribute, as a credit to Buyer against
the Purchase Price at COE, the full amount of such shortage); and (ii) with
respect to a Risk of Loss Event related to a condemnation, such Risk of Loss
Event results in (a) Tenant having a right of termination under the applicable
Lease and Tenant does not waive such right of termination in writing prior to
the date that is ten (10) days from the date that Buyer receives notice of the
Risk of Loss Event, (b) Tenant having a right to permanently or temporarily
abate or offset its rent under the Lease, or (c) required repairs or
renovations to the Property the cost of which is reasonably estimated to exceed
$100,000.

          20.          REMEDIES.

                         (a)          Seller’s
Breach. If Seller breaches this Agreement, including, without limitation, a
material breach of any representation or warranty of Seller set forth herein
and/or the failure of Seller to satisfy any conditions precedent to COE
specified in Section 12 above that is within Seller’s control, Buyer may, as
Buyer’s sole and exclusive remedy, by written notice to Seller and Escrow
Agent, cancel this Agreement whereupon the Earnest Money Deposit shall be paid
immediately by Escrow Agent to Buyer, Seller shall promptly reimburse to Buyer
its reasonable out-of-pocket and third-party property diligence expenses
incurred prior to the date of Seller’s default, such amount not to exceed the
sum of $50,000.00 (provided, however, that the obligation to reimburse Buyer
for its out-of-pocket costs shall only arise upon Seller’s receipt of
reasonably satisfactory evidence of such costs), and thereafter, only if the
Seller’s default is solely with respect to its intentional and willful failure
to fulfill its obligations under this Agreement, pay to Buyer the sum of
$250,000.00 as liquidated damages for the breach of this 

20

Contract, it being agreed between the parties hereto
that the actual damages to Buyer in the event of such breach are impractical to
ascertain and such amount is a reasonable estimate thereof. Thereafter neither
party shall any further obligations hereunder, except as to those which
expressly survive the termination of this Contract. Seller hereby acknowledges
and agrees that the
provisions of this Section 20(a) shall not limit any rights or remedies Buyer
may have against Seller after COE for any misrepresentation, breach of warranty
or default by Seller in any of its obligations under this Agreement, the
Transfer Documents or any other documents to be entered into pursuant to this
Agreement.

                         (b)          Buyer’s
Breach. If Buyer breaches this Agreement, as its sole remedy Seller shall
be entitled to retain the Earnest Money Deposit in accordance with subsection 5(b)
as Seller’s agreed and total liquidated damages. Seller hereby waives any right
to seek any equitable or legal remedies against Buyer; provided however, Buyer
hereby acknowledges and agrees that the provisions of this Section 20(b) shall
not limit any rights or remedies Seller may have against Buyer for any
indemnification of Seller by Buyer under this Agreement.

          21.          ATTORNEYS’
FEES. If there is any
litigation to enforce any provisions or rights arising under this Agreement, the
unsuccessful party in such litigation, as determined by the court, agrees to
pay the successful party, as determined by the court, all costs and expenses,
including, but not limited to, reasonable attorneys’ fees incurred by the
successful party, such fees to be determined by the court. For purposes of this Section 21, a party
will be considered to be the “successful party” if (a) such party initiated the
litigation and substantially obtained the relief which it sought (whether by
judgment, voluntary agreement or action of the other party, trial, or
alternative dispute resolution process), (b) such party did not initiate the
litigation and either (i) received a judgment in its favor, or (ii) did not
receive judgment in its favor, but the party receiving the judgment did not
substantially obtain the relief which it sought, or (c) the other party to the
litigation withdrew its claim or action without having substantially received
the relief which it was seeking.

          22.          NOTICES.

                         (a)          Addresses.
Except as otherwise required by law, any notice required or permitted hereunder
shall be in writing and shall be given by personal delivery, or by deposit in
the U.S. Mail, certified or registered, return receipt requested, postage
prepaid, addressed to the Parties at the addresses set forth below, or at such
other address as a Party may designate in writing pursuant hereto, or telecopy
(fax), electronic transmission (email), or any express or overnight delivery
service (e.g., Federal Express), delivery charges prepaid:

	
  

 	
  

 	
  

 
	
 if to Seller:

 	
 AMREIT WOODLAKE POINTE I, LP

 
	
  

 	
 8 Greenway Plaza, Suite 1000

 
	
  

 	
 Houston, TX 77046

 
	
  

 	
 Attn:

 	
 Tim Ng

 
	
  

 	
 Tel.:

 	
 (713) 860-4945

 
	
  

 	
 Fax:

 	
 (713) 850-0498

 
	
  

 	
 Email:

 	
 tng@amreit.com 

 

21

	
  

 	
  

 	
  

 
	
 with copies to:

 	
 Wilson, Cribbs & Goren, P.C.

 
	
  

 	
 2500 Fannin Street

 
	
  

 	
 Houston, TX 77002

 
	
  

 	
 Attn:

 	
 Anthony L. Marré

 
	
  

 	
 Tel.:

 	
 (713) 547-8511

 
	
  

 	
 Fax:

 	
  (713)
 229-8824

 
	
  

 	
 Email:

 	
 amarre@wcglaw.net
 

 

	
  

 	
  

 	
  

 
	
 if to Buyer:

 	
 Series C, LLC

 
	
  

 	
 c/o Cole Real Estate
 Investments

 
	
  

 	
 2325 E. Camelback Road, Suite 1100

 
	
  

 	
 Phoenix, AZ 85016

 
	
  

 	
 Attn:

 	
 Legal Department

 
	
  

 	
 Tel.:

 	
  (602)
 778-8700

 
	
  

 	
 Fax:

 	
 (480) 449-7012

 
	
  

 	
 Email:

 	
 ____________

 

	
  

 	
  

 	
  

 
	
 with copies to:

 	
 Snell & Wilmer L.L.P.

 
	
  

 	
 400 East Van Buren Street

 
	
  

 	
 Suite 1900

 
	
  

 	
 Phoenix, AZ 85004

 
	
  

 	
 Attn:

 	
 Joseph Y. Viola

 
	
  

 	
 Tel.:

 	
  (602)
 382-6328

 
	
  

 	
 Fax:

 	
  (602)
 382-6070

 
	
  

 	
 Email:

 	
 jviola@swlaw.com

 

	
  

 	
  

 	
  

 
	
 If to Escrow Agent:

 	
 First American Title
 Insurance Company

 
	
  

 	
 2425 E. Camelback Road,
 Suite 300

 
	
  

 	
 Phoenix, AZ 85016

 
	
  

 	
 Attn:

 	
 Mr. Brandon Grajewski

 
	
  

 	
 Tel.:

 	
 (602) 567-8145

 
	
  

 	
 Fax:

 	
  (602) 567-8101

 
	
  

 	
 Email:

 	
 bgrajewski@firstam.com

 

                         (b)          
Effective Date of Notices. Notice shall be deemed to have been given on
the date on which notice is delivered, if notice is given by personal delivery
or telecopy, and on the date of deposit in the mail, if mailed or deposited
with the overnight carrier, if used. Notice shall be deemed to have been
received (i) on the date on which the notice is received, if notice is given by
telecopy or personal delivery, (ii) on the first business day following deposit
with an overnight carrier, if used, and (iii) on the second (2nd) day following
deposit in the U.S. Mail, if notice is mailed. If escrow has opened, a copy of
any notice given to a party shall also be given to Escrow Agent by regular U.S.
Mail or by any other method provided for herein.

          23.          CLOSING
COSTS.

22

                         (a)          Closing
Costs. Seller and Buyer agree to pay closing costs as indicated in this
Agreement and in the escrow instructions attached hereto as Exhibit F, and by
this reference incorporated herein (the “Escrow Instructions”). At COE,
Seller shall pay (i) the costs of releasing all liens, judgments, and other
encumbrances that are to be released and of recording such releases, (ii)
one-half the fees and costs due Escrow Agent for its services, (iii) the
transfer tax associated with the sale of the Property, if any, and (iv) all
other costs to be paid by Seller under this Agreement. At COE, Buyer shall pay
(i) one-half the fees and costs due Escrow Agent for its services, and (ii) all
other costs to be paid by Buyer under this Agreement. Except as otherwise
provided for in this Agreement, Seller and Buyer will each be solely
responsible for and bear all of their own respective expenses, including,
without limitation, expenses of legal counsel, accountants, and other advisors
incurred at any time in connection with pursuing or consummating the
transaction contemplated herein. 

                         (b)          Prorations.
Real estate taxes (other than those real estate taxes that are the sole
responsibility of Tenant under the Lease) shall be prorated based upon the
current valuation and latest available tax rates. All prorations shall be
calculated through escrow as of COE based upon the latest available information, including, without limitation, a
credit to Buyer for any rent prepaid by Tenant for the period beginning with
and including the date on which the closing occurs through and including the
last day of the month in which the closing occurs. All other credits to Buyer
shall be similarly prorated. Any other closing costs not specifically
designated as the responsibility of either Party in the Escrow Instructions or
in this Agreement shall be paid by Seller and Buyer according to the usual and
customary allocation of the same by Escrow Agent. Seller agrees that all
closing costs payable by Seller shall be deducted from Seller’s proceeds
otherwise payable to Seller at COE. Buyer shall deposit with Escrow Agent sufficient
cash to pay all of Buyer’s closing costs. Except as provided in this Section
23, Seller and Buyer shall each bear their own costs in regard to this
Agreement. 

                         (c)          Post-Closing
Adjustment. If after COE, the parties discover any errors in adjustments
and apportionments or additional information becomes available which would
render the closing prorations inaccurate, the same shall be corrected as soon
after their discovery as possible. The provision of this Section 23(c) shall
survive COE except that no adjustment shall be made later than eighteen (18)
months after COE unless prior to such date the Party seeking the adjustment
shall have delivered a written notice to the other Party specifying the nature
and basis for such claim; provided, however, in the event an adjustment is
sought due to the fact that current tax bills with respect to the Property had
not yet been issued as of COE, the provisions of this Section 23(c) shall
survive with respect to any closing proration of real property taxes (other
than those real estate taxes that are the sole responsibility of Tenant under
the Lease) until thirty (30) days after Buyer’s receipt of tax bills for the
period of time during which COE occurred. In the event that such claim is
valid, the Party against whom the claim is sought shall have ten (10) days in
which to remit any adjustment due.

                         (d)          Instructions.
This Agreement, together with the Escrow Instructions, shall constitute escrow
instructions for the transaction contemplated herein. Such escrow instructions
shall be construed as applying principally to Escrow Agent’s employment.

                         (e)
          Survival.
The provisions of this Section 23 shall survive COE.

23

          24.          ESCROW
CANCELLATION CHARGES. If escrow fails to close because of Seller’s default,
Seller shall be liable for any cancellation charges of Escrow Agent. If escrow
fails to close because of Buyer’s default, Buyer shall be liable for any cancellation
charges of Escrow Agent. If escrow fails to close for any other reason, Seller
and Buyer shall each be liable for one-half of any cancellation charges of
Escrow Agent. The provisions of this Section 24 shall survive cancellation of
this Agreement.

          25.          APPROVALS.
Concerning all matters in this Agreement requiring the consent or approval of
any Party, the Parties agree that any such consent or approval shall not be
unreasonably withheld unless otherwise provided in this Agreement. 

          26.          Reserved. 

          27.          ADDITIONAL
ACTS. The Parties agree to execute promptly such other documents and to
perform such other acts as may be reasonably necessary to carry out the purpose
and intent of this Agreement.

          28.          GOVERNING
LAW. This Agreement shall be governed by and construed or enforced in
accordance with the laws of the State of Texas. 

          29.          CONSTRUCTION.
The terms and provisions of this Agreement represent the results of negotiations
among the Parties, each of which has been represented by counsel of its own
choosing, and neither of which has acted under any duress or compulsion,
whether legal, economic or otherwise. Consequently, the terms and provisions of
this Agreement shall be interpreted and construed in accordance with their
usual and customary meanings, and the Parties each hereby waive the application
of any rule of law which would otherwise be applicable in connection with the
interpretation and construction of this Agreement that ambiguous or conflicting
terms or provisions contained in this Agreement shall be interpreted or construed
against the Party whose attorney prepared the executed Agreement or any earlier
draft of the same.

          30.          TIME
OF ESSENCE. Time is of the essence of this Agreement. However, if this
Agreement requires any act to be done or action to be taken on a date which is
a Saturday, Sunday or legal holiday, such act or action shall be deemed to have
been validly done or taken if done or taken on the next succeeding day which is
not a Saturday, Sunday or legal holiday, and the successive periods shall be
deemed extended accordingly.

          31.          INTERPRETATION.
If there is any specific and direct conflict between, or any ambiguity
resulting from, the terms and provisions of this Agreement and the terms and
provisions of any document, instrument or other agreement executed in
connection herewith or in furtherance hereof, including any Exhibits hereto,
the same shall be consistently interpreted in such manner as to give effect to
the general purposes and intention as expressed in this Agreement which shall
be deemed to prevail and control.

24

          32.          HEADINGS.
The headings of this Agreement are for reference only and shall not limit or
define the meaning of any provision of this Agreement. 

          33.          FAX
AND COUNTERPARTS. This Agreement may be executed by facsimile, by email (in
“.pdf” format) and/or in any number of counterparts, each of which when so
executed and delivered shall be deemed an original, and all of which together
shall constitute one and the same instrument.

          34.          INCORPORATION
OF EXHIBITS BY REFERENCE. All Exhibits to this Agreement are fully
incorporated herein as though set forth at length herein.

          35.          SEVERABILITY.
If any provision of this Agreement is unenforceable, the remaining provisions
shall nevertheless be kept in effect.

          36.          ENTIRE
AGREEMENT. This Agreement contains the entire agreement between the Parties
and supersedes all prior agreements, oral or written, with respect to the
subject matter hereof. The provisions of this Agreement shall be construed as a
whole and not strictly for or against any Party.

          37.          INDEMNITY. Seller shall indemnify, hold harmless and defend Buyer, Buyer’s
affiliates, the partners, trustees, shareholders, directors, officers,
attorneys, employees and agents of each of them, and their respective heirs,
successors, personal representatives and assigns (collectively, the “Indemnified
Parties”) from any and all demands, claims (including, without limitation,
causes of action in tort), legal or administrative proceedings, losses,
liabilities, damages, penalties, fines, liens, judgments, costs or expenses
whatsoever (including, without limitation, attorneys’ fees and costs), whether
direct or indirect, known or unknown, foreseen or unforeseen (collectively,
“Claims”) that may arise on account of or in any way be connected with any
actions, suits, proceedings or claims brought by third parties against Buyer
(a) relating to any actual or alleged events, acts or omissions occurring with
respect to the Property prior to COE, and/or (b) based upon Buyer’s ownership
of the Property but with respect to which the claimed loss, damage or injury
occurred prior to COE. Buyer shall indemnify, hold harmless and defend Seller,
Seller’s affiliates, the partners, trustees, shareholders, directors, officers,
attorneys, employees and agents of each of them, and their respective heirs,
successors, personal representatives and assigns from any and all Claims that
may arise on account of or in any way be connected with any actions, suits,
proceedings or claims brought by third parties against Seller (y) relating to
any actual or alleged events, acts or omissions occurring with respect to the
Property from and after COE, and/or (z) based upon Seller’s ownership of the
Property but with respect to which the claimed loss, damage or injury occurred
from and after COE. The provisions of this Section 37 shall survive COE.

          38.          PRIVILEGE
TAXES. Seller
represents, warrants and covenants to Buyer that all state and local
transaction privilege, sales, excise, use or similar taxes relating to the development,
sale or rental of the Property (including, without limitation any speculative
builder tax, owner-builder tax, or construction contractor tax) have been paid and Seller shall pay any
such taxes that may arise as a result of the sale of the Property to Buyer as
and when due. Seller 

25

shall indemnify, hold
harmless and defend the Indemnified Parties from any and all Claims relating to
a breach of the preceding sentence. The provisions of this Section shall
survive COE. 

          39.          Reserved.

          40.          TENANT AUDIT RIGHT. In the event that Tenant has the right to
inspect and audit the books, records and other documents of the landlord under
the Lease which evidence the purchase price of the Real Property, the
development and construction costs of the Improvements, and/or common area
maintenance costs and expenses, Seller hereby covenants and agrees that it
shall retain such books, records and other documents which will enable Tenant
to conduct a full and complete audit thereof until the date that is six (6)
months after the latest date that Tenant could demand an inspection and/or
audit thereof pursuant to the Lease and, upon written request therefore from
Buyer, or any successor or assign, thereof, shall provide both Buyer and Tenant
with reasonable access thereto and otherwise reasonably cooperate with both
Buyer and Tenant with respect to such inspection and/or audit by Tenant. In the
event Tenant claims any right to a credit, refund or other reimbursement as a
result of such audit, Seller shall indemnify, hold harmless and defend the
Indemnified Parties from any and all Claims relating thereto or arising
therefrom. The provisions of this Section 40 shall survive COE.

          41.          LIKE-KIND
EXCHANGE. (a) Seller agrees to reasonably cooperate with Buyer by executing
such documents or taking such action as Buyer reasonably requests in connection
with any tax deferred exchange pursuant to Section 1031 of the Tax Code,
provided that (i) the transaction contemplated by this Agreement shall not be
conditioned upon completion of such exchange; (ii) Seller shall not be required
to take title to any real property in connection with any such exchange; (iii)
Seller shall not incur any liability by reason of any such exchange; and (iv)
Seller shall not be relieved of any of its obligations under this Agreement as
a result of any such exchange.

          (b)
   Buyer agrees to
reasonably cooperate with Seller by executing such documents or taking such
action as Seller reasonably requests in connection with any tax deferred
exchange pursuant to Section 1031 of the Tax Code, provided that (i) the
transaction contemplated by this Agreement shall not be conditioned upon
completion of such exchange; (ii) Buyer shall not be required to take title to
any real property (other than the Property) in connection with any such
exchange; (iii) Buyer shall not incur any liability by reason of any such
exchange; and (iv) Buyer shall not be relieved of any of its obligations under
this Agreement as a result of any such exchange.

[REMAINDER OF THIS
PAGE INTENTIONALLY LEFT BLANK.]

26

          IN
WITNESS WHEREOF, Seller and Buyer have executed this Agreement as of the
Effective Date.

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 SELLER: 

 	
  

 	
  

 
	
  

 	
 AMREIT WOODLAKE POINTE I, LP,

 
	
  

 	
 a Texas limited partnership

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
   /s/ Brett Treadwell

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Its: 

 	
 Brett Treadwell, Vice President

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Date:

 	
   April 5, 2013

 	
  

 

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 BUYER: 

 	
 SERIES C, LLC, an Arizona limited liability company

 
	
  

 	
  

 
	
  

 	
 By:

 	
   /s/ Todd J. Weiss

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Its: 

 	
   Todd J. Weiss, Authorized Officer

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Date:

 	
   April 5, 2013

 	
  

 

27 

ESCROW AGENT’S
ACCEPTANCE

          The
foregoing fully executed Agreement together with the Earnest Money Deposit is
accepted by the undersigned this 15th day of April, 2013, which for the
purposes of this Agreement shall be deemed to be the date of Opening of Escrow.
Escrow Agent hereby accepts the engagement to handle the escrow established by
this Agreement in accordance with the terms set forth in this Agreement.

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 FIRST AMERICAN TITLE INSURANCE COMPANY

 
	
  

 	
  

 
	
  

 	
 By: 

 	
   /s/ Brandon Giajensli

 	
  

 
	
  

 	
  

 
	
  

 	
 Title:

 	
   Escrow Officer

 	
  

 

28

EXHIBIT A

LEGAL DESCRIPTION OF REAL PROPERTY

A tract or parcel containing
3.7931 acres or 165,225 square feet of land, being out of Unrestricted Reserve
“A” of Woodlake Pointe, a subdivision recorded under Film Code Number (F.C.
No.) 631064, of the Harris County Map Records (H.C.M.R.), situated in Harris
County, Texas, with said 3.7931 acre tract being more particularly described as
follows.

With all bearings based on
said subdivision plat;

BEGINNING at a 1” inch iron
pipe found on the west right-of-way (R.O.W.) line of Tanglewilde Avenue (eighty
feet wide) and marking the northeast corner of Lot 16, Block 1, of Tanglewilde,
Section One, a Subdivision recorded in Volume 49, Page 25, of the H.C.M.R. and
the southeast corner of said Unrestricted Reserve “A” and the southeast corner
of the herein described tract;

THENCE, with the north line
of said Tanglewilde, Section One and the south line of said Unrestricted
Reserve “A”, South 87 degrees 29 minutes 48 seconds West, a distance of 531.50
feet to a capped 5/8” iron rod stamped “Windrose Land Services” set on said
common line and the southwest corner of the herein described tract;

THENCE, through and across
said Unrestricted Reserve “A” the following three (3) courses:

          1.
North 02 degrees 30 minutes 12 seconds West, a distance of 235.29 feet to a cut
“X” in concrete set for a westerly corner of the herein described tract;

          2.
North 87 degrees 29 minutes 48 seconds East, a distance of 64.74 feet to a
capped 5/8” iron rod stamped “Windrose Land Services” set for an interior
corner of the herein described tract;

          3.
North 02 degrees 30 minutes 12 seconds West, a distance of 154.78 feet to a cut
“X” in concrete set on the south R.O.W. line of Westheimer Road (One
Hundred-twenty feet wide) and the north line of said Unrestricted Reserve “A”
and for the northwest corner of the herein described tract;

THENCE, with the south line
of said Westheimer Road and the north line of said Unrestricted Reserve “A”,
North 87 degrees 29 minutes 48 seconds East, a distance of 301.82 feet to a cut
“X” in concrete set on the south line of said Westheimer Road being the
northeast corner of said Unrestricted Reserve “A” and the northwest corner of
Restricted Reserve “A” of McDonald’s Place-Tanglewilde, a plat recorded in
Volume 339, Page 141, of the H.C.M.R. and being the northeast corner of the
herein described tract;

THENCE, with the common
lines of said Restricted Reserve “A” and said Unrestricted Reserve “A” the
following two (2) courses:

29

          1.
South 02 degrees 30 minutes 12 seconds East, a distance of 230.00 feet to a cut
“X” in concrete found marking the southwest corner of said Restricted Reserve
“A” and an interior corner of said Unrestricted Reserve “A” and of the herein
described tract;

          2.
North 87 degrees 29 minutes 48 seconds East, a distance of 231.62 feet to cut
“X” in concrete set for the beginning of a non-tangent curve to the right on
the west R.O.W. line of said Tanglewilde Avenue marking the southeast corner of
said Unrestricted Reserve “A” and the most easterly northeast corner of said
Unrestricted Reserve “A”

THENCE, with said west
R.O.W. line and the east line of said Unrestricted Reserve “A”, 159.01 feet
along the arc of said non-tangent curve to the right, having a radius of 809.29
feet, a central angle of 11 degrees 15 minutes 26 seconds, and having a chord
bearing and distance of South 19 degrees 38 minutes 11 seconds West, 158.75
feet to a cut “X” in concrete set marking the end of said curve;

THENCE, continuing along said West R.O.W. line and the east line of
said Unrestricted Reserve “A”, South 25 degrees 15minutes 35 seconds west, a
distance of 14.71 feet to THE PLACE OF BEGINNING AND CONTAINING 3.7931 ACRE OR
165,225 SQUARE FEET OF LAND.

30

EXHIBIT
B

BILL
OF SALE

          This Bill
of Sale is made and entered into as of _________________, 2013, by and between
AMREIT WOODLAKE POINTE I, LP a Texas limited partnership (“Seller”), and
___________________, LLC, a Delaware limited liability company (“Buyer”),
and provides as follows:

          WHEREAS,
Seller and Series ___, LLC (“Original Buyer”), entered into a Purchase
Agreement and Escrow Instructions dated as of _________, 201___ [as modified
by amendment dated ________________,] ([collectively, ]the “Agreement”),
pursuant to which Seller agreed to sell to Original Buyer certain real property
and personal property located at ____________________________, which is more
particularly described on Exhibit A attached hereto and made a part hereof (the
“Property”); and

          WHEREAS,
Original Buyer assigned its right, title and interest in and to the Agreement
to Buyer pursuant to that certain Assignment of Purchase Agreement and Escrow
Instructions dated as of _______________, 201___; and

          WHEREAS,
Seller may possess various items of personal property located in or on the
Property and used in the operation of the Property, which may include, without
limitation, furniture, furnishings, equipment, fixtures, inventory, machinery,
supplies and other personal property (the “Personal Property”). The
Agreement contemplates that all of Seller’s right, title and interest, if any,
in and to the Personal Property shall be transferred and assigned by Seller to
Buyer; and

          WHEREAS,
Seller desires to transfer and convey all of its right, title and interest, if
any, in and to the Personal Property to Buyer, and Buyer desires to accept the
transfer and conveyance of the Personal Property;

          NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Seller and Buyer covenant and agree as follows:

          1.          Transfer
and Assignment. Seller hereby transfers and conveys to Buyer all of the
right, title and interest of Seller, if any, in and to the Personal Property.
Buyer accepts the transfer and conveyance of the right, title and interest of
Seller in and to the Personal Property.

          2.          Representations
and Warranties of Seller. Seller represents and warrants to Buyer that it
possesses full right, power and authority to transfer and assign Seller’s
right, title and interest, if any, in and to the Personal Property to Buyer.

          3.          Condition
of the Personal Property. All of the Personal Property is transferred from
Seller to Buyer “as is.” Seller makes no implied warranty of merchantability
and no warranty, either express or implied, concerning the Personal Property,
except for the representations and warranties contained in this Bill of Sale or
in the Agreement, if any.

31

          4.          Counterparts.
The parties agree that this Bill of Sale may be executed by the parties in one
or more counterparts and each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

          IN WITNESS
WHEREOF, Seller and Buyer have executed this Bill of Sale as of the date set
forth above.

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 SELLER:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 AMREIT
 WOODLAKE POINTE I, LP,

 	
  

 
	
  

 	
 a Texas
 limited partnership

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Title: 

 	
  

 	
  

 

	
  

 	
  

 
	
  

 	
 BUYER:

 
	
  

 	
  

 
	
  

 	
 _____________________,
 LLC,

 
	
  

 	
 a Delaware
 limited liability company

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 ________________,
 LLC,

 
	
  

 	
  

 	
 a Delaware
 limited liability company,

 
	
  

 	
  

 	
 its Manager

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Title: 

 	
  

 

32

EXHIBIT
A TO 

BILL OF SALE

Legal
Description

33

EXHIBIT
C

 [to be recorded]

THIS
INSTRUMENT PREPARED BY:

Joseph Viola,
Esq.

Snell & Wilmer L.L.P.

One Arizona Center

400 E. Van Buren Street

Phoenix, AZ 85004

UPON
RECORDATION RETURN TO:

Cole ______________________, LLC

c/o Cole Real Estate Investments

2325 E. Camelback Road, Suite 1100

Phoenix, AZ 85016

Attn: Legal Department

ASSIGNMENT AND
ASSUMPTION OF LEASE [AND GUARANTY]

          This
Assignment and Assumption of Lease [and Guaranty] (the “Assignment”),
dated as of _____________, 2013 (the “Effective Date”), is by and
between AMREIT WOODLAKE POINTE I, LP a Texas limited partnership (“Assignor”),
and _____________________, LLC, a Delaware limited liability company (“Assignee”).

          WHEREAS,
Assignor is presently the holder of the lessor’s interest under the lease, as
amended (collectively, the “Lease”) listed on Exhibit A attached hereto
and by this reference incorporated herein. The Lease affects the real property
described on Exhibit B attached hereto.

          [WHEREAS, the tenant’s obligations under
the Lease are guaranteed by that certain guaranty listed on Exhibit A attached
hereto (the “Guaranty”).]

          NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Assignor and Assignee agree as follows:

          1.          Assignment.
As of the Effective Date, Assignor hereby assigns, conveys, transfers and sets
over unto Assignee all of Assignor’s right, title and interest in, to and under
the Lease, including, without limitation, all of Assignor’s right, title and
interest in and to security, cleaning or other deposits and in and to any
claims for rent, arrears rent or any other claims arising under the Lease
against any lessee thereunder, subject to the rights of the lessees under the
Lease.

34

          2.          Assumption.
Assignee hereby assumes and agrees to pay all sums, and perform, fulfill and
comply with all covenants and obligations, which are to be paid, performed,
fulfilled and complied with by the lessor under the Lease, from and after the
Effective Date.

          3.          Assignee’s
Indemnification of Assignor. Assignee shall and does hereby indemnify
Assignor against, and agrees to hold Assignor harmless of and from, all
liabilities, obligations, actions, suits, proceedings or claims, and all
losses, costs and expenses, including but not limited to reasonable attorneys’
fees, arising as a result of any act, omission or obligation of Assignee
arising or accruing with respect to the Lease and occurring or alleged to have
occurred after the Effective Date.

          4.          Assignor’s
Indemnification of Assignee. Assignor shall and does hereby indemnify
Assignee against, and agrees to hold Assignee harmless of and from, all
liabilities, obligations, actions, suits, proceedings or claims, and all
losses, costs and expenses, including but not limited to reasonable attorneys’
fees, arising as a result of any act, omission or obligation of Assignor
arising or accruing with respect to the Lease and occurring or alleged to have
occurred on or prior to the Effective Date. Additionally, Assignor shall and
does hereby indemnify Assignee against, and agrees to hold Assignee harmless of
and from, all liabilities, obligations, actions, suits, proceedings or claims, and
all losses, costs and expenses, including but not limited to reasonable
attorneys’ fees, arising out of or related to (i) any failure by Assignor to
reasonably cooperate with Assignee and/or the tenant under the Lease in
connection with an audit by such tenant pursuant to Section ___ of the Lease,
and/or (ii) any claim for a refund, credit or other reimbursement as a result
of such audit.

          5.          Binding
Effect. This Assignment shall inure to the benefit of and shall be binding
upon the parties hereto and their respective successors and assigns.

          6.          Counterparts.
The parties agree that this Assignment may be executed by the parties in one or
more counterparts and each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

[SIGNATURE
PAGES TO FOLLOW]

35

          IN
WITNESS WHEREOF, Assignor and Assignee have executed this Assignment as of the
date set forth above.

	
  

 	
  

 	
  

 	
  

 
	
 ASSIGNOR:

 	
 AMREIT
 WOODLAKE POINTE I, LP,

 
	
  

 	
 a Texas limited
 partnership

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Its:

 	
  

 	
  

 

STATE OF _____________ )

) SS.

COUNTY OF ___________ )

          Before me,
a notary public in and for said county and state, appeared ______________________,
the __________________of _________________________, a
_________________________________, who acknowledged to me that he did execute
the foregoing instrument and the same is his free act and deed, personally and
on behalf of said company.

In testimony whereof, I have hereunto
subscribed my name, and affixed my official seal at _______________________,
this _____ day of _____________, 2012.

	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Notary
 Public

 
	
  

 	
  

 	
  

 
	
 My
 Commission Expires:

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 

36

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ASSIGNEE:

 	
 COLE
 _____________________, LLC,

 
	
  

 	
 a Delaware
 limited liability company

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 __________________,
 LLC,

 
	
  

 	
  

 	
 a Delaware
 limited liability company,

 
	
  

 	
  

 	
 its Manager

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Title: 

 	
  

 

STATE OF _____________ )

) SS.

COUNTY OF ___________ )

          Before
me, a notary public in and for said county and state, appeared _________________ as ______________________ of
COLE ____________________________, LLC, a Delaware limited liability company,
the Manager of COLE _____________________________, a Delaware limited liability
company, who acknowledged to me that he did execute the foregoing
instrument and the same is his free act and deed, personally and on behalf of
said company.

In testimony whereof, I have hereunto
subscribed my name, and affixed my official seal at _______________________,
this _____ day of _______________, 2012.

	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Notary
 Public

 
	
  

 	
  

 	
  

 
	
 My
 Commission Expires:

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 

37

EXHIBIT A TO

ASSIGNMENT AND ASSUMPTION OF LEASE [AND GUARANTY ]

Lease Description

	
  

 	
  

 
	
 LANDLORD:

 	
 ______________________________,

 
	
  

 	
 a _______________________________

 
	
  

 	
  

 
	
 TENANT:

 	
 _________________________________,

 
	
  

 	
 a _________________________________

 
	
  

 	
  

 
	
 DATE:

 	
 Lease Agreement dated __________ ___, _____

 
	
  

 	
  

 
	
 PREMISES:

 	
 ___________________________

 
	
  

 	
 ________________ , TX 

 
	
  

 	
  

 
	
 TERM:

 	
 Commencing on __________ ___, _____

 
	
  

 	
 and ending on _____________ ___, _____.

 
	
  

 	
  

 
	
  [ AMENDMENTS:
 ]

 	
  

 
	
  

 	
  

 
	
  [Guaranty Description]

 
	
  

 	
  

 
	
  [GUARANTOR:

 	
 ______________________________

 
	
  

 	
 ______________________________

 
	
  

 	
 ______________________________

 
	
  

 	
  

 
	
 DATE:

 	
 ___________________________ ]

 
	
  

 	
  

 

38

EXHIBIT B TO

ASSIGNMENT AND ASSUMPTION OF LEASE [AND GUARANTY ]

Legal Description

39

EXHIBIT
D

ASSIGNMENT
AGREEMENT

          This
Assignment Agreement (the “Agreement”) dated as of _____________, 2013
(the “Effective Date”), is by and between AMREIT WOODLAKE POINTE I, LP a
Texas limited partnership (“Assignor”), and ________________________,
LLC, a Delaware limited liability company (“Assignee”).

          WHEREAS,
Assignor, as Seller, and Series ___, LLC, as Buyer (“Original Buyer”),
have entered into that certain Purchase Agreement and Escrow Instructions dated
as of _________, 201___ [as modified by amendment dated ________________,]
([collectively,
]the “Purchase Agreement”), providing for, among other
things, the transfer and sale by Assignor to Original Buyer of Contracts,
Warranties and Permits (capitalized terms used herein and otherwise not defined
shall have the meaning given in the Purchase Agreement); and

          WHEREAS,
Original Buyer assigned its right, title and interest in and to the Purchase
Agreement to Assignee pursuant to that certain Assignment of Purchase Agreement
and Escrow Instructions dated as of _______________, 201___; and

          WHEREAS,
Assignor desires to assign to Assignee all of Assignor’s right, title and
interest in and to the Permits, Warranties and the Contracts including, without
limitation, as more particularly listed in Exhibit A attached hereto
(collectively, the “Assigned Contracts”);

          NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Assignor and Assignee agree as follows:

          1.          Assignment.
Assignor does hereby convey and assign to Assignee, its successors and assigns,
all of Assignor’s right, title and interest in and to the Assigned Contracts
(and Assignor covenants to cooperate with Assignee to secure performance by any
warrantor for any work under such Assigned Contracts); provided, however, that
to the extent the assignment of any Assigned Contract shall require the consent
of any other party, this Agreement shall not constitute a contract to assign
the same or any rights or liabilities thereunder if an attempted assignment
thereof would cause a breach of the terms of the Assigned Contract, and the
assignment of such Assigned Contract shall not be effective unless and until
the consent of such other party shall have been obtained.

          2.          Binding
Agreement. The terms and conditions of this Agreement shall be binding upon
and inure to the benefit of Assignor and Assignee and their respective
successors and assigns.

          3.          Interpretation.
If there is any conflict as to the terms of this Agreement and the Purchase
Agreement, the terms of the Purchase Agreement shall prevail.

40

          4.          Governing
Law. This Assignment Agreement shall be governed by and construed in
accordance with the laws of Arizona applicable to contracts made and performed
entirely therein.

          5.          Headings.
The headings of this Agreement are for reference only and shall not limit or
define the meaning of any provision of this Agreement.

          6.          Counterparts.
The parties agree that this Agreement may be executed by the parties in one or
more counterparts and each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

          IN WITNESS
WHEREOF, Assignor and Assignee have executed this Agreement as of the date set
forth above.

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ASSIGNOR:

 	
 AMREIT
 WOODLAKE POINTE I, LP,

 	
  

 
	
  

 	
 a Texas
 limited partnership,

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Its:

 	
  

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 ASSIGNEE:

 	
 COLE
 _____________________, LLC,

 
	
  

 	
 a Delaware
 limited liability company

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 __________________,
 LLC,

 
	
  

 	
  

 	
 a Delaware
 limited liability company,

 
	
  

 	
  

 	
 its Manager

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By:

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Title: 

 	
  

 

41

EXHIBIT
A

LIST
OF CONTRACTS

42

EXHIBIT
E

SPECIAL
WARRANTY DEED

THE STATE OF ______________   ]

]

COUNTY OF _______________     ]

THAT, AMREIT WOODLAKE POINTE I, LP, a Texas
limited partnership (“Grantor”), whose address is 8 Greenway Plaza, Suite 1000,
Houston, TX 77046, for and in consideration of the sum of TEN AND NO/100
DOLLARS ($10.00), and other valuable consideration to Grantor in hand paid by
Grantee, as herein-after named, the receipt and sufficiency of which are hereby
acknowledged and confessed;

HAS GRANTED, SOLD AND CONVEYED and by these
presents does GRANT, SELL AND CONVEY unto ____________________, LLC, a Delaware
limited liability company (“Grantee”), whose address is
_____________________________ , that certain real property legally described on
the attached Exhibit A (the “Property”), SUBJECT TO all taxes,
assessments, liens, encumbrances, easements and restrictions of record and all
matters which an accurate survey or physical inspection of the Property would
disclose (the “Permitted Exceptions”).

TO HAVE AND TO HOLD the Property, together
will all and singular the rights and appurtenances thereto in anywise
belonging, unto said Grantee, its successors and assigns forever, and Grantor
hereby binds itself, its successors and assigns, TO WARRANT AND FOREVER DEFEND
all and singular the Property unto Grantee, its successors and assigns, against
any person whomsoever lawfully claiming or to claim the same or any part
thereof by, through or under Grantor, but not otherwise, and subject to the
Permitted Exceptions.

[REMAINDER OF
THIS PAGE INTENTIONALLY LEFT BLANK]

43

Executed this
_____ day of __________, 20__.

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 AMREIT
 WOODLAKE POINTE I, LP,

 
	
  

 	
 a Texas
 limited partnership,

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By

 	
  

 
	
  

 	
 Printed Name

 	
  

 
	
  

 	
 Its

 	
  

 

STATE OF                
           ]

] SS.

COUNTY OF                
       ]

Before me, the
undersigned, Notary Public, on this day personally appeared
______________________, _________________________ of [Grantor Name], a [entity
type] known to me to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he/she executed the same on behalf of
the [entity type], for the purposes and consideration expressed therein.

GIVEN UNDER MY HAND AND NOTORIAL SEAL THIS
_____ DAY OF ________________, 20__.

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 
	
  

 	
 Notary
 Public

 
	
  

 	
 Notary’s
 Printed Name:

 	
  

 
	
  

 	
 My
 Commission Expires:

 	
  

 

THIS INSTRUMENT WAS PREPARED BY AND IS TO BE
RETURNED TO:

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

44

EXHIBIT
A TO

SPECIAL WARRANTY DEED

Legal
Description

45

EXHIBIT
F

ESCROW
INSTRUCTIONS

          1.          Escrow
Agent is authorized to take all appropriate action necessary to comply with
this Agreement.

          2.          All
money payable shall be paid to Escrow Agent, unless otherwise specified.
Disbursement of any funds may be made by check of Escrow Agent. Unless
otherwise specified, all funds received by Escrow Agent shall be deposited by
Escrow Agent in any State or National Bank (FDIC insured), or as otherwise
directed in writing by Seller and Buyer. Escrow Agent shall be under no
obligation to disburse any funds represented by check or draft and no check or
draft shall be payment to Escrow Agen t in compliance with any of the
requirements hereof until it is advised by the bank in which it is deposited
that such check or draft has been honored.

          3.          Buyer
and Seller shall deposit with Escrow Agent all documents necessary to complete
the sale as established by the terms of this Agreement.

          4.          When
this Agreement and all title requirements have been complied with (including
without limitation all conditions set forth in any closing instructions agreed
to by Escrow Agent), Escrow Agent shall deliver, file or record in the
appropriate public office all necessary documents, disburse all funds and
instruct the title company to issue the appropriate title insurance policy(ies).

          5.          Escrow
Agent may resign upon ten (10) days written notice to the parties; provided
that Escrow Agent shall transfer the Escrow together with all documents and
funds to an escrow agent acceptable to both Seller and Buyer, or if Seller and
Buyer cannot agree upon an acceptable escrow agent, then Escrow Agent shall
have the right to resign and interplead all funds and documents to a court of
competent jurisdiction.

          6.          Escrow
Agent may at its election, in the event of any conflicting demands made upon it
concerning the Agreement, hold any money and documents deposited hereunder
until it receives mutual instructions by all parties or until a civil action
shall have been concluded in a court of competent jurisdiction, determining the
rights of the parties. In the alternative, Escrow Agent may at any time, at its
discretion, commence a civil action to interplead any conflicting demands to a
court of competent jurisdiction.

46Exhibit 10.4

CERTAIN INFORMATION INDICATED BY [***]
HAS BEEN DELETED FROM THIS EXHIBIT AND FILED

SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR

CONFIDENTIAL TREATMENT UNDER RULE 24B-2.

ASSET PURCHASE AGREEMENT

          THIS
ASSET PURCHASE AGREEMENT (the “Agreement”) is made as of February 14,
2014 by and among HARVEST ENGINEERING INC., a Delaware corporation (“Seller”),
HARVEST ENGINEERING LLC, an Illinois limited liability company (the “Harvest,
LLC”), STEPHEN MEYER (“S. Meyer”), BRUCE MEYER (“B. Meyer”
and, together with S. Meyer, the “Members”) and ELECTRO-SENSORS, INC., a
Minnesota corporation (the “Purchaser”).

          WHEREAS,
the Seller owns hazard monitoring products known as the “Insta-Link” hazard
monitoring system and product family and its related technologies and Seller
and Harvest LLC are or have been in the business of designing, developing,
manufacturing and selling such products and technologies (the “Business”).

          WHEREAS,
the Seller wishes to sell to the Purchaser, and the Purchaser wishes to
purchase from the Seller, all products and associated technologies, know-how,
intellectual property rights and certain other assets relating to the Business,
upon the terms and subject to the conditions of this Agreement.

          WHEREAS,
each of Harvest, LLC and the Members have been actively involved in and closely
identified with the Business and will directly and indirectly derive
substantial economic benefits from the transactions set forth in and contemplated
by this Agreement.

          NOW,
THEREFORE, in consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound, agree as
follows:

ARTICLE I

PURCHASE AND SALE OF ACQUIRED ASSETS

          1.1         Purchase and Sale. Upon the terms and subject to the
 conditions of this Agreement, the Seller agrees to sell, assign, transfer,
 convey and deliver, or caused to be sold, assigned, transferred, conveyed and
 delivered, to the Purchaser and the Purchaser agrees to purchase, on the
 Closing Date (as defined in Section 2.1), all of the Seller’s right, title
 and interest in and to the following assets, properties and rights of the
 Seller free and clear of all Liens (as defined in Section 3.1(e)):

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (a)          all
 Insta-Link products and systems (including the large, basic and micro product
 lines and systems) and improvements thereto (collectively, the “Products”)
 and wireless hazard monitoring technologies and improvements thereto
 (collectively, the “Technologies”); and

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (b)          all
 existing designs, engineering drawings, specifications, schematics, bills of
 materials, software, release notes, creative materials, advertising and
 promotional materials, studies, reports, installation and operation manuals,
 and other documentation necessary or desirable to enable the Purchaser to
 develop, build, market, sell, install, support, improve and otherwise exploit
 the Products and the Technologies (collectively, the “Documentation”);
 and

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (c)          all
 inventions, patents, trademarks, servicemarks, trade names (including all
 rights to the name “Insta-Link”), brand names, logos, copyrights, trade
 secrets, confidential information, proprietary know-how, licenses,
 privileges, general intangibles, technology and other intellectual property
 rights of whatever kind or character relating to the Products, the
 Technologies and the Documentation as well as all remedies against past and future
 infringements thereof and rights to protection of interests therein under the
 laws of all jurisdictions (collectively, the “Intellectual Property Rights”);
 and 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (d)          all
 inventories of Products and related parts, components, accessories and
 supplies (collectively, the “Inventories”); and

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (e)          all
 goodwill associated with the Products and the other assets identified in this
 Section 1.1 (the “Goodwill”).

 

37

The Products, the
Technologies, the Documentation, the Intellectual Property Rights, the
Inventories and the Goodwill are hereinafter sometimes referred to collectively
as the “Acquired Assets”.

          1.2          Open
Orders. Unless otherwise agreed in writing, the Seller and Harvest, LLC
shall be entitled to fulfill any open order for Products that remains open and
unfilled as of the Closing Date (the “Open Orders”); provided, however,
that that Seller and Harvest, LLC shall incur, assume and remain responsible
for any and all of the costs, expenses, warranties, liabilities and obligations
in connection with such Open Orders. 

          1.3          No
Assumption of Liabilities. The Purchaser shall acquire the Acquired Assets
free and clear of all Liens, obligations and liabilities. The Purchaser does
not assume and will in no way become liable or responsible for any obligations
and liabilities of the Seller, Harvest LLC or the Members of any kind, whether
now existing or hereafter arising, known or unknown, fixed or contingent,
liquidated or unliquidated (“Excluded Liabilities”), including, without
limitation, any obligation or liability with respect to federal, state or local
income, employment, sales, use excise or real or personal property taxes or
assessments, any product liability, breach of contract or warranty claim, any
claims of creditors of the Seller or the Members, or any liabilities of Seller
to its members, employees, consultants, agents and affiliates. The Seller shall
assume and agree to pay, perform and discharge promptly when due, and each of
the Seller, Harvest LLC and the Members agrees, jointly and severally, to
indemnify the Purchaser against and hold it harmless from, all claims, suits,
damages, losses, obligations, liabilities and expenses (including reasonable
attorneys’ fees) of whatever kind or character that may arising in connection
with any of the Excluded Liabilities. The Purchaser is purchasing the Acquired
Assets only and shall not be liable for any of the Seller’s, Harvest, LLC’s or
the Members’ liabilities or the performance of any of the Seller’s, Harvest,
LLC’s or the Members’ obligations. 

ARTICLE II

PURCHASE PRICE; CLOSING

          2.1          Purchase
Price. The aggregate purchase price for the Acquired Assets (the “Purchase
Price”) shall be $1,200,000 (the “Aggregate Fixed Payment”), plus an
amount up to the Maximum Milestone Payment Amount (as defined below), if any,
as and when such amounts may be payable in accordance with the terms of this
Agreement.

          2.2          Payment
of Aggregate Fixed Payment. The Purchaser shall pay the Aggregate Fixed
Payment to the Seller in installments in accordance with the following
schedule: (a) $400,000 shall be paid at Closing; (b) $400,000 shall be paid on
the first anniversary of the Closing; and (c) $400,000 shall be paid on the second
anniversary of the Closing. 

          2.3          Milestone
Payments. The Seller may be entitled to certain payments in the event that
the Purchaser achieves specified levels of Net Revenues (as hereinafter
defined) from the sale of the Products during the Measurement Period (as
hereinafter defined), each such payment being referred to herein as an “Milestone
Payment.” In the event that the Purchaser receives Net Revenue from the
sale of Products during the Measurement Period of at least [***] then the
Seller shall be entitled to a Milestone Payment of [***]. In the event that the
Purchaser receives Net Revenue from the sale of Products during the Measurement
Period of at least [***] in total, then the Seller shall be entitled to a
Milestone Payment of an additional [***]. In the event that the Purchaser
receives Net Revenue from the sale of Products during the Measurement Period of
at least [***] in total during the Measurement Period, the Seller shall be
entitled to a Milestone Payment of an additional [***]. The maximum aggregate
Milestone Payments, if any, to which the Seller may be entitled to under this
Agreement shall be $550,000 (the “Maximum Milestone Payment Amount”).
The term “Net Revenues” shall mean the gross amount collected by the
Purchaser from its customers arising from and attributable to the sale of the
Products after the deduction of an allowance for (i) any amounts repaid or
credited by reason of rejections, warranties or returns; (ii) sales, use,
excise or similar taxes; (iii) unreimbursed freight or shipping charges; and
(iv) promotion, volume discounts or rebates actually allowed and taken.

          2.4          Measurement
Period. No later than forty-five (45) days after the last day of each
calendar year following the Closing Date and continuing on an annual basis for
a period of four (4) calendar years following the Closing (such four (4) year
calendar period being referred to as a “Measurement Period”), the
Purchaser shall prepare, or cause to be prepared, and deliver to the Seller a
statement (each, a “Milestone Statement”) setting forth the Purchaser’s
good faith calculations of actual Net Revenues received by the Purchaser from
the sale of the Products and the resulting Milestone Payment, if any, to which
the Seller is entitled for the annual, calendar period for the preceding year
during the Measurement Period.

          2.5          Milestone
Statement Review. The Seller shall have thirty (30) days following its
receipt of the Milestone Statement (the “Milestone Payment Review Period”),
to review the same. If no such statement is timely delivered by the Seller to
the Purchaser within the Milestone Payment Review Period or the Seller delivers
a statement of no objection to the Purchaser, the Seller shall be conclusively
deemed to have accepted the Milestone Statement. If, however, the Seller shall
object to the Milestone Statement, such statement shall include a detailed
itemization of the Seller’s objections and its reasons for such objections and
the Seller and the Purchaser shall work reasonably and in good faith to resolve
such objections. If the parties are not able to resolve their disagreement and
objections with respect to the Milestone Statement within thirty (30) days
after the Seller delivers its objection, then the issues in dispute will be
submitted for resolution to an independent accounting firm (the “Independent
Accountant”), which shall be jointly selected and engaged by the Seller and
the Purchaser pursuant to an engagement letter in customary form which shall be
executed by each of the parties. The Independent Accountant shall consider only
those items and amounts in the Milestone Statement which the Seller and the
Purchaser are unable to resolve and each of the parties will be afforded the
opportunity to present any material relating to the determination and to
discuss the determination with the Independent Accountant. The determination of
the Independent Accountant will be binding and conclusive on the parties. The
fees, costs and expenses of the Independent Accountant will be apportioned
between the Seller and the Purchaser based upon the inverse proportion of the
disputed amounts in favor of such party (i.e. so that the prevailing party
bears a lesser amount of such fees, costs and expenses).

38

          2.6          Payment.
Each Milestone Payment, if any, will be paid by the Purchaser to the Seller by
wire transfer of immediately available funds to an accounts specified by the
Seller within ten (10) days of the following, as applicable: (a) the expiration
of the Milestone Review Period, (b) the receipt by the Purchaser of a statement
of no objection from the Seller, or (c) final determination by the Independent
Accountant. 

          2.7          Purchase
Price Allocation. For Tax purposes, the Purchase Price (including, for
purposes of this Section 2.2) shall be allocated among the Acquired Assets in
accordance with Exhibit A. Each party agrees (a) to act in accordance
with such allocation schedule in the preparation of financial statements and
filing of all tax returns (including IRS Form 8594), (b) not to voluntarily
take any position inconsistent therewith in the course of any tax contest,
unless required to do so by applicable law, and (c) to provide the other
promptly after request with any other information required to timely complete
IRS Form 8594.

          2.8          Closing
Date. The closing of the sale and transfer of the Acquired Assets
(hereinafter called the “Closing”) shall take place at the offices of
Lindquist & Vennum LLP located at 4200 IDS Center, 80 South Eighth Street,
Minneapolis, Minnesota 55402 at 10:00 a.m. on February 14, 2014 or at such
other time, date and place as shall be fixed by agreement among the parties
hereto (such date of the Closing being hereinafter referred to as the “Closing
Date”). The exchange of executed documents and other materials to be
delivered at the Closing by facsimile or other electronic copy shall be deemed
sufficient.

          2.9          Transactions
to Be Effected at the Closing. At the Closing, and as a condition to the
Purchaser’s and the Seller’s obligation to close:

	
  

 	
  

 
	
  

 	
                (a)          the
 Seller shall deliver to the Purchaser (i) appropriately executed bills of
 sale, assignments and other instruments of transfer pursuant to Section 5.2(e)
 relating to the Acquired Assets in form and substance satisfactory to the
 Purchaser, (ii) a certificate (dated not more than ten days prior to Closing)
 as to the good standing of Seller and Harvest, LLC in its jurisdiction of
 organization, (iii) a certificate of an officer of the Seller, dated as of
 the Closing Date, (x) attaching true and correct copies of the resolutions or
 consents of the board and members authorizing and approving this Agreement
 and the transactions contemplated hereby, (y) certifying that the
 representations and warranties contained in Article III are true and correct
 in all respects as of the date of the Closing, (iv) and such other documents
 as the Purchaser may reasonably request to demonstrate satisfaction of the
 conditions and compliance with the agreements set forth in this Agreement;
 and 

 
	
  

 	
  

 
	
  

 	
                (b)          the
 Purchaser shall deliver to the Seller (i) payment of that portion of the
 purchase price for the Acquired Assets due at the Closing as provided in
 Section 1.3(a), and (ii) such other documents as the Seller and Harvest, LLC
 may reasonably request to demonstrate satisfaction of the conditions and
 compliance with the agreements set forth in this Agreement.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

          3.1          Representations
and Warranties of the Seller, Harvest, LLC and the Members. The Seller, Harvest, LLC and the Members, jointly and severally,
hereby represent and warrant to, and agree with, the Purchaser, with the
intention that the Purchaser may rely upon the same in connection with its
performance of its obligations under this Agreement, that as of the date hereof
and as of the Closing Date the following:

	
  

 	
  

 
	
  

 	
                (a)          Organization,
 Standing and Power. The Seller is a corporation duly organized, validly
 existing and in good standing under the laws of its state of formation or
 organization and has all requisite corporate power and authority to own the
 Acquired Assets and to carry on its business related thereto. Harvest LLC is a
 limited liability company duly organized, validly existing and in good
 standing under the laws of its state of formation or organization and has all
 requisite corporate power and authority to own the Acquired Assets and to
 carry on its business related thereto.

 

39

	
  

 	
  

 
	
  

 	
                (b)          Authority.
 The Seller, Harvest, LLC and the Members each has all requisite corporate or
 company power and authority to execute, deliver and perform its obligations
 under this Agreement and to transfer title to the Acquired Assets. The
 execution and delivery of this Agreement and the transfer of title to the
 Acquired Assets have been duly authorized by all necessary corporate or
 company action on the part of the Seller and Harvest, LLC, including the
 approval of its members and board of directors or governors. This Agreement
 has been duly executed and delivered by the Seller, Harvest, LLC and the
 Members and constitutes a valid and binding obligation of the Seller,
 Harvest, LLC and the Members enforceable in accordance with its terms except
 as enforcement may be limited by bankruptcy, insolvency or other similar laws
 affecting the enforcement of creditors’ rights generally. The execution,
 delivery and performance of this Agreement by the Seller, Harvest, LLC and
 the Members do not (i) violate any law, (ii) conflict with any provision of
 the certificate of organization, by-laws, operating agreement or member
 control agreement of the Seller, Harvest, LLC or the Members or result in the
 creation of any Lien (as defined in Section 3.1(e)) upon any of the Acquired
 Assets pursuant to any mortgage, indenture, lease, agreement or other
 instrument to which the Seller, Harvest, LLC or any Member is a party or by
 which the Seller, the Members or any of their properties is bound, (iii)
 result in a default (with or without notice or lapse of time or both) or give
 rise to a right of termination, cancellation or acceleration or to loss of a
 benefit under any contract, agreement, indenture or instrument to which
 Seller, Harvest, LLC or any Member is a party or any permit, concession,
 franchise or license included in the Acquired Assets or (iv) require the
 consent, approval, order or authorization of, or the registration,
 declaration or filing with, any court, administrative agency or commission or
 other governmental authority or instrumentality, domestic or foreign (a “Governmental
 Entity”) or any individual, corporation, partnership, joint venture,
 trust, business association or other entity (hereinafter, a “Person”,
 which term shall include a Governmental Entity).

 
	
  

 	
  

 
	
  

 	
                (c)          Compliance
 with Applicable Laws. To the best knowledge of the Seller, Harvest, LLC
 and the Members, the Seller and Harvest, LLC each has complied in all
 material respects with all laws, regulations, rules and orders of
 Governmental Entities applicable to the Acquired Assets (including all
 applicable environmental laws, rules and regulations). Neither the Seller nor
 Harvest, LLC has received any notice of any asserted violation of any such
 laws, regulations, rules or orders. No investigation or review by any
 Governmental Entity with respect to any of the Acquired Assets is pending or
 has been threatened, nor has any Governmental Entity indicated an intention
 to conduct the same.

 
	
  

 	
  

 
	
  

 	
                (d)          Litigation.
 There is no suit, action or proceeding pending, or, to the knowledge of the
 Seller, Harvest, LLC and the Members, threatened against, by or affecting the
 Seller or Harvest, LLC, nor is there any judgment, decree, injunction, rule
 or order of any Governmental Entity or arbitrator outstanding, in each case
 which (i) adversely affects or could adversely affect the Acquired Assets or
 (ii) seeks to enjoin or prohibit any of the transactions contemplated by this
 Agreement.

 
	
  

 	
  

 
	
  

 	
                (e)          Title
 to Acquired Assets. The Seller owns good, clear and marketable title to
 all the Acquired Assets free and clear of all mortgages, liens, security
 interests, encumbrances, claims, charges, licenses, pledges, limitations or
 restrictions of any nature whatsoever (collectively, “Liens”). At the
 Closing, the Purchaser shall acquire the Acquired Assets free and clear of
 all Liens.

 
	
  

 	
  

 
	
  

 	
                (f)          Intellectual
 Property. The Seller is the sole and exclusive owner of all of the
 Intellectual Property Rights. From and after the Closing, the Purchaser may
 exercise the rights in the Intellectual Property and use the Intellectual
 Property in the conduct of the Business in the manner and to the extent
 presently conducted by the Seller and previously conducted by Harvest, LLC,
 without infringement of any third party intellectual property right, the
 requirement of any license to any third party technology, invention or
 intellectual property right, or any obligation to make any payment of any
 kind to any third party. Neither the Seller nor Harvest, LLC (i) has licensed
 or granted to any third party any rights under any Intellectual Property
 Rights; (ii) has received any notices of infringement or misappropriation by,
 or conflict with the rights of, any third party with respect to the
 Intellectual Property Rights; and (iii) has violated and is violating,
 infringing upon or otherwise acting adversely to any copyright, trademark,
 trademark rights, patent, patent rights, service mark, service name, trade
 name, licenses, confidential information or trade secrets owned by any third
 party, and there is no claim or action by any third party pending or
 threatened with respect thereto.

 
	
  

 	
  

 
	
  

 	
                (g)          Fair
Value. The Seller, Harvest, LLC and the Members will, directly and indirectly,
derive substantial economic benefit from the transactions set forth in and
contemplated by the Agreement and are receiving fair and reasonably equivalent
value in exchange for the sale, assignment, transfer, conveyance and delivery
of the Acquired Assets and other obligations and transactions set forth in and
contemplated by the Agreement.

 
	
  

 	
  

 
	
  

 	
                (h)          Solvency.
None of the Seller, Harvest, LLC or the Members is insolvent. After giving
effect to the consummation of the transaction contemplated by this Agreement,
the Seller and Harvest, LLC each (a) shall be able to pay its debts as they
become due and shall own property which has a fair saleable value greater than
the amounts required to pay its debts (including a reasonable estimate of the
amount of all contingent liabilities), (b) shall have adequate capital to carry
on its business, and (c) no transfer of property is being made and no
obligation is being incurred in connection with the transactions contemplated
by this Agreement with the present intent to hinder, delay or defraud either
present or future creditors of the Seller, Harvest, LLC or the Members.

 
	
  

 	
  

 
	
  

 	
                (i)          Material
Facts. Neither the Seller nor Harvest, LLC or the Members has withheld from the
Purchaser any material facts relating to the Acquired Assets or the Business.

 

40

	
  

 	
  

 
	
  

 	
 (j)          Reliance. The Seller,
 Harvest, LLC and the Members hereby acknowledge that the Purchaser is actually relying, and has the right to actually rely, upon
 all of the facts, covenants, representations and warranties contained in this Agreement or in any document or instrument delivered
 by the Seller, Harvest, LLC or the Members in connection with this Agreement.

 

          3.2          Representations
and Warranties of the Purchaser. The Purchaser hereby represents and warrants to, and agree with, the Seller, Harvest, LLC
and the Members, with the intention that such parties may rely upon the same in connection with its or their performance of its
obligations under this Agreement, that as of the date hereof and as of the Closing Date the following:

	
  

 	
  

 
	
  

 	
 (a)          Organization, Good Standing
 and Power. The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of its state
 of incorporation and has all requisite corporate power and authority to execute this Agreement and to consummate the transactions
 contemplated hereby.

 
	
  

 	
  

 
	
  

 	
 (b)          Authority. The execution
 and delivery of this Agreement and the consummation of the transactions contemplated hereby has been duly authorized by all necessary
 corporate action on the part of the Purchaser. This Agreement has been duly executed and delivered by the Purchaser and constitutes
 the valid and binding obligation of the Purchaser enforceable in accordance with its terms except as enforcement may be limited
 by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors’ rights generally. The execution
 and delivery of this Agreement by the Purchaser does not (i) violate any law, (ii) conflict with any provision of the certificate
 of incorporation or by-laws of the Purchaser or (iii) require the consent, approval, order or authorization of, or the registration,
 declaration or filing with, any Governmental Entity or other Person.

 

ARTICLE IV

COVENANTS

          4.1          Covenants
of the Seller Relating to Conduct of Business. During the period from the date
of this Agreement and continuing until the Closing, the Seller and Harvest, LLC
each agrees (except as expressly provided by this Agreement or to the extent
that Purchaser shall otherwise consent in writing) that:

	
  

 	
  

 
	
  

 	
 (a)           Ordinary Course. The
 Seller and Harvest, LLC shall carry on the Business and operate the Acquired Assets in the usual, regular and ordinary course
 in substantially the same manner as heretofore and use all reasonable efforts to preserve its relationships with customers, suppliers
 and others having dealings with the Seller and Harvest, LLC related to the Business to the end that its goodwill and ongoing
 Business shall be unimpaired in all material respects at the Closing.

 
	
  

 	
  

 
	
  

 	
 (b)          No Dispositions. The
 Seller and Harvest, LLC shall not sell, license, lease, transfer or otherwise dispose of or encumber, or agree to sell, license,
 lease, transfer or otherwise dispose of or encumber, any of the Acquired Assets.

 
	
  

 	
  

 
	
  

 	
 (c)          No Acquisitions or Commitments.
 The Seller and Harvest, LLC shall not acquire any assets or enter into any contract for the acquisition of any property or service
 related to the Acquired Assets other than as consistent with prior practice.

 
	
  

 	
  

 
	
  

 	
 (d)          Other Actions. The
 Seller, Harvest, LLC and the Members shall not take any action that would or might result in any of the representations and warranties
 of the Seller or the Members set forth in this Agreement becoming untrue or in any of the conditions of the Closing set forth
 in Article V not being satisfied.

 

           4.2         Legal
Conditions to Closing. The Purchaser and the Seller will take all reasonable actions necessary to comply promptly with all
legal requirements which may be imposed on it with respect to the Closing and will promptly cooperate with and furnish information
to each other in connection with any such legal requirements. The Purchaser and the Seller will take all reasonable actions necessary
to obtain (and will cooperate with each other in obtaining) any consent, authorization, order or approval of, or any exemption
by, any Person, required to be obtained or made by it in connection with any of the transactions contemplated by this Agreement.

           4.3         Expenses.
Whether or not the Closing takes place, all costs and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses. 

           4.4         Brokers
or Finders. The Purchaser, the Seller and Harvest, LLC each represent to the other party, as to itself and its affiliates,
that no agent, broker, investment banker or other firm or person is or will be entitled to any broker’s or finder’s
fee or any other commission or similar fee in connection with any of the transactions contemplated by this Agreement and each
of Purchaser and Seller respectively agrees to indemnify and hold the other harmless from and against any and all claims, liabilities
or obligations with respect to any other fees, commissions, or expenses asserted by any person on the basis of any act or statement
alleged to have been made by such party or its affiliate.

41

           4.5         Indemnification.

	
  

 	
  

 
	
  

 	
                (a)          The
 Seller, Harvest, LLC and the Members, jointly and severally, hereby agrees to
 indemnify the Purchaser and its affiliates and their respective officers,
 directors, employees, stockholders, agents and representatives against, and
 agrees to hold them harmless from, any loss, liability, claim, damage or
 expense (including reasonable legal fees and expenses), as incurred, for or
 on account of or arising from or in connection with or otherwise with respect
 to or any breach on the part of the Seller of any representation or warranty
 contained in this Agreement. In addition, the Seller shall also indemnify the
 Purchaser and its affiliates against, and hold them harmless from, any loss,
 liability, claim, damage or expense (including reasonable legal fees and
 expenses) arising out of, or resulting from the ownership of the Acquired
 Assets or operation of the Business prior to the Closing Date or the Excluded
 Liabilities.

 
	
  

 	
  

 
	
  

 	
                (b)          The
 Purchaser hereby agrees to indemnify the Seller and its affiliates and their
 respective officers, directors, employees, stockholders, agents and
 representatives against, and agrees to hold them harmless from, any loss,
 liability, claim, damage or expense (including reasonable legal fees and
 expenses), as incurred, for or on account of or arising from or in connection
 with or otherwise with respect to any breach of any representation or
 warranty of the Purchaser contained in this Agreement.

 
	
  

 	
  

 
	
  

 	
                (c)          If
 the Purchaser shall be entitled to indemnification pursuant to this
 Agreement, the Purchaser shall, in addition to any other right hereunder,
 have the right to set-off the amount of any and all such claims against the
 Milestone Payment Amounts, if any, and any other amounts for which the
 Purchaser may be required to pay to the Seller under this Agreement.

 

           4.6         Additional
Agreements. The Seller, Harvest, LLC and the Members will use all reasonable efforts to facilitate and effect the implementation
of the transfer of the Acquired Assets to the Purchaser and, for such purpose but without limitation, the Seller and Harvest,
LLC promptly will at and after the Closing Date execute and deliver to the Purchaser such assignments, deeds, bills of sale, consents
and other instruments necessary to effect the transfer of the Acquired Assets to the Purchaser as contemplated hereby, as the
Purchaser or its counsel may reasonably request as necessary or desirable for such purpose. If, in order properly to prepare its
tax returns, other documents or reports required to be filed with Governmental Entities or its financial statements, it is necessary
that the Purchaser be furnished with additional information relating exclusively to the Acquired Assets or the Seller and such
information is in the Seller’s, Harvest, LLC’s or the Members’ possession, the Seller, Harvest, LLC and the Members
will use all reasonable efforts to furnish such information to the Purchaser.

           4.7         Services.
The Seller hereby covenants and agrees to provide certain services to the Purchaser following the Closing (the “Services”)
without any additional compensation or payment, including Services set forth on and contemplated by Exhibit B, which is attached
hereto and made a part hereof, that provide for (a) Product improvements; (b) training at the Purchaser’s headquarters; (c)
demonstration systems for the Products; and (d) field support for the first three (3) installations of the Products. The Seller
may also render certain other services to the Purchaser; provided, however, that such services would be rendered, if at all, pursuant
to the terms of a separate services or independent contractor agreement containing terms that are mutually acceptable to the parties
(“Services Agreement”). All inventions, concepts, creations and work product arising from the Services rendered by or
on behalf of the Seller to the Purchaser, whether rendered pursuant to this Agreement or a separate Services Agreement, shall
be for the exclusive benefit of the Purchaser, shall be deemed “works made for hire,” the exclusive property of the
Purchaser and assigned to the Purchaser.

           4.8         Right
of First Review. If at any time following the Closing and during the Measurement Period the Seller or Harvest, LLC decides
to explore the possibility of selling, licensing or transferring any interest in technologies or products that it develops or
acquires following the Closing, the Seller and Harvest, LLC each hereby covenants and agrees to use reasonable efforts to give
written notice to the Purchaser of the same in order to provide the Purchaser with an opportunity to evaluate such technologies
or products and express an interest which it may have in any such transaction before proceeding beyond a preliminary phase of
discussions with any third party (the “ROFR”). It is expressly understood and agreed that neither the Seller nor Harvest,
LLC has any obligation to the Purchaser under this Section 4.8 other than as expressed herein and neither party is obligated to
proceed with any negotiations or transactions or accept any terms or conditions which are not fully acceptable to the parties
in their sole discretion. 

42

           4.9         Covenant
Not to Compete. Each of the Seller, Harvest, LLC and the Members hereby represents, warrants, covenants and agrees with the
Purchaser that for a period of five (5) years following the Closing Date, that neither the Seller, Harvest, LLC nor any of their
governors, directors, officers, shareholders, members, employees, agents, or affiliates nor any of the Members will (a) anywhere
within the United States of America or throughout the world, in any manner whatsoever, own, manage, operate, control or participate
in, be employed by or be connected as a consultant, independent contractor or service provider with or the ownership, management,
operation, control of any business of the type that designs, manufactures, distributes or sells products that are similar in purpose
to the Products or otherwise, directly or indirectly, engage in the Business, or (b) take any other action which is designed,
intended or might reasonably be anticipated with respect to the Products to compete with the Purchaser or injure or diminish the
goodwill associated with the Business or the Acquired Assets. Notwithstanding the restrictive covenants contained in the preceding
sentence, nothing in this Agreement shall be construed to prohibit or limit in any way the Seller of the Members or any of their
affiliates from investing in any class of securities of any corporation which class of securities are listed on the National Securities
Exchange or registered pursuant to Section 12(g) of the Securities Exchange Act of 1934 and traded in the over-the-counter market,
if Seller and its affiliates, collectively, shall beneficially own less than 5% or any class of securities of such corporation.

           4.10       Confidentiality
and Use Restrictions. 

	
  

 	
  

 
	
  

 	
                  (a)         Neither
 the Seller, Harvest, LLC nor any of the Members or any of their affiliates
 will, without the prior written consent of the Purchaser, at any time after
 the Closing Date (a) disclose any Confidential Information relating to any
 material aspect of the Business or the Acquired Assets to any person or
 entity (including but not limited to any the Technologies, the Documentation,
 the Intellectual Property Rights and other information relating to the
 Products or the Business not otherwise publicly available), or (b) use or
 exploit any such Confidential Information for its or his own benefit or for
 the benefit of any other person or entity other than the Purchaser. 

 
	
  

 	
  

 
	
  

 	
                  (b)         In
 the event that the Seller or Harvest, LLC furnishes any of its Confidential
 Information to the Purchaser in connection with the ROFR set forth in Section
 4.8, the Purchaser agrees that it will not, without the prior written consent
 of the Seller, at any time after the Closing Date (a) disclose any such
 Confidential Information to any other person or entity except to the Purchaser’s
 directors, officers, employees, advisors and representatives who have a need
 to know in order to evaluate the Confidential Information furnished by the
 Seller in connection with the ROFR, or (b) use or exploit any such
 Confidential Information for its benefit or for the benefit of any other
 person or entity other than to further the purposes of the ROFR or other
 provisions of this Agreement.

 
	
  

 	
  

 
	
  

 	
                  (c)         The
 term “Confidential Information” means all confidential and proprietary technical,
 business and other information which (i) is possessed or hereafter acquired
 by a party and disclosed to the other party, (ii) derives economic value from
 not being generally known to persons other than the disclosing party, and
 (iii) is the subject of efforts by the disclosing party that are reasonable
 under the circumstances to maintain its secrecy or confidentiality. The term
 shall not include any information which (a) at the time of disclosure is, or
 thereafter becomes, generally available to and known by the public (other
 than as a result of a disclosure directly or indirectly by the recipient),
 (b) at the time of disclosure is, or thereafter becomes, available to the
 recipient on a non-confidential basis from a source other than the disclosing
 party, provided that such source is not and was not bound by a
 confidentiality agreement with the disclosing party or any other legal
 obligation of non-disclosure, or (c) independently acquired or developed by
 the recipient without violating any of its obligations under this Agreement
 or any other agreement by, between or among the parties.

 

           4.11          Reasonableness.
Each of the Seller, Harvest, LLC and the Members acknowledges that the provisions of Section 4.9 and Section 4.10(a) served as
a material inducement to the Purchaser to enter into this Agreement and consummate the transactions contemplated hereby and that
the restrictions contained herein are reasonably necessary to protect the legitimate interests of the Purchaser, are reasonable
in scope and duration and are not unduly restrictive.

           4.12          Injunctive
Relief. Each of the Seller, Harvest, LLC, the Members and the Purchaser acknowledges and agrees that a breach of any of the
terms of Section 4.9 and Section 4.10(a) will render irreparable harm to the Purchaser, and the Purchaser acknowledges and agrees
that a breach of any of the terms of Section 4.10(b) will render irreparable harm to the Seller and Harvest, LLC. Each of the
Seller, Harvest, LLC, the Members and the Purchaser acknowledges and agrees that a remedy at law for a breach of such provisions
is inadequate, and that the non-breaching party shall therefore be entitled to any and all equitable relief, including but not
limited to, injunctive relief.

ARTICLE V

CONDITIONS PRECEDENT

           5.1          Conditions
to Each Party’s Obligation. The obligations of the Purchaser to purchase the Acquired Assets and the obligation of the
Seller to sell the Acquired Assets to the Purchaser shall be subject to the satisfaction prior to the Closing Date of the following
conditions:

	
  

 	
  

 
	
  

 	
                 (a)          Approvals.
 All authorizations, consents, orders or approvals of, or declarations or filings with, or expirations of waiting periods imposed
 by, any Governmental Entity necessary for the consummation of the transactions contemplated by this Agreement shall have been
 obtained or filed or shall have occurred.

 
	
  

 	
  

 
	
  

 	
                 (b)          No
 Injunctions or Restraints. No temporary restraining order, preliminary or permanent injunction or other legal restraint or
 prohibition preventing the transfer of title to the Acquired Assets shall be in effect.

 

           5.2          Conditions
to Obligations of the Purchaser. The obligations of the Purchaser to purchase the Acquired Assets are subject to the satisfaction
on and as of the Closing Date of each of the following conditions:

	
  

 	
  

 
	
  

 	
                 (a)          Representations
 and Warranties. The representations and warranties of the Seller, Harvest, LLC and the Members set forth in this Agreement
 shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made
 on and as of the Closing Date, except as otherwise contemplated by this Agreement, and Purchaser shall have received a certificate
 signed by a duly authorized officer of the Seller and Harvest, LLC to such effect.

 

43

	
  

 	
  

 
	
  

 	
                 (b)          Performance
 of Obligations of the Seller. The Seller and Harvest, LLC each shall have performed all obligations required to be performed
 by it under this Agreement at or prior to the Closing Date, and the Purchaser shall have received a certificate signed by a duly
 authorized officer of the Seller and Harvest, LLC to such effect.

 

          5.3          Conditions
to the Seller’s Obligation. The obligation of the Seller to sell the Acquired Assets is subject to the satisfaction on
and as of the Closing Date of each of the following conditions:

	
  

 	
  

 
	
  

 	
                 (a)          Representations
 and Warranties. The representations and warranties of the Purchaser set forth in this Agreement shall be true and correct
 in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing
 Date, except as otherwise contemplated by this Agreement, and the Seller shall have received a certificate signed by an officer
 of the Purchaser to such effect.

 
	
  

 	
  

 
	
  

 	
                 (b)          Performance
 of Obligations of the Purchaser. The Purchaser shall have performed all obligations required to be performed by them under
 this Agreement prior to the Closing Date, and the Seller shall have received a certificate signed by an officer of the Purchaser
 to such effect.

 

ARTICLE VI

TERMINATION AND WAIVER

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 6.1

 	Termination. This Agreement may be terminated at any time prior to the Closing:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (a)

 	
 by mutual consent of
 Purchaser and the Seller; or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (b)

 	
 by either Purchaser or the
 Seller if the Closing shall not have occurred before February 14, 2014.

 

          6.2          Extension;
Waiver. At any time prior to the Closing, the parties hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations
and warranties contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements
or conditions contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only
if set forth in a written instrument signed on behalf of such party.

44

ARTICLE VII

GENERAL PROVISIONS

           7.1          Notices.
All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or mailed
by registered or certified mail (return receipt requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 if to the Purchaser, to:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Electro-Sensors, Inc.

 6111 Blue Circle Drive

 Minnetonka, MN 55343

 Attn: David L. Klenk

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 with a copy to:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Lindquist & Vennum LLP

 4200 IDS Center

 80 South Eighth Street

 Minneapolis, MN 55402

 Attn: George H. Singer

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 if to the Seller, Harvest,
 LLC or the Members, to:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Harvest Engineering Inc.

 25035 W. Black Rd.

 Shorewood, IL 60404

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 with a copy to:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Thomas E. Carey, Esq.

 3033 W. Jefferson Street, Suite 208

 Joliet, IL 60435

 

           7.2          Interpretation.
The language used in this Agreement will be deemed to be the language chosen by all of the parties hereto to express their mutual
intention and no rule of strict construction will be applied against any party. When a reference is made in this Agreement to
a Section, Schedule or Exhibit, such reference shall be to a Section, Schedule or Exhibit of this Agreement unless otherwise indicated.
The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Whenever the words “include”, “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words “without limitation”.

           7.3          Survival
of Representations. The representations, warranties, covenants and agreements contained in this Agreement and in any document
delivered in connection herewith shall remain in full force and effect following the Closing.

           7.4          Counterparts.
This Agreement may be executed by facsimile or in pdf and in two or more counterparts, all of which shall be considered one and
the same agreement and shall become effective when two or more counterparts have been signed by each of the parties and delivered
to the other parties, it being understood that all parties need not sign the same counterpart.

           7.5          Entire
Agreement; No Third-Party Beneficiaries. This Agreement (including the documents and instruments referred to herein) (a) constitutes
the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect
to the subject matter hereof and (b) is not intended to confer upon any person other than the parties hereto any rights or remedies
hereunder.

           7.6          Governing
Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota (without
regard to its conflicts of laws principles). Any cause of action arising out of the execution or performance of this Agreement
shall be venued in a court of competent jurisdiction located in the State of Minnesota and all of the parties hereto consent to
the jurisdiction of such courts and hereby waive any argument that venue in any such forum is not convenient.

           7.7          Waver
of Jury Trial. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY MATTER,
CAUSE OR DISPUTE ARISING OUT THIS AGREEMENT OR THE TRANSACTIONS SET FORTH HEREIN OR CONTEMPLATED HEREBY.

45

           7.8          Publicity.
So long as this Agreement is in effect until the Closing Date, and unless otherwise required by applicable law, neither the Seller
nor the Purchaser shall issue or cause the publication of any press release or other public announcement with respect to the transactions
contemplated by this Agreement without the consent of the other party, which consent shall not be unreasonably withheld.

           7.9          Assignment.
Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto
without the prior written consent of the other parties. This Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.

           7.10        Amendments.
No amendment, modification or waiver of this Agreement will be effective unless specifically made in writing and duly signed by
the party to be bound thereby. No other course of dealing between or among any of the parties or any delay in exercising any rights
pursuant to this Agreement will operate as a waiver of any rights of any party.

46

          IN
WITNESS WHEREOF, the Purchaser, the Seller, Harvest, LLC and the Members have
caused this Agreement to be signed by their respective representatives
thereunto duly authorized, all as of the date first written above.

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 SELLER:

 
	
  

 	
  

 
	
  

 	
 HARVEST ENGINEERING INC.

 
	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Bruce Meyer

 	
  

 
	
  

 	
 Its:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 HARVEST, LLC:

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 HARVEST ENGINEERING LLC

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Bruce Meyer

 	
  

 
	
  

 	
 Its:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 MEMBERS:

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 BRUCE MEYER

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 /s/ Bruce Meyer

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 STEPHEN MEYER

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 /s/ Stephen Meyer

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 PURCHASER:

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 ELECTRO-SENSORS, INC.

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ David Klenk

 	
  

 
	
  

 	
 Its:

 	
 President

 	
  

 

47

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