SECURITIES ACQUISITION AND PUT AGREEMENT

Exhibit 10.1

SECURITIES ACQUISITION AND PUT AGREEMENT

     THIS SECURITIES ACQUISITION AND PUT AGREEMENT (the "Agreement") is made and entered into on November 21, 2006, by and among TRANSCONTINENTAL REALTY INVESTORS, INC., a Nevada corporation (" TCI " or the " Company "), LEMAN DEVELOPMENT, LTD., a Texas limited partnership (" Leman "), acting by, through and under its General Partner, WINDMILL/KAUFMAN, LTD., a Texas limited partnership (" WKL "), in turn acting by, through and under its General Partner, SIEPELA DEVELOPMENT CORPORATION, a Texas corporation (" Siepela "); and KAUFMAN LAND PARTNERS, LTD., a Texas limited partnership (" KLP "), acting by, through and under its General Partner, KAUFMAN LAND MANAGEMENT, LLC, a Texas limited liability company (" Kaufman LLC ") (Leman and KLP and their respective successors and assigns hereunder are sometimes collectively called "Holders," and all of the signatories hereto are collectively called the "Parties"); and

WITNESSETH:

     WHEREAS, the Holders are also parties to two separate contracts (the " Contracts ") covering and relating to the purchase and sale of certain real property and related assets consisting of approximately 3,242 acres of land, more or less, known as part of Windmill Farms, Kaufman County, Texas (the " Real Property ");

     WHEREAS, pursuant to the Contracts, Prime Income Asset Management, Inc., a Nevada corporation ("PIAMI"), and/or TCI and/or one or more of their respective affiliates, are purchasing the Real Property and related assets from Holders upon the terms and conditions set forth in the Contracts;

     WHEREAS, pursuant to the payment provisions of the Contracts, PIAMI is obligated to deliver, in partial payment for the Real Property, certain shares of a newly-designated Series D Cumulative Preferred Stock of TCI;

     WHEREAS, TCI is authorized by its Articles of Incorporation, as amended, to issue up to 10,000,000 shares of ‘Preferred Stock, par value $0.01 per share;’

     WHEREAS, TCI’s Board of Directors has the authority from time to time to designate one or more series of any number of shares of Preferred Stock by filing one or more Certificates of Designation for such stock with the Secretary of State of Nevada;

     WHEREAS, TCI has designated a new series of Preferred Stock of TCI denominated as the Series D Cumulative Preferred Stock and to issue such Series D Preferred Stock to enable an affiliate of TCI to meet the terms of the Contracts;

     WHEREAS, PIAMI has assigned the Purchaser’s rights under the Contracts to TCL, and TCI has agreed to issue the Preferred Stock to Leman and Kaufman as part of the "Purchase Price" thereunder;

     WHEREAS, as a material inducement to the Holders to accept the Series D Preferred Stock issued by TCI, and in accordance with the terms of the Contracts, each of the Holders desires the right to require, upon the occurrence of certain contingencies, that TCI repurchase the shares of Series D Preferred Stock from the Holders as set forth below;

     WHEREAS, the Parties hereto desire to delineate certain other rights, obligations and governance arrangements with respect to such Series D Preferred Stock.

     ACCORDINGLY, for an in consideration of the foregoing premises, the mutual promises, covenants, representations and warranties contained herein, and to facilitate the delivery of the Series D Preferred Stock as part of the consideration for the Real Property under the Contracts, and for other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged by all of the Parties hereto, the Parties hereto do hereby agree as follows:

     1. Adoption of Recitals. All of the recitals set forth above are hereby adopted, confirmed, ratified and approved in the same manner as if fully recopied herein.

     2. Designation of Preferred Stock. Prior to or contemporaneously with the execution of this Agreement, the Company has or will designate a new series of its Preferred Stock pursuant to that certain Certificate of Designations substantially in the form annexed hereby as Exhibit "A" (the "Certificate of Designations") , pursuant to which the Company shall designate a new Series D Cumulative Preferred Stock consisting of 100,000 shares and having a liquidation value of $100 per share (the "Series D Preferred Stock") , to be issued by TCI pursuant to the terms and conditions hereof and in conformity with the Certificate of Designations. The Series D Preferred Stock will have, among other rights, the right to cumulative cash dividends based upon a $100 per share valuation at the rates set forth in the Certificate of Designation, payable quarterly; the right to payment of $100 per share plus accrued and unpaid dividends in the event of dissolution, liquidation or winding-up of TCI before any distribution is made by TCI to its junior stockholders; and the right to mandatory redemption at any time after September 30, 2011 at a price of $100 per share plus accrued and unpaid dividends. The Series D Preferred Stock shall have no right to conversion into any other securities of the Company and voting rights only as required by law, all as set forth in the Certificate of Designations.

     3.  Distribution of Securities. Prior to or contemporaneously with the closing under the Contracts (the "Closing"), the Company shall file the Certificate of Designations with the Secretary of State of Nevada, and at such Closing, TCI shall issue and deliver 100,000 shares of the Series D Preferred Stock to Leman and Kaufman of the number of shares of Series D Preferred Stock set forth opposite their respective names below:

     4.  Representations and Warranties of Leman and KLP as to Shares of Series D Preferred Stock. Each of Leman and KLP separately represents, warrants and acknowledges to TCI as follows:

     (a) Accredited Investor. Each of Leman and KLP is an "accredited investor" within the meaning of Regulation D, Rule 501 (a), promulgated under the Securities Act of 1933, as amended, and each of Leman and KLP is acquiring the shares of Series D Preferred Stock (the "Shares") for its own account and not with a view to the distribution thereof, in whole or part. Each of Leman and KLP hereby confers authority upon TCI (i) not to transfer any of the Shares until TCI has received written confirmation from counsel acceptable to TCI to the effect that any such transfer does not require that the Series D Preferred Stock or such transfer be registered under the Securities Act of 1933, as amended (provided that no such opinion shall be required in the case of a transfer to TCI), and (ii) to affix to the face of the certificate or certificates representing the Shares a legend with respect to the representations set forth herein in the following form or in such other similar form as shall be approved by counsel to TCI:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE PLEDGED OR HYPOTHECATED, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL OF THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.

     (b) Authorization. Each of Leman and KLP has all requisite power and authority to enter into and perform this Agreement and to acquire the securities to be issued in connection herewith, and Leman and KLP have each obtained all requisite consents, approvals, permits and authorizations for each of Leman and KLP to participate in the Closing of this Agreement and to receive the Shares to be issued to each.

     (c) Validity and Binding Effect . This Agreement constitutes each of Leman’s and KLP’s valid and legally binding obligations, enforceable according to its terms, except as such enforcement may be limited or affected by the availability of equitable remedies such as specific performance, and by applicable bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting the enforcement of creditors’ rights, including court decisions and general equity principles relating thereto.

     (d) Acquisition Entirely for Own Account . The Shares to be acquired by each of Leman and/or KLP will be acquired for investment for each of Leman’s and KLP’s respective own accounts, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof. Neither Leman nor KLP has any present intention of selling, granting any participation in, or otherwise distributing any of the Shares. Neither

of Leman or KLP has any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Shares.

     (e) Disclosure of Information. Each of Leman and KLP acknowledges that TCI is a reporting company under the Securities Exchange Act of 1934 and as such is required to and does file with the Securities and Exchange Commission ("SEC") annual reports on Form 10-K, quarterly reports on Form 10-Q, other periodic reports on Form 8-K, proxy statements and other information which is available for public review on the SEC’s website at www.sec.gov. Information is also available on TCI’s website at www.transconrealty-invest.com. Each of Leman and KLP has reviewed the publicly-available information it considers necessary or appropriate for deciding whether to acquire the securities. Each of Leman and KLP further represents that it has had an opportunity to ask questions and receive answers from representatives of TCI regarding the terms and conditions of the offering of the Shares.

     (f) Investment Experience. Each of Leman and KLP (a) is an investor in securities of companies investing in real estate and acknowledges that it understands that an investment in real estate is inherently somewhat speculative and any anticipated returns are dependent upon a number of factors beyond the control of TCI; (b) is able to fend for itself and bear the economic risk of its investment; and (c) has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Shares.

     (g) Restricted Securities. Each of Leman and KLP understands that the Shares each is acquiring ate characterized as "restricted securities" under the securities laws of the United States in as much as they are being acquired from TCI in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act of 1933, as amended (the "Act’), only in certain limited circumstances. In this connection, each of Leman and KLP represents that it is familiar with SEC Rule 144, as presently in effect, understands the resale limitations imposed thereby and by the Act, and understands that although TCI is a reporting company under the Securities Exchange Act of 1934, Rule 144 will not be available for resales of the Shares. Each of Leman and KLP also understands and acknowledges that there will be no available public market for the Shares and that although TCI has a class of equity securities listed and traded on the New York Stock Exchange, the securities being acquired by Leman and/or KLP will not be listed or traded on the New York Stock Exchange or any other self-regulated organization or exchange.

     (h) Further Limitations on Disposition. Without in any way limiting the representations set forth above, and subject to any requirement of law that its property remain within its control, each of Leman and KLP further agrees not to make any disposition of all or any portion of the Shares to any party other than TCI during the first two years after the date of this Agreement, unless:

     (i) There is then in effect a registration statement under the Act covering such proposed disposition, and such disposition is made in accordance with such registration statement; or

     (ii) Each of Leman and KLP, as applicable, shall have notified TCI of the proposed disposition and shall have furnished TCI with a detailed statement of the circumstances surrounding the proposed disposition, and (ii) if reasonably requested by TCI, each of Leman and TCI, shall have furnished TCI with an opinion of counsel reasonably satisfactory to TCI that such disposition will not require registration of such shares under the Act; or

     (iii) The transfer is made without consideration by either of Leman or KLP, as the case may be, to an affiliate of, or successor entity to, either of Leman or KLP, as the case may be, if the transferee agrees in writing to be subject to the terms hereof to the same extent as if he were the original recipient hereunder.

     5.  Representations and Warranties of TCI . TCI hereby represents and warrants to each Leman and KLP as follows:

(a) Organization and Authority . TCI is a corporation duly authorized, validly existing and in good standing under the laws of the State of Nevada. TCI has the full power and authority (corporate and other) to execute and file the Certificate of Designations and to perform its obligations under the Certificate of Designations and under this Agreement to be performed by TCI. The execution, filing and performance of the Certificate of Designations, the issuance of the Series D Preferred Stock thereunder and the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action of TCI. The Series D Preferred Stock is duly and validly issued and is fully paid and nonassessable. The consideration received by TCI for the Series D Preferred Stock is adequate. All necessary filings have been made with the Nevada Secretary of State for the Certificate of Designations and issuance of the Series D Preferred Stock. The execution, filing and performance of the Certificate of Designations, the issuance of the Series D Preferred Stock and the execution, deliver and performance of this Agreement do not conflict with or result in the breach of any organizational documents of TCI or of any contract or agreement binding on TCI, and the Certificate of Designations, the Series D Preferred Stock and this Agreement represent the valid and binding obligation of TCI, enforceable against TCI in accordance with their respective terms, subject only to bankruptcy laws and other laws of general application.

     (b) Availability of Public Documents . TCI is subject to the informational filing requirements of the Securities Exchange Act of 1934, as amended (the " Exchange Act "), and in accordance therewith, is required to file reports, proxy statements and other information with the SEC. TCI is current in its filings with the SEC under the Exchange Act which may be accessed at www.sec.gov . Certain of such filings may also be accessed through TCI’s website at www.transconrealtyinvest.com.

     (c) No Restrictive Covenants . Except for any applicable restrictions under

Nevada state law as of the date of this Agreement, TCI is not a party to any agreement or instrument that contains a restriction or limitation on TCI’s ability to pay dividends on the Series D Preferred Stock or to redeem or repurchase such Series D Preferred Stock in accordance with the terms of the Certificate of Designations or of this Agreement. TCI is not a party to any agreement or instrument that requires TCI to maintain any minimum level of net worth or of liquidity except for property specific loan covenants requiring TCI to maintain certain debt coverage ratios on specific properties. As long as the Series D Preferred Stock shall remain outstanding, TCI shall not enter into covenants that would materially restrict TCI’s ability to pay dividends on the Series D Preferred Stock or to redeem or repurchase such Series D Preferred Stock in accordance with the terms of the Certificate of Designations or of this Agreement.

     6.  Accounting Practices; Delivery to Holders of Certain Public Filings and Financial Information. As long as any shares of Series D Preferred Stock shall remain outstanding, as soon as same are filed with the SEC and in any event within fifteen (15) calendar days thereafter, TCI will cause to be mailed to each of Leman and KLP at their respective addresses for notices a copy of TCI’s Form 10-K and Forms 10-Q, without exhibits. To the extent that TCI’s filing of any such report is delayed beyond any filing date or extension date permitted under the Securities Exchange Act of 1934, or to the extent that TCI shall cease to file with SEC the periodic reports set forth above for any reason, TCI shall instead deliver to a representative selected by the Holders of a majority of the outstanding Series D Preferred Stock (a) as soon as practicable and in any event within one hundred fifteen (115) calendar days after the close of each fiscal year of TCI consolidated audited Financial Statements prepared in accordance with GAAP, US, all in reasonable detail and with an opinion expressed by TCI’s independent public accountants that such Financial Statement have been prepared in accordance with GAAP, US, and fairly present the financial condition and results of operations of TCI and its consolidated subsidiaries as of the dates and for period indicated, and such opinion shall contain no qualifications as to whether TCI will continue as a going concern; and (b) as soon as practical and in any event within sixty (60) calendar days after the close of each fiscal quarter of TCI, unaudited Financial Statements prepared in accordance with GAAP, US (subject to normal year end adjustments which are not material individually or in the aggregate).

     7.  Put Option. Any Holder of the Series D Preferred Stock shall have the option to demand that TCI purchase from such Holder, and on exercise of such option, TCI shall purchase from such Holder at the "Put Price" (as defined below), all of the shares of Series D Preferred Stock held by such Holder at any time and from time to time after the occurrence of a " Put Event " (as defined below), subject to the limitations set forth in this Agreement (such option and reciprocal obligation to purchase are hereinafter referred to as the " Put "). Such Holder may exercise the Put at any time and from time to time by written notice of such exercise to TCI (the "Put Notice") delivered at any time after the " Put Event " The Put Notice shall be the affected Holder’s demand that TCI repurchase from such Holder all, but not less than all, of the shares of Series D Preferred Stock then held by such Holder at a price of $100 per share plus any accrued and unpaid dividends through the date of the payment of such price (such amount is herein determined to be the " Put Price "). Any Put Notice shall set forth a date, which shall not be less than thirty (30) calendar days nor more than sixty (60) calendar days after the date of such Put Notice and which shall be a " Business Day ," for the purchase and sale of the shares of Series D Preferred Stock with respect to which the Put is exercised (a " Put Closing Date "). On or before

the selected Put Closing Date, each Holder exercising the Put shall deliver the certificates evidencing the shares of Series D Preferred Stock held by such Holder and being sold on such Put Closing Date, duly endorsed, free and clear of all " Encumbrances ," as defined in subpart (a) below, to TCI at its principal executive office, and TCI shall on the Put Closing Date pay to such Holder an amount equal to the Put Price multiplied by the number of shares of Series D Preferred Stock that are represented by the certificates so delivered to TCI on or before the Put Closing Date. The amount payable by TCI to any Holder upon exercise of the Put shall be paid by cashier’s check or by wire transfer of funds. If TCI is unable to purchase all of the shares of Series D Preferred Stock to be sold pursuant to the Put on the applicable Put Closing Date because it does not have adequate equity accounts to effect such repurchase under the Nevada General Corporation Law, TCI shall notify such Holders of the number of Shares TCI is so unable to purchase, and TCI shall purchase (on a pro rata basis among all Holders making the Put on the basis of the number of shares held) all of the shares of Series D Preferred Stock that TCI is then permitted to purchase without violating the capital requirements of the Nevada General Corporation Law, and TCI shall purchase the remaining shares covered by a Put as soon thereafter as is possible without violating such equity requirements. For these purposes th