Whitestone REIT (Form: 8-K, Received: 09/16/2010 15:45:39)

Exhibit 10.1

Loan No. 959730

PROMISSORY NOTE

$1,500,000.00

Houston, Texas

September 10, 2010

FOR VALUE RECEIVED, Whitestone REIT Operating Company IV LLC, a Texas limited liability company (" Borrower "), having its principal place of business at 2600 South Gessner, Suite 500, Houston, Texas 77063 promises to pay to the order of MidFirst Bank, a federally chartered savings association (“ Lender ”), at the following address: MidFirst Plaza, P.O. Box 26750, Oklahoma City, Oklahoma 73126, or such other place as the holder hereof may from time to time designate in writing, the principal sum of ONE MILLION FIVE-HUNDRED THOUSAND AND NO/100 DOLLARS ($1,500,000.00) in lawful money of the United States of America, with interest thereon (the “ Loan ”) to be computed from the date of disbursement under this Promissory Note (this “ Note ”) at the Applicable Interest Rate (hereinafter defined), and to be paid in installments as follows:

A payment, on the date of disbursement (the “ Disbursement Date ”), representing interest from the date of disbursement through the last day of the calendar month in which such disbursement is made;

A constant payment of $10,128.11 (based upon an amortization schedule assuming a 360 day year consisting of 12 months of 30 days each) on the first day of November, 2010 and on the first day of each calendar month thereafter up to and including the first day of February, 2014; and

The balance of said principal sum, all unpaid interest thereon and all other amounts owed pursuant to this Note, the Security Instrument (hereinafter defined), the Other Security Documents (hereinafter defined), or otherwise in connection with the loan evidenced by this Note shall be due and payable on the first day of March, 2014 (the “ Maturity Date ”).

All payments to be made by Borrower to Lender shall be deemed received by Lender only upon Lender's actual receipt of same.

1. Applicable Interest Rate . Interest accruing on the principal sum of this Note shall be calculated on the basis of a 360-day year comprised of twelve (12) thirty (30) day months, except that interest due and payable for a period of less than a full month shall be calculated by multiplying the actual number of days elapsed in such period by a daily rate based on said 360 day year, provided that such method of calculation does not cause the effective rate of interest on the loan evidenced hereby to exceed the maximum lawful rate of interest applicable hereto as calculated on the basis of a 365 or 366 day year. The term “ Applicable Interest Rate ” as used in this Note shall mean, from the date of this Note through and including the Maturity Date, a rate of Six and 50/100 percent (6.50%) per annum.

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2. Application . All payments on this Note shall be applied at any time and from time to time in the following order: (i) the payment or reimbursement of any expenses (including but not limited to late charges), costs or obligations (other than the principal hereof and interest hereon) for which Borrower shall be obligated or Lender entitled pursuant to the provisions hereof or of the Security Instrument or the Other Security Documents, (ii) the payment of accrued but unpaid interest thereon, (iii) the payment of unpaid escrow amounts required herein, in the Security Instrument or in the Other Security Documents, if any, and (iv) the payment of all or any portion of the principal balance then outstanding hereunder, in either the direct or inverse order of maturity, at Lender's option. Any payment made by Borrower must be received by Lender in immediately available funds no later than 4:00 p.m. Oklahoma City time in order to receive same day credit; any payment received thereafter shall be considered to have been made on the following business day.

3. Late Charge . If any part of the Debt (hereinafter defined) is not actually received by Lender by close of business on the twentieth (20th) day after the date on which it was due, Borrower shall pay to Lender an amount (the “ Late Charge ”) equal to the lesser of four percent (4%) of such unpaid portion of the missed payment or the maximum amount permitted by applicable law, to defray the expenses incurred by Lender in handling and processing such delinquent payment and to compensate Lender for the loss of the use of such delinquent payment. All such Late Charges shall be automatically due and payable without notice or demand and shall be secured by the Security Instrument and the Other Security Documents. In addition, Borrower shall pay to Lender a charge of $25.00 if a check or preauthorized charge with which Borrower makes a payment on this Note is dishonored or refused by Borrower's payor institution, and Lender may, at its option, thereafter require any sums due under this Note to be paid by wire transfer of federal funds, cashier's check or certified funds. Borrower's payment of a Late Charge or the payment of interest at the default Rate (defined below) shall not excuse late payment or constitute a waiver of any rights of Lender.

4. Security; Defined Terms; Incorporation by Reference . This Note is secured by the Security Instrument and the Other Security Documents. The term “ Security Instrument ” as used in this Note shall mean collectively (i) the Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing-Brookhill Property, (ii) the Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing – Zeta Property, and (iii) the Second Lien Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing – Windsor Park Property executed and delivered by Borrower contemporaneously with this Note and which secures the Debt. The term “ Other Security Documents ” means all documents other than this Note or the Security Instrument now or hereafter executed and/or delivered by Borrower and/or others and to or in favor of Lender, which wholly or partially secure, evidence or guarantee payment of the Debt, provide for any indemnity in favor of or payment to Lender related to the Debt, this Note or the Mortgaged Property (as defined in the Security Instrument), provide for any escrow/holdback arrangements or for any actions to be completed by Borrower subsequent to the date hereof, or are otherwise related to the loan evidenced by this Note. All amounts due and payable under this Note, together with all sums due under the Security Instrument and the Other Security Documents, including any applicable Prepayment Consideration (hereinafter defined) and all applicable attorney fees and costs, are collectively referred to herein as the “ Debt .” The term “business day” or “business days” shall mean those days (other than Saturdays or Sundays) upon which banks are generally open in Texas and Oklahoma for the conduct of substantially all of their commercial lending activities, and wire transfers of funds can be made. Where appropriate, the singular number shall include the plural, the plural shall include the singular, and the words “Lender” and “Borrower” shall include their respective successors, assigns, heirs, personal representatives, executors and administrators.

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5. Optional Prepayment; Prepayment Premium .

(a) Optional prepayments shall not be permitted except as specifically provided in this Section 5, and Lender may refuse to accept any prepayment that does not comply with this Section. Prepayments of principal may be made in full, but not in part (except in the event of casualty loss or condemnation as described below), on any installment payment due date described in paragraph B on the first page of this Note, with advance written notice to Lender not later than 30 days prior to such prepayment stating that Borrower intends to prepay both this Note and the Existing Loan Note (hereinafter defined) in full on the date specified in such notice. Any prepaid amounts specified in such notice shall become due and payable at the time provided in such notice. Such notice shall not suspend or defer the payment of regularly scheduled principal and interest installments as they become due. Any prepayment in full by Borrower, except as described in subparagraph (c) below, shall include a prepayment consideration equal to: (i) two percent (2%) of the unpaid principal balance if prepaid during the first Loan Year, and (ii) one percent (1%) of the unpaid principal balance if prepaid during the remaining term of the Loan (the “ Prepayment Consideration ”). Subject to compliance with the notice provisions provided above, no Prepayment Consideration shall be due for a prepayment in full made within the six (6) month period immediately preceding the Maturity Date. For purposes of the preceding sentences, a “Loan Year” shall mean the period of time beginning October 1 of any given year and continuing through and including the following September 30 (provided that the first Loan Year shall also include the days remaining in September, 2010 as of the Disbursement Date).

Notwithstanding anything to the contrary contained herein, no prepayment shall be permitted hereunder unless and until Borrower simultaneously exercises its right to prepay in full all unpaid principal and interest, including any prepayment consideration, as set forth in the Existing Loan Note.

(b) In the event that Lender accelerates the maturity of this Note at any time during which a Prepayment Consideration applies, and a tender of payment in excess of the minimum amount necessary to reinstate the Loan is made by or on behalf of Borrower in an amount sufficient to satisfy the Debt prior to or at a sheriff's sale, trustee's sale or other foreclosure sale of the Mortgaged Property, or during any redemption period following such sale, such tender shall be considered to constitute a voluntary prepayment and shall require payment of the Prepayment Consideration provided for in this Section 5, and Lender shall not be required to accept such payment if it does not include the Prepayment Consideration required under this Section 5. Alternatively or additionally, Lender may seek injunctive relief in a court of competent jurisdiction to restrain or prohibit a purposeful default by Borrower, in which event Borrower shall pay to Lender legal and other expenses incurred by Lender in connection with such default and Lender's efforts to restrain such default. Lender shall be entitled to include the amount of the Prepayment Consideration in any credit bid at a sheriff's sale, trustee's sale or other foreclosure of the Mortgaged Property. Borrower expressly waives the provisions of any present or future statute or law which prohibits or may prohibit the collection of a prepayment premium, prepayment consideration or charge upon acceleration, and acknowledges and agrees that the foregoing waiver constitutes separate consideration for Lender's agreement to make the loan evidenced hereby, and that Lender would not have made such loan and/or would have charged a higher interest rate without such a waiver.

(c) Notwithstanding the foregoing: (A) no Prepayment Consideration shall be charged on any prepayment caused by Lender's election to apply insurance proceeds or condemnation awards to the Debt under the terms of the Security Instrument; (B) no Prepayment Consideration shall be

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charged on any prepayment made within the six (6) month period immediately preceding the Maturity Date; and (C) in no event shall the Prepayment Consideration exceed an amount equal to the excess, if any, of (i) interest calculated at the highest applicable rate permitted by applicable law, as construed by courts having jurisdiction thereof, on the principal balance of this Note from time to time outstanding from the date of closing of the Loan to the date of such acceleration, over (ii) interest theretofore paid and accrued on this Note. The amount of any prepayment shall never be less than the full amount of the then outstanding principal and interest.

6. Default . An " Event of Default " shall occur if:

(a) Borrower fails to make the full and punctual payment of any amount payable hereunder within twenty (20) days of the due date, or under the Security Instrument or Other Security Documents as and when the same becomes due and payable;

(b) Borrower fails to pay the entire outstanding principal balance hereunder, together with all accrued and unpaid interest, on the date when due, whether on the Maturity Date, upon acceleration or prepayment or otherwise;

(c) an Event of Default (as defined in the Security Instrument or any of the Other Security Documents) has occurred under the Security Instrument and/or Other Security Documents; or

(d) an Other Event of Default under any of the Existing Loan Documents, as such terms are defined in Section 18 hereof.

7. Acceleration . The whole of the Debt, including without limitation, the principal sum of this Note, all accrued interest and all other sums due under this Note, the Security Instrument and the Other Security Documents, together with any applicable Prepayment Consideration, shall become immediately due and payable at the option of Lender, without notice, at any time following the occurrence of an Event of Default.

8. Default Interest . Upon the occurrence of an Event of Default (including without limitation, the failure of Borrower to pay the Debt in full on the Maturity Date), Lender shall be entitled to receive and Borrower shall pay interest on the entire unpaid principal balance at the rate (the " Default Rate ") equal to four percent (4%) above the Applicable Interest Rate. The Default Rate shall be computed from the occurrence of the Event of Default until the actual payment in full of the Debt. This charge shall be added to the Debt, and shall be deemed secured by the Security Instrument. This clause, however, shall not be construed as an agreement or privilege to extend the Maturity Date, nor as a waiver of any other right or remedy accruing to Lender by reason of the occurrence of any Event of Default.

9. Attorney Fees . In the event that Lender employs attorney(s) to collect the Debt, to enforce the provisions of this Note or to protect or foreclose the security herefor, Borrower agrees to pay Lender's attorney fees and disbursements, whether or not suit be brought. Such fees shall be immediately due and payable.

10. Use of Proceeds; Limit of Validity . The proceeds of this Note are to be used for business, commercial, investment or other similar purposes and no portion thereof will be used for personal, family or household use. It is expressly stipulated and agreed to be the intent of Borrower and Lender at all times to comply with the applicable Texas law governing the maximum rate or amount of

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interest payable on this Note or the Debt and by the Other Security Documents (or applicable United States federal law to the extent that it permits Lender to contract for, take, reserve or receive a greater amount of interest than under Texas law) (the “ Maximum Rate ”). If (i) the applicable law is ever judicially interpreted so as to render usurious any amount called for under this Note, the Security Instrument, or under any of the Other Security Documents, or contracted for, charged, taken, reserved or received with respect to the indebtedness evidenced by this Note, the Security Instrument, or the Other Security Documents, or (ii) Lender’s exercise of the option herein contained to accelerate the maturity of this Note or any prepayment by Borrower results in Borrower having paid any interest in excess of that permitted by applicable law, then it is Borrower’s and Lender’s express intent that (a) all excess amounts theretofore collected by Lender be credited on the principal balance of this Note (or, if this Note has been or would thereby be paid in full, refunded to Borrower), and (b) the provisions of this Note, the Security Instrument, and the Other Security Documents immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new document so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder. All sums paid or agreed to be paid to Lender for the use, forbearance and detention of the indebtedness evidenced hereby and by the Security Instrument, and the Other Security Documents shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full term of such indebtedness until payment in full so that the rate or amount of interest on account of such indebtedness does not exceed the usury ceiling from time to time in effect and applicable to such indebtedness for so long as Debt is outstanding. To the extent that Lender is relying on Chapter 303, as amended, of the Texas Finance Code to determine the maximum amount of interest permitted by applicable law on the principal of this Note, Lender will utilize the weekly rate ceiling from time to time in effect as provided in such Chapter 303, as amended. To the extent United States federal law permits a greater amount of interest than is permitted under Texas law, Lender will rely on United States federal law instead of such Chapter 303, as amended, for the purpose of determining the maximum amount permitted by applicable law. Additionally, to the extent permitted by applicable law now or hereafter in effect, Lender may, at its option and from time to time, implement any other method of computing the maximum lawful rate under such Chapter 303, as amended, or under other applicable law by giving notice, if required, to Borrower as provided by applicable law now or hereafter in effect. In no event shall the provisions of Chapter 346 of the Texas Finance Code (which regulates certain revolving credit loan accounts and revolving triparty accounts) apply to the indebtedness evidenced hereby. Notwithstanding anything to the contrary contained herein, or in the Security Instrument, or in any of the Other Security Documents, it is not the intention of Lender to accelerate the maturity of any interest that has not accrued at the time of such acceleration or to collect unearned interest at the time of such acceleration.

11. No Oral Amendments . This Note may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of Borrower or Lender, but only by an agreement in writing signed by the party against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought.

12. Assignment . Lender and its successors, endorsees and assigns may freely transfer and assign this Note. Borrower's right to transfer its rights and obligations with respect to the Debt, and to be released from liability under this Note, shall be governed by the Security Instrument.

13. Applicable Law; Jurisdiction . This Note shall be governed and construed in accordance with the laws of the state in which the real property encumbered by the Security Instrument is located and

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the laws of the United States applicable to transactions in such state. Borrower hereby submits to personal jurisdiction in the state courts located in said state and the federal courts of the United States of America located in said state for the enforcement of Borrower's obligations hereunder and waives any and all personal rights under the law of any other state to object to jurisdiction within such state for the purposes of any action, suit, proceeding or litigation to enforce such obligations of Borrower.

14. Joint and Several Liability . If Borrower consists of more than one person or entity, the obligations and liabilities of each such person or entity shall be joint and several.

15. Waiver of Presentment, Etc . Borrower and all others who may become liable for the payment of all or any part of the Debt do hereby severally waive presentment and demand for payment, notice of dishonor, protest, notice of protest, and notice of intent to accelerate the maturity hereof (and of such acceleration), except to the extent that specific notices are required by this Note, the Security Instrument or the Other Security Documents.

16. No Waiver . Any failure by Lender to insist upon strict performance by Borrower of any of the provisions of this Note, the Security Instrument or the Other Security Documents shall not be deemed to be a waiver of any of the terms or provisions of this Note, the Security Instrument or the Other Security Documents, and Lender shall have the right thereafter to insist upon strict performance by Borrower of any and all of the terms and provisions of this Note, the Security Instrument or the Other Security Documents.

17. Notices . Except as otherwise specified herein, any notice, consent, request or other communication required or permitted to be given hereunder shall be in writing, addressed to the other party as set forth below (or to such other address or person as either party or person entitled to notice may by notice to the other party specify), and shall be: (a) personally delivered; (b) delivered by Federal Express or other comparable overnight delivery service; or (c) transmitted by United States certified mail, return receipt requested with postage prepaid; to:

Lender: MidFirst Bank, a federally chartered savings association

MidFirst Plaza

P.O. Box 26750

Oklahoma City, Oklahoma 73126

Attention: Closing Department

Borrower: Whitestone REIT Operating Company IV LLC

2600 South Gessner, Suite 500,

Houston, Texas 77063

Unless otherwise specified, all notices and other communications shall be deemed to have been duly given on the first to occur of actual receipt of the same or: (i) the date of delivery if personally delivered; (ii) one (1) business day after depositing the same with the delivery service if by overnight delivery service; and (iii) three (3) days following posting if transmitted by mail. Borrower must prominently display Lender's Loan Number (set forth on page 1 of this Note) on all notices or communications to Lender.

18. Cross-Collateralization and Cross-Default .

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On March 1, 2007, Lender made a mortgage loan to HCP REIT Operating Company IV LLC, a Texas limited liability company k/n/a Whitestone REIT Operating Company IV LLC, a Texas limited liability company, the Borrower, (the “ Existing Loan ”) evidenced by (i) a Promissory Note dated March 1, 2007 in the amount of $10,000,000.00 made by Borrower in favor of Lender, and (ii) a Modification of Promissory Note executed by Borrower and Lender and dated contemporaneously herewith (collectively the “ Existing Loan Note ”). The Existing Loan Note is secured in part by (i) the Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing made by Borrower in favor of Lender dated March 1, 2007 and recorded on March 5, 2007 in Book 12731, Page 2009 in the Bexar County, Texas Real Property Records Office, (ii) a Modification of Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing executed by Borrower and Lender and dated contemporaneously herewith to be recorded in the Bexar County, Texas Real Property Records Office, (iii) the Second Lien Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing – Brookhill Property made by Borrower in favor of Lender and dated contemporaneously herewith to be recorded in the Harris County, Texas Real Property Records Office, and (iv) the Second Lien Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing – Zeta Property made by Borrower in favor of Lender and dated contemporaneously herewith to be recorded in the Harris County, Texas Real Property Records Office (collectively the “ Existing Loan Deed of Trust ”).

The Existing Loan Note, Existing Loan Deed of Trust, assignment of leases and rents, guaranties, indemnities and all other loan and security documents, instruments and agreements related to , evidencing or securing the Existing Loan are herein referred to as the “ Existing Loan Documents ”. The debt and obligations of the Borrower under the Existing Loan Documents shall be herein referred to as the “ Other Debt ”. Borrower and Lender intend that the Loan and the Existing Loan be cross-collateralized and cross-defaulted as hereinafter described:

(a) In addition to securing the payment of all sums due under the Note, the Security Instrument and the Other Security Documents specifically related to the Loan also secure the payment of the Other Debt and the performance of the Existing Loan Documents; provided, however, that any owner and holder of all or any part of the Other Debt may not enforce such cross-collateralization unless such owner and holder is the same person or entity which is the owner and holder of the Note, the Security Instrument and the Other Security Documents related to the Loan; and

(b) Any Event of Default under any of the Existing Loan Documents (an " Other Event of Default ") shall also constitute an Event of Default under the Security Instrument and the Note; provided, however, that any Event of Default under the Security Instrument or the Note may not be declared based solely upon the occurrence of any Other Event of Default unless the owner and holder of the Note, the Security Instrument and the Other Security Documents is also the owner and holder of the Existing Loan Documents.

The limits upon the enforceability of the cross-collateralization and cross-default provisions contained in the foregoing paragraphs (a) and (b) shall not be deemed to terminate such cross-collateralization and cross-default provision, which shall continue until Lender, in its sole discretion, and without the necessity of any consent by Borrower, has specifically released or waived the same in writing. Lender shall not be obligated to record a release or satisfaction of the Security Instrument until all of the sums due under the Note and the Other Debt have been paid in full.

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Lender shall be permitted to unilaterally terminate the aforesaid cross-collateralization and cross-default provisions with respect to the Existing Loan and the Mortgaged Property as defined in the Existing Loan Deed of Trust. By its execution of this Note, Borrower hereby consents to and authorizes Lender, without any further consent or authorization by Borrower, to unilaterally execute and file of record with the Harris County, Texas Clerk = s Office and/or the Bexar County Texas Clerk’s Office (or any other applicable recording office) any document effectuating said termination.

19. Severability . If any term, covenant or condition of this Note is held to be invalid, illegal or unenforceable in any respect, this Note shall be construed without such provision.

20. Time of the Essence . Time shall be of the essence in the performance of all obligations of Borrower hereunder.

BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY, OR THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THE LOAN EVIDENCED BY THIS NOTE OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, THE SECURITY INSTRUMENT OR ANY OF THE OTHER SECURITY DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF BORROWER OR LENDER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER'S MAKING OF THE LOAN SECURED BY THE SECURITY INSTRUMENT AND THE OTHER SECURITY DOCUMENTS.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, Borrower has duly executed this Promissory Note to be effective the day and year first above written.

"BORROWER"

Whitestone REIT Operating Company IV LLC,

a Texas limited liability company

By: Whitestone REIT Operating Partnership, L.P.,

a Delaware limited partnership,

its Sole Member/Manager

By: Whitestone REIT,

a Maryland real estate investment trust,

its sole General Partner

By: _______________________________

Name: John J. Dee

Title: Executive Vice President

ACKNOWLEDGMENT

THE STATE OF TEXAS	§
	§
COUNTY OF HARRIS	§

This instrument was acknowledged before me on September 10, 2010, by John J. Dee, as Executive Vice President of Whitestone REIT, a Maryland real estate investment trust, the sole General Partner of Whitestone REIT Operating Partnership, L.P., a Delaware limited partnership, the Sole Member/Manager of Whitestone REIT Operating Company IV LLC, on behalf of said limited liability company.

(SEAL)

______________________________________

Notary Public in and for the State of Texas

My Commission Expires: Print Name of Notary:

______________________ _____________________________________

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Exhibit 10.3

Loan No. 959730

LIMITED GUARANTY

THIS LIMITED GUARANTY (this “ Guaranty ”) is entered into as of September 10, 2010 by the undersigned in favor of MidFirst Bank, a federally chartered savings association (“ Lender ”).

I. RECITALS .

1.1 Loan; Status of Guarantor . Lender will make certain advances (the “ Loan ”) in the principal amount of $1,500,000.00 to or for the benefit of Whitestone REIT Operating Company IV LLC, a Texas limited liability company (“ Borrower ”). Whitestone REIT, a Maryland real estate investment trust and Whitestone REIT Operating Partnership, L.P., a Delaware limited partnership (collectively “ Guarantor ”) are a direct or indirect owner of membership interests in Borrower, and expect to derive substantial benefit from the Loan (defined below). Guarantor has requested that Lender provide the Loan to Borrower, and Lender has agreed to do so, provided that Lender’s agreement to do so is expressly conditioned upon the execution of this Guaranty by Guarantor and is made in reliance upon the warranties and representations made by Guarantor hereunder with respect to Borrower and the Loan. Guarantor warrants to Lender that the Loan will be of value to each of them, and that Lender need not be further concerned with the precise nature of the business benefits and advantages that will accrue to them as a result of the Loan.

1.2 Loan Documents; Indebtedness . Borrower has executed, for the use and benefit of Lender, a Promissory Note (the “ Note ”) and (i) a Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing-Brookhill, (ii) a Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing-Zeta, and (iii) a Second Lien Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing-Windsor Park (collectively the “ Deed of Trust ”), of even date herewith. The Note, the Deed of Trust and all documents other than the Note or the Deed of Trust now or hereafter executed and/or delivered by Borrower and/or others and to or in favor of Lender which wholly or partially secure, evidence or guarantee payment of the Loan, provide for any indemnity in favor of or payment to Lender related to the Loan are hereinafter called the “ Loan Documents ”. All obligations and debts of Borrower to Lender which are (or which at any time in the future are) evidenced or secured by, or described as Borrower’s obligation in, the Loan Documents are hereinafter referred to as the “ Indebtedness ”. The term “Indebtedness” is used herein in its most comprehensive sense and includes any and all debts and obligations described in the preceding sentence, including all present and future principal, interest (including interest accruing after the commencement of any bankruptcy or insolvency proceeding by or against Borrower, whether or not allowed in such proceeding), late charges, prepayment premiums, extension fees, indemnification obligations, taxes, assessments, insurance premiums and other obligations payable under the Deed of Trust, costs and attorneys’ fees, whether now or hereafter made, incurred or created, whether voluntary or involuntary, whether due or not due, whether absolute or contingent, whether liquidated or unliquidated, whether determined or undetermined, and regardless of whether any recourse with respect to any portion of the Indebtedness as against Borrower, any one or more guarantors of any portion of the Indebtedness, any collateral securing the Indebtedness or any letters of credit covering the Indebtedness may be limited, barred, or otherwise become unenforceable for any reason. Capitalized terms defined in the Loan Documents and used in this Guaranty shall, unless otherwise defined in this Guaranty or with reference to another document, have the meanings provided in the Loan Agreement.

1.3 Existing Loan . The term “ Existing Loan ” as used herein shall mean mortgage made by Lender to HCP REIT Operating Company IV LLC, a Texas limited liability company k/n/a Whitestone REIT Operating Company IV LLC, a Texas limited liability company, the Borrower, evidenced by a Promissory Note (the " Existing Loan Note ") dated March 1, 2007 in favor of Lender in the principal amount of Ten Million and No/100 Dollars ($10,000,000.00).

1.4 University of Phoenix Lease Construction . The term “ Construction Conditions ” as used herein shall mean collectively (i) The University of Phoenix, Inc., an Arizona corporation (the “ University of Phoenix ”) is in possession of its demised premises and no default has occurred under the Lease Agreement dated March 12, 2010 by and between Borrower as landlord and University of Phoenix, as tenant (the “ University of Phoenix Lease ”) at the Mortgaged Property (as such term is defined in the Deed of Trust), (ii) all construction and renovation required to be completed under the University of Phoenix Lease at the Mortgaged Property has been completed as evidenced by a final, unconditional Certificate of Occupancy issued by the governing municipal agency, (iii) at the completion of such work, the University of Phoenix has executed a Tenant Estoppel Certificate in form and substance acceptable to Lender, and (iv) no default or Event of Default has occurred under the Loan Documents.

1.5. Deficiency . The term “Deficiency Amount” as used herein shall mean any remaining sum due under the Loan Documents after Lender has executed upon the collateral securing the Loan and the Existing Loan. The Deficiency Amount shall be determined as of the date of the occurrence of a judicial or non-judicial foreclosure sale. If an action is brought in accordance with Sections 51.003, 51.004, and 51.005 of the Texas Property Code (as amended from time to time) with respect to the Deficiency Amount or if Lender shall institute an action for the Deficiency Amount, the following criteria shall be included as the basis of the finder of fact’s determination of the fair market value of the Mortgaged Property:

(I)

The Mortgaged Property shall be valued in an "as is" condition as of the date of the foreclosure sale, without any assumption or expectation that the Mortgaged Property will be repaired or improved in any manner before a resale of the Mortgaged Property after foreclosure;

(II)

The valuation shall be based upon an assumption that the foreclosure purchaser desires a prompt resale of the Mortgaged Property following the foreclosure sale with the entire purchase price paid at closing;

(III)

All reasonable closing costs customarily borne by the seller in a commercial real estate transaction should be deducted from the gross fair market value of the Mortgaged Property; and

(IV)

Any expert opinion testimony given or considered in connection with a determination of the fair market value of the Mortgaged Property must be given by persons having at least five (5) years experience in appraising property (which appraiser shall also be an MAI) similar to the Mortgaged Property and who have conducted and prepared a complete written appraisal of the Mortgaged Property taking into consideration the factors set forth above.”

II. GUARANTY .

2.1 GUARANTY OBLIGATION . UNTIL THE SATISFACTION OF ALL OF THE CONSTRUCTION CONDITIONS, AS DETERMINED BY LENDER IN ITS SOLE

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DISCRETION (THE “ CONSTRUCTION SATISFACTION ”), GUARANTOR JOINTLY AND SEVERALLY GUARANTIES AND PROMISES TO PAY THE INDEBTEDNESS TO LENDER OR ITS ORDER. UPON THE CONSTRUCTION SATISFACTION, GUARANTOR JOINTLY AND SEVERALLY GUARANTIES AND PROMISES TO PAY THE INDEBTEDNESS TO LENDER OR ITS ORDER SUBJECT TO THE LIMITATIONS DESCRIBED IN PARAGRAPH 2.2 BELOW. THE OBLIGATIONS OF GUARANTOR HEREUNDER SHALL BE CONTINUING, ABSOLUTE AND UNCONDITIONAL. GUARANTORS UNDERSTAND THAT, UNDER CERTAIN CIRCUMSTANCES DESCRIBED IN PARAGRAPH 2.2(a)(ii) , THIS GUARANTY WILL EXTEND TO THE ENTIRE INDEBTEDNESS. THE FOREGOING GUARANTY IS A GUARANTY OF PAYMENT OF THE INDEBTEDNESS AND NOT OF COLLECTION, AND IS NOT CONDITIONED OR CONTINGENT UPON THE GENUINENESS, VALIDITY, REGULARITY OR ENFORCEABILITY OF ANY OF THE LOAN DOCUMENTS. NO PAYMENT MADE BY OR ON BEHALF OF ANY GUARANTOR TO LENDER SHALL DISCHARGE OR DIMINISH SUCH GUARANTOR’S LIABILITY HEREUNDER UNLESS WRITTEN NOTICE IS GIVEN TO LENDER AT THE TIME SUCH PAYMENT IS MADE THAT THE SAME IS BEING PAID UNDER THIS GUARANTY, AND ANY SUCH PAYMENTS MADE SHALL BE SUBJECT TO THE PROVISIONS OF PARAGRAPH 2.2(d) . GUARANTOR ACKNOWLEDGES THAT ITS LIABILITIES UNDER THIS GUARANTY ARE IN ADDITION TO AND EXCLUSIVE OF THE LIABILITIES OF GUARANTOR TO LENDER UNDER THAT INDEMNITY AGREEMENT OF APPROXIMATELY EVEN DATE HEREWITH FROM BORROWER AND GUARANTOR TO LENDER. GUARANTOR ACKNOWLEDGES THAT ITS AGGREGATE LIABILITY TO LENDER UNDER THIS GUARANTY MAY EXCEED THE LIABILITY OF BORROWER TO LENDER UNDER THE NOTE, AND HEREBY EXPRESSLY WAIVES THE BENEFIT OF ANY STATUTE, COMMON LAW OR OTHER RIGHT THAT MIGHT OTHERWISE LIMIT THE AMOUNT OF GUARANTOR’S LIABILITY TO THE AMOUNT OF BORROWER’S LIABILITY.

2.2 Limitations upon Guarantor’s Personal Liability .

(a) Guarantor’s personal liability under this Guaranty shall extend to and include:

(i)

Prior to the occurrence of a Full Recourse Event (hereinafter defined), only (A) the Carve-Out Liabilities (defined below) plus (B) all costs and expenses, including reasonable attorneys’ fees incurred by Lender in connection with the collection and/or the enforcement of this Guaranty, including any fees and costs incurred in any trial, appeal and/or bankruptcy proceeding; and

(ii)

Following the occurrence of any Full Recourse Event, the entire Indebtedness, including, without duplication, 100% of all principal, interest and other amounts payable by Borrower under the Loan Documents, plus all amounts described in clause (B) of subparagraph (i) above.

(b) As used in this Guaranty:

(i)

“ Full Recourse Event ” means that Borrower or Guarantor files a voluntary petition or otherwise initiates proceedings to have Borrower or Guarantor adjudicated bankrupt or insolvent, or consents to the institution of bankruptcy or insolvency proceedings against Borrower or Guarantor, or files a petition seeking or consenting to reorganization or relief of Borrower or Guarantor as debtor under any applicable federal or state law relating to bankruptcy, insolvency, or other relief for debtors with respect to Borrower or Guarantor; or

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seeks or consents to the appointment of any trustee, receiver, conservator, assignee, sequestrator, custodian, liquidator (or other similar official) of Borrower or Guarantor, or of all or any substantial part of the properties and assets of Borrower or Guarantor, or admits in writing the inability of Borrower or Guarantor to pay its debts generally as they become due, or declares or effects a moratorium on Borrower’s or Guarantor’s debts, or takes any action in furtherance of any such action, or an involuntary petition is filed against Borrower or Guarantor and is not adjudicated in a final judgment determining that the petitioner(s) are not entitled to involuntary relief within sixty (60) days of the filing of the involuntary petition; provided, however, that the foregoing event shall not constitute a Full Recourse Event if Lender is one of the creditors filing an involuntary petition

(ii) “ Carve-Out Liabilities ” means all damages and/or losses incurred or suffered by Lender, including, but not limited to, attorneys’ fees and costs, resulting directly or indirectly from any one or more of the following: (A) misapplication or misappropriation of rents, security deposits, or other income, issues, profits and revenues derived from the Property after the occurrence of an Event of Default, provided that any prepaid rent as of the date the Event of Default occurs shall be considered to have been collected after the Event of Default; (B) fraud or material misrepresentation of Borrower or any Guarantor; (C) misapplication or misappropriation of any insurance proceeds by reason of damage, loss or destruction to any portion of the Property or the improvements thereon to the full extent of such misapplied or misappropriated proceeds, or the misapplication or misappropriation of proceeds or awards resulting from the condemnation or taking in lieu of condemnation of any portion of the Property, to the full extent of such misapplied or misappropriated proceeds or awards; (D) waste of the Property or any portion thereof, and all costs, including reasonable attorneys’ fees, incurred by Lender to protect the Property or any other security for indebtedness owing by Borrower to Lender, to the full extent of the loss incurred by Lender as a result thereof; (E) any taxes, assessments or insurance premiums, to the extent not covered by amounts paid into escrow by Borrower to Lender, for which Borrower is liable under the Note, the Deed of Trust or any other Loan Document, which are paid by Lender; (F) loss arising under the Indemnity Agreement, or Borrower’s breach of the hazardous substances covenants, warranties or representation provisions contained in the Deed of Trust or other Loan Documents except for loss caused by Lender after Lender takes title to the Property (liabilities described in this clause (F) are called “ Environmental Carve-Out Liabilities ”); (G) loss by fire or casualty to the extent not compensated by insurance proceeds collected by Lender; (H) without in any way limiting Guarantors’ liability hereunder for a Full Recourse Event, loss arising from Borrower’s filing for any relief under any applicable state receivership laws, under the Federal Bankruptcy Code or under any other debtor relief laws, including but not limited to the extent to which the amount of Borrower’s indebtedness owing to Lender under the Note, the Deed of Trust and the other Loan Documents exceeds the value of the collateral securing the Loan, as determined in appropriate legal proceedings, it being understood and agreed that Lender will be entitled (without prejudice to any of Lender’s rights or remedies against any Guarantor) to file a claim as an unsecured creditor to such extent; and (I) all costs and fees, including without limitation, reasonable attorneys’ fees incurred by Lender in the enforcement of subparagraphs (A) through (H) above.

(c) The limitation of any Guarantor’s liability set forth in this paragraph 2.2 shall not prejudice or impair Lender’s rights to (i) name Borrower or any one or more Guarantor as parties defendant in any action, proceeding or arbitration, subject to the limitations of this paragraph 2.2 ; (ii) assert any unpaid amounts of the Indebtedness (whether or not guaranteed) as a defense or offset to or against any claim or cause of action made or alleged against Lender by Borrower, any of its principals, or Guarantor or indemnitor in connection with the Indebtedness; (iii) exercise self help remedies, such as

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set-off, or conduct a trustee’s sale or foreclosure against or sale of any collateral; (iv) collect or recover rents, insurance proceeds, condemnation or other awards, or any damages or awards arising out of any damage to, or decrease in the value of, any portion of the Property; or (v) enforce Borrower’s obligations under the Loan Documents which relate to preserving the condition of the Property or the priority of the Deed of Trust, including obligations to pay all taxes and charges that may affect or become a lien on the Property, to maintain the Property and all insurance in accordance with the Loan Documents and to repay all sums advanced by Lender for any such purpose.

(d) For the purpose of determining Guarantor’s liability under this Guaranty during any time in which recourse to Guarantor may be limited, all payments made by Borrower to Lender with respect to the Indebtedness and all amounts received or deemed to have been received by Lender pursuant to foreclosure or some other enforcement activity taken under the Loan Documents or applicable law (including any fair market value credit or bid price credit given to Borrower upon a judicial or non-judicial foreclosure against the Property), shall first be applied to the portion of the Indebtedness for which Guarantor is not personally liable, so that such Guarantor’s personal liability remains in full force and effect so long as any portion of the Indebtedness remains unpaid. Guarantor’s obligations under this Guaranty shall survive any judicial or non-judicial foreclosure proceeding, any delivery of a deed in lieu of foreclosure, or any release of the Deed of Trust; in addition, Guarantor’s obligations for the Environmental Carve-Out Liabilities shall survive any repayment or discharge of the Indebtedness.

(e) Notwithstanding anything to the contrary contained herein, upon the Construction Satisfaction, Guarantor shall at all times remain liable to Lender for any Deficiency Amount.

III. GENERAL PROVISIONS .

3.1 Waivers . Subject to Lender’s requirement to execute upon the collateral securing the Loan and the Existing Loan in order to determine the Deficiency Amount in accordance with Section 1.5, Guarantor waives and agrees not to assert or take advantage of: (a) the provisions of any statutory or common laws or procedural rules of any jurisdiction relevant to guarantors, indemnitors, sureties, co-makers or accommodation parties; (b) any right to require Lender to proceed against Borrower or any other person or entity, to proceed against or exhaust any security held by Lender at any time for the Indebtedness or to pursue any other remedy in Lender’s power before proceeding against Guarantor; (c) any defense of any statute of limitations which may be asserted by Borrower; (d) any defense that may arise by reason of the incapacity, lack of authority, death, disability, dissolution or termination of, involvement in any bankruptcy or reorganization proceeding by, or other similar occurrence or happening with respect to, Borrower or any successor in interest to Borrower with respect to any present or future collateral for the Indebtedness (including any order, ruling or plan of reorganization in connection with any bankruptcy proceeding, whether or not consented to by Lender or any election to have Lender’s claim allowed as being secured, partially secured or unsecured); (e) any “one action” or “anti-deficiency” law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, before or after Lender’s commencement or completion of any foreclosure action, either judicially or by exercise of a power of sale; (f) any election of remedies by Lender which destroys or otherwise adversely affects Guarantor’s subrogation rights or Guarantor’s rights to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may suffer by reason of any law limiting, qualifying, or discharging the Indebtedness; (g) any right to receive any demand or any notice, including any notice of any Event of Default; or (h) any other circumstance, except for payment in full of the Indebtedness, whether or not referred to in this Guaranty, which might otherwise constitute a legal or equitable discharge of a surety or a guarantor.

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3.2 Authority to Take Actions Without Consent of Guarantor . Guarantor authorizes Lender, without notice to, consent from or demand upon, and without affecting the liability of, such Guarantor hereunder, but with any necessary consent or joinder of Borrower, from time to time, to: (a) renew, compromise, extend, accelerate or otherwise change the time for payment of, or otherwise change the terms of, the Indebtedness or any part thereof, including increase or decrease of any applicable rate of interest with respect thereto; (b) take and hold, release or waive any security (including the Deed of Trust) for the Indebtedness; (c) release or substitute any person or entity that is or may be directly or indirectly liable (or whose property is directly or indirectly liable) for satisfaction of all or any portion of the Indebtedness; (d) foreclose or otherwise realize upon any security for all or any portion of the Indebtedness, regardless of the effect upon such Guarantor’s subrogation, contribution or reimbursement rights against Borrower or any other guarantor or pledgor; (e) accept or make compositions or other arrangements, or file or refrain from filing a claim in any bankruptcy proceeding involving Borrower or any other guarantor or pledgor; and/or (f) otherwise deal with Borrower or any other guarantor or party relating to the Indebtedness or any security therefor as Lender may determine in its discretion.

3.3 Guarantor’s Duty to Keep Informed . Guarantor confirms to Lender that it is and will remain fully conversant with the Loan, the financial status and situation of Borrower, any collateral securing the Indebtedness and its value, and any other guarantors of the Indebtedness or any portion thereof, and agrees that Lender has no duty to disclose to Guarantor any facts or information Lender may now have or may hereafter obtain about or with respect to the Loan, Borrower, any collateral for the Indebtedness or any other guarantors of the Indebtedness or any portion thereof.

3.4 Independent Obligation . The obligations of Guarantor hereunder shall be continuing, absolute and unconditional. The obligations of Guarantor hereunder are independent of the obligations of Borrower, and a separate action or actions may be brought and prosecuted against Guarantor, whether or not any action is brought (or nonjudicial action taken) simultaneously with, before or after any action against Borrower or against any other guarantors of the Indebtedness or any portion thereof. Subject to Lender’s requirement to execute upon the collateral securing the Loan and the Existing Loan in order to determine the Deficiency Amount in accordance with Section 1.5, Lender shall have no obligation to proceed against any collateral (including the Security Documents) securing all or any portion of the Indebtedness, and shall have no obligation to enforce any right or remedy set forth or described in any of the Loan Documents.

3.5 No Right of Subrogation, Reimbursement or Contribution . Notwithstanding the provisions of any statutory or common law or procedural rule to the contrary: (a) Guarantor shall have no right of subrogation or reimbursement with respect to any of the Indebtedness, any security for any portion of the Indebtedness or any remedy of Lender to collect any of the Indebtedness, regardless of any payment directly or indirectly made by Guarantor pursuant to the provisions of this Guaranty or otherwise; and (b) Guarantor shall have no right of contribution against any other guarantor or pledgor. To the extent that the foregoing waiver of subrogation, reimbursement or contribution rights is determined by a court of competent jurisdiction to be void or voidable for any reason, Guarantor agrees that its rights of subrogation and reimbursement against Borrower and against any collateral or security will be junior and subordinate to Lender’s rights against Borrower and to Lender’s right, title and interest in such collateral or security, and Guarantor’s right of contribution against any other guarantor or pledgor shall be junior and subordinate to Lender’s rights against such other guarantor or pledgor. Guarantor acknowledges that Lender does not and shall not make any representation or warranty of any nature as to the existence, value, priority or non-impairment of any such rights or any such security, and waives any and all claims of any nature that it may now have or hereafter acquire against Lender that may result from the nonexistence, lack or loss of value or priority or impairment of any such rights or security.

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3.6 Subordination of Obligations to Guarantor . All existing and future obligations of Borrower to Guarantor are hereby subordinated and made junior and inferior to all rights of Lender to have the Indebtedness fully paid and satisfied. Guarantor hereby assigns and grants to Lender a security interest in all such obligations of Borrower to Guarantor and any security therefor to secure its obligations under this Guaranty.

3.7 Continuation of Guaranty if Payments Avoided or Recovered from Lender . Notwithstanding any other provision of this Guaranty or the Loan Documents to the contrary, if all or any portion of the Indebtedness is paid or performed, the obligations of Guarantor hereunder shall continue and remain in full force and effect if all or any part of such payment or performance is avoided or recovered directly or indirectly from Lender as a preference, fraudulent transfer or otherwise, regardless of whether the Indebtedness had theretofore been paid in full or whether Guarantor had provided notice of revocation of this Guaranty to Lender prior to such avoidance or recovery.

3.8 Amount of Indebtedness; Effect on Guaranty . Guarantor acknowledges and agrees that the Indebtedness (and/or other indebtedness or obligations of Borrower) to Lender may exceed the principal amount set forth in the first sentence of paragraph 1.1 . No increase in the Indebtedness in excess of such amount, and no other loans or financial accommodations by Lender to Borrower or to Guarantor shall in any way affect the obligations of Guarantor under this Guaranty.

3.9 Lien and Setoff Rights Against Deposits . To secure Guarantor’s obligations under this Guaranty, Lender shall have a lien upon and a right of setoff against all deposits made by Guarantor with Lender.

3.10 No Effect on Other Obligations; Rights and Remedies Cumulative . Nothing in this Guaranty shall in any way affect any other present or future direct or indirect obligations of Guarantor or Borrower to Lender. By way of expansion and not limitation of the provisions of the preceding sentence, all rights and remedies of Lender and all obligations of Borrower under the Loan Documents, and all obligations of Guarantor hereunder, shall be cumulative, and Lender may resort to any rights and remedies under this Guaranty and/or any one or more of the Loan Documents, in such order as Lender shall in its sole discretion elect, without impairing Lender’s rights and remedies under this Guaranty, provided that Lender shall have no duty or obligation to take any such actions or resort to any such rights or remedies. Guarantor acknowledges that Lender’s exercise of certain rights or remedies may impair or eliminate Guarantor’s right of subrogation or recovery against Borrower, and that Guarantor may incur a partially or totally non-reimbursable liability under this Guaranty.

3.11 Guaranty Irrevocable . This Guaranty is irrevocable.

IV. MISCELLANEOUS .

4.1 Representations and Warranties . Guarantor warrants and represents to and agrees with Lender that the recitals described in Part I hereof are true and correct, and that it: (a) has reviewed and approved the Loan Documents, and hereby makes and reaffirms to Lender each of the representations, warranties, acknowledgments, agreements and waivers purported to be made by Guarantor in the Loan Documents, as if each were separately stated in this Guaranty; (b) acknowledges that any of the Loan Documents may be amended without his/her/its knowledge or consent, but with any required consent of Borrower; (c) waives any notice of acceptance of this Guaranty; (d) acknowledges that the Indebtedness will be created in consideration of and in reliance upon this Guaranty, and agrees that this Guaranty shall be binding against Guarantor’s sole and separate property and the property now or hereafter owned by the marital community of Guarantor who is a natural person; (e) acknowledges that all

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financial statements and other statements or reports previously or hereafter given to Lender by or on behalf of Guarantor are and shall be substantially true and correct in all material respects as of the date thereof, and no material adverse change in the business, properties or financial condition of Guarantor has occurred since the date of the most recent financial statements given to Lender; (f) is not the subject of a voluntary or involuntary petition in bankruptcy, an assignment for the benefit of creditors, a petition seeking the appointment of a receiver, a petition seeking liquidation, reorganization or an arrangement under the bankruptcy or insolvency laws of the United States or any state, or any other action brought under similar laws; and (g) is not and will not be, as a consequence of the execution and delivery of this Guaranty, impaired or rendered “insolvent,” as that term is defined in Section 101 of the federal Bankruptcy Code, or otherwise rendered unable to pay its debts as the same mature and will not have thereby undertaken liabilities in excess of the present fair value of its assets.

4.2 Assignments and Loan Participations . This Guaranty shall inure to the benefit of Lender, its successors and assigns, and all lenders owning participating interests with respect to all or any portion of the Loan. Whether or not this Guaranty is separately or formally assigned, it shall automatically inure to the benefit of and be enforceable by any holder of all or any portion of the Loan. Guarantor waives notice of any transfer or assignment of the Loan or any part thereof, and acknowledges that Lender may sell the Loan or interests therein to one or more assignees or participants, in which case Lender may provide to any prospective assignee or participant any information or documentation that Lender may have regarding Guarantor.

4.3 Effectiveness of Waiver, Amendment or Release . No waiver of any provision of this Guaranty by Lender, no amendment of this Guaranty, and no release of Guarantor shall be effective unless it is in writing and signed by an authorized officer of Lender.

4.4 Costs of Enforcement . If suit or other judicial proceeding is brought, or any other action is taken, by Lender to enforce its rights under this Guaranty, Guarantor jointly and severally promises to pay Lender’s reasonable attorneys’ fees and court costs incurred therein, which fees and costs shall be determined in the sole discretion of the judge or arbitrator in such action, together with interest thereon at the Default Rate described in the Note, until paid.

4.5 Governing Law, Jurisdiction and Venue . This Guaranty is delivered to Lender in, relates to real property located in, and shall be governed by and construed in accordance with the laws and judicial decisions of the State of Texas and applicable federal laws, rules and regulations. Guarantor expressly acknowledges and agrees that any judicial action or arbitration to enforce any right of Lender under this Guaranty may be brought and maintained in the venue(s) described in paragraph 16 of the Note, and submits to the process, jurisdiction and venue of any such court. Guarantor waives, and agrees not to assert, any claim that it is not personally subject to the jurisdiction of the foregoing courts or that any action, arbitration or other proceeding brought in compliance with this paragraph is brought in an inconvenient forum. Guarantor also waives the right to protest the domestication or collection of any judgment obtained against Guarantor with respect to this Guaranty in any jurisdiction where Guarantor may now or hereafter maintain assets.

4.6 Successors and Assigns . This Guaranty, and every part hereof, shall be binding upon Guarantor and its successors and assigns, including the estate of, or any revocable trust created or established by, any Guarantor who is a natural person. Guarantor’s liability hereunder shall be unaffected by changes in the name of Borrower or in its constituent principals.

4.7 Construction of Guaranty . This Guaranty shall apply to the parties hereto according to the context hereof, without regard to the number or gender of words or expressions used herein. The

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headings or captions of Articles and paragraphs in this Guaranty are for convenience and reference only, and in no way define, limit or describe the scope or intent of this Guaranty or the provisions of such Articles and paragraphs. Article, paragraph and subparagraph references are to this Guaranty, unless otherwise specified. This Guaranty shall be construed as a whole, in accordance with the fair meaning of its language, and, as each party has been represented by legal counsel of its choice in the negotiation of this Guaranty or deliberately chosen not to be so represented, neither this Guaranty nor any provision thereof shall be construed for or against either party by reason of the identity of the party drafting this Guaranty. Reference to any agreement (including this Guaranty and any Loan Document) means such agreement as amended, modified, replaced, superseded or restated. As used in this Guaranty, the term(s): (a) “include(s)” or “including” shall mean without limitation by reason of enumeration; (b) “herein,” “hereunder,” “hereof,” “hereinafter” or similar terms refer to this Guaranty as a whole rather than to any particular paragraph; and (c) “person” includes a corporation, trust, partnership, limited liability company, association, governmental body or other entity, as well as a natural person. Technical words and phrases and those that have acquired particular meanings in the commercial mortgage lending and real estate industries shall be construed according to those particular meanings when the context in which they are used in this Guaranty reasonably indicates that the technical meaning is intended. Any document incorporated herein by reference shall be made a part hereof for all purposes, and references in this Guaranty to such document shall be deemed to include such reference and incorporation.

4.8 Financial Information . Guarantor shall timely deliver to Lender the financial information relating to Guarantor described in paragraph 14 of the Mortgage. All financial statements previously delivered to Lender by or on behalf of Guarantor were true and correct as of the respective dates thereof.

4.9 Notices . All notices or demands that are required or permitted to be given or served hereunder shall be given in the manner provided in the Loan Agreement. Guarantor acknowledges that its address for notice shall be the address set forth on the following page. Guarantor may change its address from time to time by giving ten (10) days’ prior written notice to Lender.

4.10 Mutual Waiver of Right to Jury Trial . AS A MATERIAL PART OF THE CONSIDERATION FOR THE MAKING OF THE LOAN, GUARANTOR (AND LENDER, BY ACCEPTING THIS GUARANTY) HEREBY UNCONDITIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY PRESENT OR FUTURE CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THE LOAN, ANY LOAN DOCUMENT, THIS GUARANTY, OR ANY OTHER DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION WITH THE LOAN, OR IN ANY WAY CONNECTED WITH OR RELATED TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THE LOAN OR ANY DOCUMENTS EXECUTED IN CONNECTION THEREWITH. IF ANY DISPUTE IN CONNECTION WITH THE LOAN, THIS GUARANTY OR THE LOAN DOCUMENTS IS DECIDED BY LITIGATION AS PERMITTED BY THE LOAN DOCUMENTS, SUCH DISPUTE SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY .

4.11 Counterparts . This Guaranty may be executed and/or acknowledged in one or more counterparts, each of which may be executed and/or acknowledged by one or more of the signatory parties hereto. Signature and acknowledgment pages may be detached from the counterparts and attached to a single copy of this Guaranty to form one legally effective document.

4.12 Release . Guarantor, for itself and for its agents, employees, representatives, officers, directors, general partners, limited partners, joint shareholders, beneficiaries, trustees, administrators,

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subsidiaries, affiliates, employees, servants and attorneys (collectively, the " Guarantor Releasing Parties ") jointly and severally release and forever discharge Lender, and its respective successors, assigns, partners, directors, officers, employees, agents, attorneys, administrators, trustees, subsidiaries, affiliates, beneficiaries, shareholders and representatives from all liabilities, obligations, costs, expenses, claims and damages, at law or in equity, known or unknown, which any of the Guarantor Releasing Parties may now or hereafter hold or claim to hold under common law or statutory right, arising in any manner out of the Mortgaged Property, the Loan, any of the Loan Documents or any of the documents, instruments or any other transactions relating thereto or the transactions contemplated thereby. Without limiting the generality of the foregoing, this release shall include the following matters: (a) all aspects of the Loan Documents, any negotiations, demands or requests with respect thereto, (b) Lender’s exercise or attempts to exercise any of its rights under any of the Loan Documents, at law or in equity, and (c) any acts or omissions of Lender or any party securing the Loan or any employee or agent thereof occurring on or before the date of the Loan Documents. The Guarantor Releasing Parties agree that this release is a full, final and complete release and that it may be pleaded as an absolute bar to any or all suit or suits pending or which may thereafter be filed or prosecuted by any of the Guarantor Releasing Parties, or anyone claiming by, through or under any of the Guarantor Releasing Parties. The Guarantor Releasing Parties agree that this release is binding upon each of them and their respective agents, employees, representatives, officers, directors, general partners, limited partners, joint shareholders, beneficiaries, trustees, administrators, subsidiaries, affiliates, employees, servants and attorneys.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, this Guaranty is executed as of September 10, 2010.

GUARANTORS

Address : Whitestone REIT,

a Maryland real estate investment trust

2600 South Gessner, Suite 500

Houston, TX 77063 By: _______________________________

Name: John J. Dee

Title: Executive Vice President

Whitestone REIT Operating Partnership, L.P.,

a Delaware limited partnership,

Address : By: Whitestone REIT,

a Maryland real estate investment trust,

2600 South Gessner, Suite 500 its sole General Partner

Houston, TX 77063

By: _______________________________

Name: John J. Dee

Title: Executive Vice President

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ACKNOWLEDGEMENTS

THE STATE OF TEXAS	§
	§
COUNTY OF HARRIS	§

This instrument was acknowledged before me on September 10, 2010, by John J. Dee, as Executive Vice President of Whitestone REIT, a Maryland real estate investment trust, on behalf of said real estate investment trust.

(SEAL)

______________________________________

Notary Public in and for the State of Texas

My Commission Expires: Print Name of Notary:

______________________ ____________________________________

THE STATE OF TEXAS	§
	§
COUNTY OF HARRIS	§

This instrument was acknowledged before me on September __, 2010, by John J. Dee, as Executive Vice President of Whitestone REIT, a Maryland real estate investment trust, the sole General Partner of Whitestone REIT Operating Partnership, L.P., on behalf of said limited partnership.

(SEAL)

______________________________________

Notary Public in and for the State of Texas

My Commission Expires: Print Name of Notary:

______________________ _____________________________________

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Maryland		000-50256		76-0594970
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
	[ ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

	2600 South Gessner, Suite 500, Houston, Texas		77063
	(Address of principal executive offices)		(Zip Code)

		Whitestone REIT (Registrant)
September 16, 2010 (Date)		By: /s/ DAVID K. HOLEMAN Name: David K. Holeman Title: Chief Financial Officer