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.

 
 

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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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