Document:

ex10-8.htm

     

    
      

    

    Exhibit
10.8

     

    AGREEMENT
OF PURCHASE AND SALE

     

              THIS
AGREEMENT (“Agreement”)
is made as of the 18th day of
December, 2008 (the “Effective
Date”), between Bank One, Chicago, NA, as successor by merger with Bank
One, Wilmette, f/k/a, First Illinois Bank of Wilmette, as Trustee under Trust
Agreement dated January 29, 1986 and known as Trust Number TWB-0454 (the “Seller”)
and Whitestone REIT Operating Partnership, L.P., a Delaware limited partnership,
or its designee (the “Purchaser”).

     

              WHEREAS,
Seller has agreed to sell and Purchaser has agreed to purchase the Property (as
hereinafter defined);

     

              NOW,
THEREFORE, in consideration of the agreements contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

     

              1.
Property.
Seller hereby agrees to sell and Purchaser, or his designee, hereby agrees to
purchase from Seller certain real property in the City of Buffalo Grove, Lake
County, Illinois, municipally known as Spoerlein Commons, 1151 McHenry Road,
Buffalo Grove, Illinois 60084, generally comprising approximately 3.6595 acres
of land and more particularly described on Exhibit
A hereto and hereby incorporated by reference herein, together with an
approximately 50,000 square foot retail/office building and
all other improvements located thereon and all rights, easements, hereditaments
and appurtenances thereto belonging, together with all telephone numbers for the
Property and all tangible and intangible personal property of Seller located on
and used in connection with the operation of the Property (collectively, the
“Property”).

     

              2.
Earnest
Money. Within three (3) business days after the Effective Date, Purchaser
shall deposit with Chicago Title Insurance Company (the “Escrow
Agent”) Fifty Thousand and 00/100 Dollars ($50,000.00) in cash or
certified or cashier’s check as earnest money (the “Earnest
Money”). Said Earnest Money shall be refundable to Purchaser in
accordance with Section
4 hereof. The parties hereto covenant and agree that in performing any of
its duties under this Agreement, Escrow Agent shall not be liable for any loss,
costs or damage which it may incur in the capacity of Escrow Agent, except for
any loss, costs or damage arising out if its default or gross
negligence.

     

              Purchaser
and Seller shall indemnify the Escrow Agent and hold the Escrow Agent harmless
from all damage, costs, claims and expenses arising from performance of its
duties as Escrow Agent including reasonable attorney’s fees, except for those
damages, costs, claims and expenses resulting from the gross negligence of
willful misconduct of the Escrow Agent.

     

              Accordingly,
Escrow Agent shall not incur any liability with respect to (i) any action taken
or omitted to be taken in good faith upon advice of counsel given with respect
to any questions relating to duties and responsibilities, or (ii) to any action
taken or omitted to be taken in reliance upon any documents, including any
written notice of instruction provided for in this Agreement, not only as to its
execution and the validity and effectiveness of its provisions, but also to the
truth and accuracy of any information contained therein, which Escrow Agent
shall in good faith believe to be genuine, to be signed or presented by a proper
person or persons and to conform with the provisions of this Agreement. The
Seller and/or Purchaser are aware the Federal Deposit Insurance Corporation
(FDIC) coverages apply to a maximum amount of $250,000.00 per depositor (as may
be modified by the FDIC from time to time). Further, the Seller and/or Purchaser
do not and will not hold Escrow Agent liable for any loss occurring which arises
from bank failure or error, insolvency or suspension, or a situation or event
which falls under the FDIC coverages.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

              In
the event any party to the transaction underlying this Agreement shall tender
any performance after the time when such performance was due, Escrow Agent may
proceed under this Agreement unless one of the parties to this Agreement shall
give to the Escrow Agent written direction to stop further performance of the
Escrow Agent’s functions hereunder. In the event written notice of default or
dispute is given to the Escrow Agent by any party, or if Escrow Agent receives
contrary written instructions from any party, then Escrow Agent will promptly
notify all other parties of such notice. Thereafter, Escrow Agent will decline
to disburse funds or to deliver any instrument or otherwise continue to perform
its escrow functions, except upon receipt of a mutual written agreement of the
parties or upon an appropriate order of court. In the event of a dispute, the
Escrow Agent is authorized to deposit the escrow into a court of competent
jurisdiction for a determination as to the proper disposition of said funds. In
the event that the funds are deposited in court, the Escrow Agent shall be
entitled to file a claim in the proceeding for its costs and counsel fees, if
any.

     

              3.
Purchase
Price. The purchase price (the “Purchase
Price”) of the Property shall be an amount equal to Nine Million Four
Hundred One Thousand and 00/100 Dollars ($9,401,000.00). At the Closing, all
Earnest Money shall be applied to the Purchase Price, and the balance of the
Purchase Price shall be paid in part in cash and in part in Units of limited
partnership of Purchaser (“Units”) or shares of stock in Purchaser’s general
partner, Whitestone REIT, a Maryland real estate investment trust (“Shares”) as
follows: (i) Five Million Four Hundred Fifty Thousand and 00/100 Dollars
($5,450,000.00) in cash at Closing by wire transfer of immediately available
funds and (ii) the balance of the Purchase Price, subject to the adjustments and
prorations required by this Agreement, (“Unit Dollar Value”) by Purchaser’s
delivery to Seller of that number of Units or Shares (to be determined by
Seller) obtained by dividing the Unit Dollar Value by $5.15. In any event, the
Units shall be freely convertible to Shares at any time after July 1, 2009,
pursuant to the Purchaser’s limited partnership agreement, as may be amended
from time to time.

     

              4.
Inspection
Period; Refund of Earnest Money; Due Diligence Materials. Purchaser shall
have until December 22, 2008 (“Inspection
Period”) to make such determinations with respect to the Property as
Purchaser deems appropriate and to elect to either continue or terminate this
Agreement. Purchaser may terminate this Agreement, and receive a full refund of
the Earnest Money, less $10.00 to be retained by Seller as consideration for
entering into this Agreement, by delivering written termination notice to Seller
at any time prior to expiration of the Inspection Period. In the event of such
termination, Purchaser agrees to reimburse Seller the cost of obtaining the
Survey. If Purchaser does not so terminate this Agreement, the Earnest Money
shall thereafter be nonrefundable (except as expressly otherwise set forth in
this Agreement) and this Agreement shall remain in effect.

     

    
      
         

      

      
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              Within
five (5) days
after the Effective Date, Seller shall deliver to Purchaser at Seller’s sole
expense the information more particularly described on Schedule
4 hereto (the “Due
Diligence Materials”). For each day of Seller’s delay in delivering all
of the Due Diligence Materials beyond five (5) days
after the Effective Date, the Inspection Period and Closing Date shall (at
Purchaser’s option) be extended by one (1) day.

     

              5.
Costs
and Prorations.

     

                        (a)
Purchaser shall pay for all recording costs applicable to the deed of transfer,
the premium for extended or additional coverage or endorsements to the Title
Policy to be delivered at Closing pursuant to Section
6(c) hereof and the premium for any lender’s title policy, the costs of
any Phase I environmental report, property condition assessment, appraisal, and
other third party reports obtained by Purchaser for its due diligence. Seller
shall pay for preparation of the deed of transfer, all transfer taxes applicable
to the deed of transfer, the costs of production of the title search or
abstract, the premium for the Title Policy to be delivered at Closing pursuant
to Section
6(c) hereof and the Survey required pursuant to Section
8 hereof. Each party shall pay its own attorney’s fees. Purchaser shall
pay all expenses incident to any financing obtained for the purchase of the
Property.

     

                        (b)
The following shall be prorated between the parties as of the Closing Date as
defined in Section
7: (i) ad valorem property taxes constituting a lien against the Property
for the year in which the Closing occurs and all other unpaid assessments with
respect thereto, and (ii) rents and other tenant charges, utilities, and
operating expenses for the Property for the calendar month in which Closing
occurs, subject to subsections
6(c) and 6(d)
below. If applicable, percentage rent attributable to sales at the Property for
the year in which Closing occurs shall be prorated on a straight line basis for
the year in which Closing occurs based on the number of days Seller and
Purchaser each own the Property in the year in which the Closing occurs. In the
event such proration is based upon a previous year’s taxes or assessment, after
Closing, at such time as any of the taxes or assessments are capable of exact
determination, the party having the information permitting the exact
determination shall send to the other party a detailed report of the exact
determination so made. Within thirty (30) days after both Seller and Purchaser
shall have received such report, Seller and Purchaser shall adjust the amounts
apportioned pursuant to the estimates made at Closing to reflect the exact
determinations contained in the report, and Seller or Purchaser, as the case may
be, shall pay to the other whatever amount shall be necessary to compensate for
the difference. Purchaser shall receive a credit against the Purchase Price in
the amount of all security deposits (together with interest required to be paid
thereon) held or required to be held by Seller under the Leases. Purchaser shall
have no rights to any of Seller’s utility deposits for the Property, and Seller
shall be entitled to seek a refund of the same.

     

                        (c)
Nondelinquent rent collected by Seller after Closing attributable to periods
from and after Closing shall be promptly remitted to Purchaser. Delinquent rent
collected by Seller and Purchaser after the date of Closing shall be delivered
by the recipient as follows: Within fifteen (15) days after the receipt thereof,
Seller and Purchaser agree that all rent received by Seller or Purchaser shall
be applied first to then current rents, and then to delinquent rents for periods
after Closing and then to delinquent rents for periods prior to Closing. Seller
retains the right to pursue tenants for payment of delinquent rent but may not
seek to dispossess a tenant, terminate a lease or enforce a landlord
lien.

     

    
      
         

      

      
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                        (d)
Seller, as landlord under the Leases, is currently collecting from tenants
additional rent to cover taxes, insurance, utilities, maintenance and other
operating costs and expenses incurred by Seller in connection with the
ownership, operation, maintenance and management of the Property (such expenses,
collectively “Expenses” and such collections, collectively “Collections”). Non
delinquent Collections for the month in which Closing occurs shall be prorated
in the same manner as other rents as set forth above. Subsequent to Closing
Purchaser shall calculate adjustments for Expenses incurred and Collections
received for the year of Closing and shall prepare and present to Seller a
calculation of the Collections received and Expenses incurred by each of Seller
and Purchaser attributable to each party’s period of ownership. The parties
shall make the appropriate adjusting payment between them within 30 days after
presentment to Seller of Purchaser’s calculation. Either party may inspect the
other’s books and records related to the Property to confirm the
calculation.

     

              6.
Conditions
Precedent To Purchaser’s Obligations. Seller acknowledges that as a
condition precedent to Purchaser’s obligations hereunder, the following shall
occur on or before the Closing Date, any of which conditions may be waived by
Purchaser in its sole discretion:

     

                        (a)
Purchaser shall have received a current Phase I environmental assessment
satisfactory to Purchaser prepared by a competent licensed environmental
engineer satisfactory to Purchaser that does not recommend a Phase II
environmental assessment and reflecting that there are no hazardous wastes or
hazardous materials located on or below the surface of the Property, and that
the Property is in compliance with all applicable environmental laws,
ordinances, rules and regulations.

     

                        (b)
Prior to the expiration of the Inspection Period, Seller shall have delivered to
Purchaser (i) Qualifying Tenant Estoppels (defined below) executed by tenants
occupying at least 90% of the rentable square
footage of
the Property, and (ii) any subordination, non-disturbance and attornment
agreements (“SNDA’s”)
reasonably required by Purchaser or Purchaser’s lender from tenants at the
Property. Seller agrees to use reasonable efforts to obtain the required tenant
estoppels and SNDA’s. For purposes hereof, a “Qualifying Tenant Estoppel” is a
tenant estoppel substantially in the form of Exhibit
B (or in any other form reasonably required by or acceptable to Purchaser
and Purchaser’s lender) that does not include any information that is materially
inconsistent with Seller’s representations and warranties in this
Agreement.

     

                        (c)
Chicago Title Insurance Company (the “Title
Company”) shall be irrevocably committed to issue upon Closing a 2006
ALTA Owner’s Policy of Title Insurance (the “Title
Policy”), insuring Purchaser as owner of fee simple title to the
Property, subject only to Permitted Exceptions (defined below), in the amount of
the Purchase Price, and containing such endorsements as Purchaser shall have
requested.

     

                        (d)
Each and every representation and warranty of Seller set forth in Section
10 shall be true and correct, and Seller shall not be in default under
any of its obligations under this Agreement, as of Closing.

     

    
      
         

      

      
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              7.
Closing.
Subject to all preconditions set forth herein, the closing or settlement (“Closing”)
of the transaction contemplated hereby, unless terminated in accordance with
this Agreement or as otherwise agreed upon by Purchaser and Seller, shall be
held via the mails, through the Title Company, or at the offices of Whitestone
REIT, 2600 S. Gessner Road, Suite 500, Houston, Texas 77063 at 10:00 a.m. on
January 15, 2009 or such earlier date as Seller may determine or such other
place and time as the parties may agree (such date shall
be referred to herein as the “Closing
Date”).

     

              At
Closing, Seller shall convey to Purchaser good, marketable and insurable title
to the Property by special warranty deed acceptable to Purchaser and the Title
Company (the “Deed”),
subject to (i) standard exceptions for real property taxes not yet due and
payable, and (ii) any other matters which are waived by, or acceptable to,
Purchaser pursuant to Section
9 (the “Permitted
Exceptions”).

     

              8.
Survey.
Seller at
its expense,
has ordered an ALTA survey of the Property from a reputable registered local
surveyor selected by Purchaser (“Survey”)
and delivered a copy of the Survey to the Purchaser. The Survey must indicate,
among other things, the exact location and square footage of improvements located
on the Property and shall indicate the exact metes and bounds and aggregate
acreage of the Property, together with the metes and bounds and acreage of any
and all portions of the Property located within (a) any public right of way
(including any proposed right of way or any proposed widening of any existing
right of way), (b) any body of water, (c) any 100-year flood plain, (d) any
marshlands or wetlands and (e) any easement areas, buffer zones or natural
preserves in which the construction of buildings is prohibited by any law,
ordinance, regulation or private covenant including PUD conditions governing the
Property of
the Property. After the Survey shall have been completed, the description of the
Property shall automatically be amended to conform to the legal description
based on the Survey, and thereafter, the new legal description shall be the
legal description of the Property for all purposes relating to this
Agreement.

     

              9.
Title.
Within five (5) days
after the Effective Date, Seller shall deliver to Purchaser a title insurance
commitment in the amount of the Purchase Price covering the Property issued by
the Title Company (the “Title
Commitment”). Purchaser shall have until December 31, 2008 to object to
any matters shown on the Title Commitment or Survey by written notice to Seller
(“Title
Objection Notice”). Purchaser may also object to any new matters
thereafter revealed by a title update or survey update by subsequent Title
Objection Notice to Seller. Within five (5) days after receipt of Purchaser’s
Title Objection Notice, Seller shall either (i) deliver written notice to
Purchaser of any title or Survey objections which Seller elects not to cure, or
(ii) cure or satisfy such objections (or commence to cure or satisfy such
objections as long as Seller reasonably believes such objections may be cured or
satisfied at least five (5) business days prior to Closing). Within five (5)
days after receipt of Seller’s written notification that Seller elects not to
cure a title or Survey objection, Purchaser may terminate this Agreement and
receive a full refund of the Earnest Money by delivering written notice thereof
to Seller. If Purchaser does not so terminate this Agreement, then any such
title or Survey objection which Seller elects not to cure shall be deemed waived
by Purchaser and shall be an additional Permitted Exception. If any objection
which Seller elects to cure is not satisfied by Seller at least five (5)
business days before the scheduled date of Closing, Purchaser shall have the
right to terminate this Agreement, in which case the Earnest Money shall be
returned to Purchaser and neither party shall have any further rights,
obligations or duties under this Agreement. If Seller does cure or satisfy the
objections at least five (5) business days prior to Closing, then this Agreement
shall continue in effect. Any exception to or defect in title which Purchaser
shall elect to waive, or which is otherwise acceptable to Purchaser, shall be
deemed an additional Permitted Exception to title at Closing. Seller covenants
and agrees not to alter or encumber in any way Seller’s title to the Property
after the date hereof.

     

    
      
         

      

      
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              Notwithstanding
anything in this Agreement to the contrary, Seller shall cause any deed of
trust, mortgage, deed to secure debt, judgment or other lien for a liquidated
sum encumbering the Property to be released at or before Closing.

     

              10.
Seller’s
Representations and Warranties. As of the date hereof and as of the
Closing Date (as evidenced by Seller’s downdate certificate to be provided at
Closing), Seller represents, warrants and covenants to Purchaser
that:

     

                        (a)
There are and there will be no parties in possession of any portion of the
Property as lessees, and no other party has been granted an oral or written
license, lease, option, purchase agreement or other right pertaining to the use,
purchase or possession of any portion of the Property, other than tenants in
possession under the Leases (defined hereafter). True, complete and correct
copies of all leases affecting the Property and any amendments thereto
(collectively, the “Leases”)
have been or will be furnished to Purchaser within seven (7) days after the
Effective Date as part of the Due Diligence Materials, together with true,
correct and complete copies of any service, maintenance or other contracts or
agreements with third parties relating to or affecting the Property (the “Contracts”).
A schedule and rent roll of all Leases and amendments is attached hereto as
Exhibit
C (“Lease
Schedule”) and incorporated herein by reference. Such Leases and
Contracts are valid and binding in accordance with their respective terms and
conditions, are in full force and effect, and, to Seller’s knowledge, have no
uncured breach or default by any party except as disclosed on Exhibit
C. To Seller’s knowledge, no off-sets or defenses are available to any
party under the Leases or Contracts. All Contracts are cancellable upon not more
than thirty (30) days prior written notice. No rents have been collected more
than thirty (30) days in advance and no tenant is entitled to any allowance for
decoration, redecoration or other improvements under any of the Leases (a “TI
Allowance”), except as specifically set forth on Exhibit
C. There are no leasing brokerage agreements, leasing commission
agreements or other agreements providing for the payment of any amounts, and no
commissions due, for leasing activities with respect to the Property except as
set forth in the Leases or on Exhibit
C. Purchaser shall have no liability for (and Seller hereby indemnifies
Purchaser against any claim for) any such leasing commissions and any TI
Allowance with respect to the Leases except to the extent (i) expressly
allocated to Purchaser on Exhibit
C, or (ii) expressly provided for in any current Lease or any Lease
entered into after the Effective Date that is approved by Purchaser pursuant to
Section
16 below.

     

                        (b)
The Seller has not received written notice of any default (nor does Seller have
any knowledge of any default) under any note or deed of trust related to or
secured by the Property. The execution and delivery of this Agreement, the
consummation of the transaction herein contemplated and the compliance with the
terms and provisions hereof will not conflict with or (with or without notice or
the passage of time or both) result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, loan
agreement or instrument to which the Seller is a party or by which the Seller or
the Property is bound, any applicable regulation or any judgment, order or
decree of any court having jurisdiction over the Seller or the
Property.

     

    
      
         

      

      
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                        (c)
The Seller has not received any written notice, nor is the Seller aware, of any
violation of any ordinance, regulation, law, statute, rule or restriction
relating to the Property.

     

                        (d)
There are no attachments, executions, assignments for the benefit of creditors,
or voluntary or involuntary proceedings in bankruptcy or under any applicable
debtor relief laws or any other litigation contemplated by or pending or
threatened against the Seller or the Property.

     

                        (e)
Seller has been duly organized and is validly existing under the laws of the
State of Illinois. Seller has the full right and authority to enter into this
Agreement and to transfer all of the Property to be conveyed by Seller pursuant
hereto and to consummate or cause to be consummated the transactions
contemplated herein to be made by Seller. The person signing this Agreement on
behalf of Seller is authorized to do so. This Agreement constitutes, and all
agreements and documents contemplated hereby (when executed and delivered
pursuant hereto) will constitute, the valid and legally binding obligations of
Seller, enforceable in accordance with their respective terms. No other
signatures or approvals are required to make this Agreement fully enforceable by
the Purchaser with respect to the Seller or the Property. This Agreement
constitutes, and all agreements and documents contemplated hereby (when executed
and delivered pursuant hereto) will constitute, the valid and legally binding
obligations of Seller, enforceable in accordance with their respective
terms.

     

                        (f)
The Seller has and will convey to the Purchaser good, marketable and
indefeasible title in fee simple to the Property, subject only to the Permitted
Exceptions.

     

                        (g)
There is no pending or threatened condemnation or similar proceeding or
assessment affecting the Property or any part thereof, nor to the knowledge of
the Seller is any such proceeding or assessment contemplated by any governmental
authority. There will be no claim against the Property or Purchaser for or on
account of work done, materials furnished, and utilities supplied to the
Property prior to the Closing Date. To Seller’s knowledge, there are no public
plans or proposals for changes in road grade, access, or other municipal
improvements which would adversely affect the Property or result in any
assessment; and, to Seller’s knowledge, no ordinance authorizing improvements,
the cost of which might be assessed against Purchaser or the Property, is
pending.

     

                        (h)
No portion of the Property is within the area determined to be within any flood
hazard areas, including the 100-year flood plain on the Flood Insurance Rate Map
published by the Federal Emergency Management Agency and/or by the United States
Army Corps of Engineers and/or Lake County and/or the State of Illinois, except
as may be shown on the Survey.

     

                        (i)
Seller has not entered into any agreement to dispose of its interest in the
Property or any part thereof, except for this Agreement.

     

    
      
         

      

      
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                       (j)
Seller is not a party to any litigation which is still pending, and knows of no
threatened litigation, affecting or relating to the Property.

     

                        (k)
Neither the Seller, nor to Seller’s knowledge, any other party has ever caused
or permitted any “hazardous material” (as hereinafter defined) to be placed,
held, located, or disposed of on, under, or at the Property or any part thereof
in forms or concentrations which violate applicable laws and regulations, and,
to Seller’s knowledge, neither the Property nor any part thereof has ever been
used as a dump or storage site (whether permanent or temporary) for any
hazardous material. As used herein, “hazardous material” means and includes any
hazardous, toxic, or dangerous waste, substance, or material defined as such in,
or for purposes of, the Comprehensive Environmental Response, Compensation
Liability Act (42 U.S.C. Section 9601, et seq., as amended) or any other “super
fund” or “super lien” law or any other Federal, State, or local statute, or law,
ordinance, code, rule, regulation, order or decree regulating, relating to, or
imposing liability for standards of conduct concerning any substance or
material, as presently in effect. The Property does not currently contain any
underground storage tanks.

     

              Seller
hereby indemnifies and holds harmless Purchaser from and against any and all
loss, expense (including without limitation reasonable attorney fees),
liability, cost, claim, demand, action, cause of action and suit arising out of
or in any way related to any breach of any representation, warranty, covenant or
agreement of Seller in this Agreement.

     

              11.
Broker
and Broker’s Commission.

     

              Purchaser
and Seller each represent and warrant to the other that such party has not
incurred an obligation to any other broker or agent in connection with the
transaction contemplated hereby. Each party hereby covenants and agrees to
defend, indemnify and hold harmless the other party against and from any and all
loss, expense, liability, cost, claim, demand, damage, action, cause of action
and suit arising out of or in any manner relating to the alleged employment or
use by such party of any real estate broker or agent in connection with this
transaction. The provisions of this Section
11 shall survive the Closing of this transaction.

     

              Purchaser
represents and warrants that it has not and shall not incur any broker-dealer,
underwriting or placement agent fee and/or discount related to the issuance of
the Units or Shares set forth in Section 3 hereof.

     

              12.
Survey
and Inspection. Purchaser and Purchaser’s agents, employees and
independent contractors shall have the right and privilege to enter upon the
Property during the Inspection Period to survey and inspect the Property and to
conduct soil borings, environmental assessment and toxic waste studies and other
geological, engineering or landscaping tests or studies, all at Purchaser’s sole
cost and expense. Purchaser hereby covenants and agrees to indemnify and hold
harmless Seller from any and all loss, liability, cost, claim, demand, damage,
action, cause of action and suit arising out of or in any manner related to the
exercise by Purchaser of Purchaser’s rights under this section (but not the
existence of any condition discovered in the course of Purchaser’s inspections
and testing).

     

    
      
         

      

      
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              13.
Eminent
Domain. If, after the Effective Date and prior to Closing, Seller shall
receive notice of the commencement or threatened commencement of eminent domain
or other like proceedings against the Property or any portion thereof, Seller
shall immediately notify Purchaser in writing, and Purchaser shall elect within
thirty (30) days from and after such notice, by written notice to Seller, one of
the following: (a) not to close the transaction contemplated hereby, in which
event all Earnest Money shall be refunded to Purchaser and this Agreement shall
be void and of no further force and effect; or (b) to close the purchase of the
Property contemplated hereby in accordance with its terms but subject to such
proceedings, in which event the Purchase Price shall remain the same and Seller
shall transfer and assign to Purchaser at Closing all condemnation proceeds and
rights to additional condemnation proceeds, if any. If Purchaser elects to
purchase after receipt of such a notice, all actions taken by Seller with regard
to such eminent domain proceedings, including but not limited to, negotiations,
litigation, settlement, appraisals and appeals, shall be subject to the approval
of Purchaser, which approval shall not be unreasonably withheld. If Purchaser
does not make such election within the aforesaid time period, Purchaser shall be
deemed to have elected to close the transactions contemplated hereby in
accordance with clause (b) above.

     

              14.
Property
Damage. If, after the Effective Date and prior to Closing, the Property
shall suffer significant damage as the result of fire or other casualty, Seller
shall immediately notify Purchaser in writing. In the event said damage results
in damage of the improvements situated on the Property in the amount of Two
Hundred Fifty Thousand and No/100 Dollars ($250,000.00) or
greater, Purchaser shall have the right to elect within fifteen (15) days from
and after such notice, by written notice, one of the following: (a) not to close
the transaction contemplated hereby, in which event all Earnest Money shall be
refunded to Purchaser and this Agreement shall be void and of no further force
and effect; or (b) to close the purchase of the Property contemplated hereby in
accordance with its terms but subject to such damage, in which event the
Purchase Price shall remain the same and Seller shall transfer and assign to
Purchaser at Closing all insurance proceeds received or to be received as a
result of such damage, and Purchaser shall receive a credit against the Purchase
Price for any insurance deductible or uninsured loss. If Purchaser does not make
such election within the aforesaid time period, Purchaser shall be deemed to
have elected to close the transactions contemplated hereby in accordance with
clause (b) above.

     

              In
the event less than Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00) of
damage to the improvements situated on the Property exists, this Agreement shall
remain in full force and effect, but, at Closing, Seller shall transfer and
assign to Purchaser all insurance proceeds received or to be received as a
result of such damage, and Purchaser shall receive a credit against the Purchase
Price for any insurance deductible or uninsured loss.

     

              15.
Condition
of Property. Subsequent to the Effective Date and prior to Closing,
Seller shall maintain the Property in accordance with its past practices and
ordinary maintenance, but shall not be required to provide any extraordinary
maintenance.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

              16.
Operations.
After the Effective Date and prior to the Closing Date, Seller shall neither
enter into any new, nor terminate, modify, extend, amend or renew any existing,
lease or service, management, maintenance, repair, employment, union,
construction, leasing or other contract or agreement affecting the Property
(each, a “New
Agreement”) without providing at least five (5) business days prior
notice (and opportunity to review and approve the New Agreement) to Purchaser.
Purchaser shall have five (5) business days after Purchaser’s actual receipt
(notwithstanding the notice provisions in Section
17 below) of a true, correct and complete copy of a New Agreement to
approve the same. If Purchaser does not approve any such New Agreement that
Seller will enter into prior to expiration of the Inspection Period, then
Purchaser’s sole and exclusive remedy will be to terminate this Agreement by
delivering written notice to Seller no later than five (5) business days after
receiving the New Agreement, and in such event Purchaser shall receive a full
refund of the Earnest Money. If Purchaser fails to terminate this Agreement as
set forth in the preceding sentence, it shall be deemed to have approved the New
Agreement that Seller will enter into prior to expiration of the Inspection
Period in the form provided. Seller may not enter into New Agreement after
expiration of the Inspection Period unless Purchaser has approved the same in
writing. If Purchaser approves (or is deemed to have approved) any New Agreement
and thereafter consummates the Closing under this Agreement, then it will be
responsible for any leasing commissions and TI Allowance payments expressly set
forth in the approved form of the New Agreement (whether payable before or after
the Closing Date), and Seller shall receive a credit at Closing for any such
leasing commissions and TI Allowance payments which Seller pays prior to
Closing. Seller shall cause any Contracts which Purchaser elects in its
discretion not to assume to be cancelled at or before Closing. Seller shall
promptly notify Purchaser in writing of any default by any party under any Lease
that occurs after the Effective Date, and if any such default occurs Purchaser
may terminate this Agreement and receive a full refund of the Earnest
Money.

     

              17.
Notice.
Each notice required or permitted to be given hereunder shall be in writing and
shall be deemed to have been duly given (i) two (2) business days after deposit
in registered or certified U.S. mail, postage fully prepaid, (ii) one (1)
business day after deposit with a recognized overnight delivery service such as
Federal Express or (iii) immediately upon facsimile or e-mail transmission
provided confirmation of facsimile or e-mail is received and further provided
any such facsimile or e-mail notice shall be sent by one of the other methods of
providing notice on or before the next succeeding business day. Rejection or
other refusal by the addressee to accept shall be deemed to be receipt of the
notice sent. The addresses of the parties to which notices are to be sent shall
be those set forth on the signature page of this Agreement, provided that a copy
of any notice to the Purchaser shall also be sent to T. Gaillard Uhlhorn, V,
Bass, Berry & Sims PLC, 100 Peabody Place, Suite 900, Memphis, Tennessee
38103, Fax No. 901-543-5999, email: guhlhorn@bassberry.com and provided that a
copy of any notice to the Seller shall also be sent to Richard A. Merel,
Garfield & Merel, Ltd., 223 W Jackson Blvd Ste 1010, Chicago, IL 60606, Fax
No. (312) 288-0120; email: rmerel@garfield-merel.com.

     

              18.  Remedies.
If this transaction fails to close by reason of Purchaser’s wrongful failure to
perform its obligations under this Agreement, the Earnest Money shall be
retained by Seller as liquidated damages the parties hereby acknowledging that
Seller’s actual damages in such circumstances would be difficult, if not
impossible, to determine. Seller expressly acknowledges and agrees that
retention of the Earnest Money as provided for herein shall be Seller’s sole and
exclusive remedy in the event of Purchaser’s failure to perform its obligations
hereunder. If this transaction fails to close for any reason other than
Purchaser’s wrongful failure to perform his obligations hereunder, the Earnest
Money shall promptly be refunded to Purchaser. In the event Seller fails or
refuses to convey the Property in accordance with the terms hereof or otherwise
fails to perform its obligations hereunder, Purchaser shall have the right to a
refund of all Earnest Money, specific performance and all other rights and
remedies available at law or in equity for Seller’s breach, all of which are
reserved, cumulative, and nonexclusive. Seller waives the right to assert the
defense of the lack of mutuality in any suit for specific performance instituted
by Purchaser.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

              19.
Time
of Essence. Time is of the essence of this Agreement.

     

              20.
Closing
Documents. At or prior to Closing, each party shall deliver to the other
party appropriate evidence to establish the authority of such party to enter
into and close the transaction contemplated hereby. Seller also shall execute
and deliver to the Title Company at Closing, for it to hold in escrow pending
Purchaser’s payment of the Purchase Price, (i) the Deed; (ii) a certificate with
respect to Section 1445 of the Internal Revenue Code stating, among other
things, that Seller is not a foreign corporation as defined in the Internal
Revenue Code and I.R.S. Regulations; (iii) the Assignment and Assumption
Agreement substantially in the form attached hereto as Exhibit
D; (iv) a letter to each tenant under the Leases in the form reasonably
requested by Purchaser; (v) Seller’s representation and warranty downdate
certificate under Section
10; and (vi) such other documents reasonably necessary or appropriate to
complete and evidence the transaction contemplated hereby, including without
limitation a standard title company owner’s affidavit and a warranty bill of
sale in form reasonably acceptable to Purchaser as to any personal property
included in the Property. Additionally at Closing, the parties shall enter into
an agreement that provides that in the event James C. Mastandrea is not
re-elected as a trustee of Purchaser’s general partner, Whitestone REIT, in 2009
for a three-year term and appointed Chairmen, President and CEO for any reason,
Purchaser shall repurchase the Shares or Units (as the case may be) in cash for
$5.15 for each Unit or Share transferred pursuant to Section 3
hereof.

     

              21.
Entire
Agreement. This Agreement constitutes the entire agreement of the parties
and may not be amended except by written instrument executed by Purchaser and
Seller. All prior understandings and agreements between the parties are deemed
merged herein.

     

              22.
Headings.
The section headings are inserted for convenience only and are in no way
intended to describe, interpret, define or limit the scope or content of this
Agreement or any provision hereof.

     

              23.
Possession.
Seller shall deliver actual possession of the Property at Closing.

     

              24.
Applicable
Law. This Agreement shall be construed and interpreted in accordance with
the laws of the State of Illinois.

     

              25.
Successors
and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors and
permitted assigns as the case may be, and Purchaser shall not have the right to
assign its rights hereunder without Seller’s prior written consent.

     

              26.
Surviving
Clauses. The provisions of this Agreement relating to tax prorations
after Closing, Purchaser’s indemnification with respect to its entering upon the
Property prior to Closing, Seller’s representations, covenants, warranties and
indemnity agreement in Section
10, Seller’s covenant not to encumber the Property subsequent to the date
hereof, the mutual covenants of Seller and Purchaser to indemnify each other, as
the case may be, as set forth in Section
11, shall survive any Closing pursuant to this Agreement. Except as set
forth in the preceding sentence or as otherwise expressly set forth herein, no
other provision of this Agreement shall survive the Closing of this
transaction.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

              27.
Confidentiality.
Neither Purchaser nor Seller shall make any public announcement or disclosure of
any information related to this Agreement to outside brokers or third parties,
before the Closing, without the prior written specific consent of the other
party; provided, however, that Purchaser may make disclosure of this Agreement
to its certain outside parties as necessary to perform its inspections of the
Property and as may be required under laws or regulations applicable to
Purchaser.

     

              IN
WITNESS WHEREOF, this Agreement has been duly executed on the day and year first
above written.

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                                    ADDRESSES:

                                                  	 
      	
                                                    PURCHASER:

                                                  
	 
      	 
      	 
      
	
                                                    2600
      S. Gessner Road

                                                    Suite
      500

                                                    Houston,
      Texas 77063

                                                    Attention:
      John J. Dee

                                                    Fax:
      (713) 465-8847

                                                    Email:
      jdee@whitestonereit.com

                                                  	 
      	
                                                    Whitestone
      REIT Operating Partnership, L.P.,

                                                  
	
                                                    A
      Delaware limited partnership

                                                  
	 
      
	
                                                    By:
      Whitestone REIT, a Maryland real estate

                                                  
	
                                                    investment
      trust, its general partner

                                                  
	 
      
	 
      	 
      	
                                                    By:

                                                  	 
      /s/  John J. Dee	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                                                    Name:

                                                  	John
      J. Dee  	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                                                    Title:

                                                  	  
      Chief Operating Officer	 
      
	 
      	 
      	 
      
	 
      	 
      	
                                                    SELLER:

                                                  
	 	 	 
	 	 	
                                                    Bank
      One, Chicago, NA, as successor by merger with Bank One, Wilmette, f/k/a,
      First Illinois Bank of Wilmette, as Trustee under Trust Agreement dated
      January 29, 1986 and known as Trust Number
  TWB-0454

                                                  
	 
      	 
      
	
                                                    Attention:

                                                  	 
      	 
      
	
                                                    Fax:

                                                  	 
      	 
      
	
                                                    Email:

                                                  	 
      	 
      	
                                                    By:

                                                  	 
      /s/  Christine C. Young	 
      
	 
      	 
      	 
      
	 
      	 
      	
                                                    Name:

                                                  	Christine
      C. Young  	 
      
	 
      	 
      	 
      
	 
      	 
      	
                                                    Title:

                                                  	  
      Trust Officer	 
      

                                          

                                           

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    SCHEDULE
4

     

    DUE
DILIGENCE MATERIALS

     

              (a)
Plans, drawings, specifications and engineering and architectural studies and
work (including “as built” plans and drawings, if any) with regard to the
Property that are in Seller’s possession;

     

              (b)
Any appraisals of the Property in Seller’s possession obtained during the period
during which Seller has owned the Property;

     

              (c)
Income and expense statements for the two (2) most recent complete calendar
years and the current year-to-date;

     

              (d)
Copies of all current Leases and any amendments or proposed amendments
thereto;

     

              (e)
A current rent roll for the Property setting forth, for each Lease and tenant,
(i) the portion of the Property occupied and the square footage of the space
occupied, (ii) the rent payable under such Lease, (iii) the date on which rent
is due under each Lease, (iv) all receipts for rent and the rental period for
which rent has been paid, (v) the expiration date of such Lease and any renewal
or extension options, and (vii) information regarding the status of security
deposits;

     

              (f)
Copies of all correspondence in Seller’s possession relating to the current
Leases;

     

              (g)
Copies of insurance certificates with respect to the Property;

     

              (h)
Copies of all of the Contracts and any amendments or proposed amendments
thereto;

     

              (i)
Copies of any soil boring or other similar engineering reports with respect to
the Property obtained during the period during which Seller has owned the
Property; and

     

              (j)
Any environmental assessment report or study with respect to the Property in
Seller’s possession.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    EXHIBIT
A

     

    PROPERTY
DESCRIPTION

     

    Parcel 1:
Lot 4 in McHenry Road Homesites, being a subdivision of part of the Northwest 1⁄4
of the Southwest 1⁄4 of Section 29, Township 43 North, Range 11, East of the Third
Principal Meridian, according to the Plat thereof recorded November 24, 1956 as
Document 931656, in Book 1501 of Records, Page 154, in Lake County,
Illinois.

     

    Parcel 2:
Lot 4 in Spoerlein Farm Commercial Phase 1C, being a subdivision of part of the
Northwest 1⁄4 of the Southwest 1⁄4 of Section 29, Township 43 North, Range 11, East
of the Third Principal Meridian, according to the Plat thereof recorded May 28,
1985 as Document 2357829, (except that part taken for road purposes by Case No.
93ED5), in Lake County, Illinois.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    EXHIBIT
B

     

    TENANT
ESTOPPEL CERTIFICATE

     

               
THIS TENANT ESTOPPEL CERTIFICATE (this “Estoppel”),
is executed this ________ day of _______________, 2008, by
_________________________ (“Tenant”),
to and in favor of Whitestone
REIT, a Maryland real estate investment trust, its successors and assigns
(“Purchaser”),
having its principal place of business at Woodlake Plaza, 2600 S. Gessner,
Houston, Texas 77063.

     

    R E C I T
A L S:

     

     A.
Tenant is the lessee under that certain lease executed between Tenant and
Chicago Land Trust Company, as Successor Trustee to LASALLE BANK NATIONAL
ASSOCIATION, Under Trust No. TWB-0454 (“Landlord”),
dated ______________, __200____ (the lease and all amendments thereto are
hereinafter referred to as the “Lease”),
covering all or a portion of property legally described in Schedule
I attached hereto and made a part hereof (the “Property”).

     

     B.
Purchaser is performing its due diligence as it relates to the potential
purchase of the Property from Landlord which is secured, in part, by an
assignment of leases and rents from the Property.

     

     C.
As a condition to of any said purchase of the Property, Purchaser requires that
Tenant enter into this Estoppel and Tenant acknowledges that Purchaser is
relying upon this Estoppel.

     

     NOW,
THEREFORE, Tenant does hereby certify to Purchaser as follows:

    
      
        	 
      	 
      	 
      	 
      
	 
      	
                A.

              	
                Tenant
      hereby represents, acknowledges and agrees as follows:

              
	 
      	 
      	 
      	 
      
	 
      	 
      	
                1.

              	
                The
      Lease is in full force and effect and has not been amended, modified or
      extended.

                Yes o No o

              
	 
      	 
      	 
      	
                If
      No, Please state most recent amendment.

              
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	
                2.

              	
                The
      Lease does not contain any options to purchase and/or lease additional
      space, rights of set off, rights of first refusal to purchase and/or lease
      additional space or any similar provisions regarding acquisition of
      ownership interests or additional leased space in the building except as
      follows:

              

      

       

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    
      
        
          
            
              	 	 	 	 
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	
                      3.

                    	
                      Lease
      commencement date ______________

                    
	 
      	 
      	 
      	 
      
	 
      	 
      	
                      4.

                    	
                      Lease
      termination date __________________.

                    
	 
      	 
      	 
      	 
      
	 
      	 
      	
                      5.

                    	
                      Current
      monthly rent $____________.

                    
	 
      	 
      	 
      	 
      
	 
      	 
      	
                      6.

                    	
                      CAM
      $__________

                    
	 
      	 
      	 
      	 
      
	 
      	 
      	
                      7.

                    	
                      Insurance
      $__________

                    
	 
      	 
      	 
      	 
      
	 
      	 
      	
                      8.

                    	
                      Real
      Estate Taxes $_______

                    
	 
      	 
      	 
      	 
      
	 
      	 
      	
                      9.

                    	
                      Current
      amount due $_______

                    
	 
      	 
      	 
      	 
      
	 
      	 
      	
                      10.

                    	
                      Rent
      has been paid through ________, 200_ and Tenant has not paid any rentals
      in advance.

                    
	 
      	 
      	 
      	 
      
	 
      	 
      	
                      11.

                    	
                      The
      improvements described in the Lease have been completed and accepted by
      Tenant. There is no further obligation of improvements by the
      Landlord.

                    
	 
      	 
      	 
      	 
      
	 
      	 
      	
                      12.

                    	
                      The
      security deposit under the Lease is currently
      $___________________.

                    
	 
      	 
      	 
      	 
      
	 
      	 
      	
                      13.

                    	
                      Has
      Tenant sublet any portion of the leased premises or assigned any of its
      rights under the Lease.

                    
	 
      	 
      	 
      	 
      
	
                      o Yes          o No

                    
	 
      	 
      	 
      	
                      If
      Yes, sublessee
  ____________________________________________

                    
	 
      	 
      	 
      	 
      
	 
      	 
      	
                      14.

                    	
                      Tenant
      is in full and complete possession of the premises demised under the
      Lease, such possession having been delivered by the Landlord pursuant to
      the Lease and having been accepted by the Tenant.

                    
	 
      	 
      	 
      	 
      
	 
      	 
      	
                      15.

                    	
                      Tenant
      has no existing claims, defenses or offsets under the Lease against
      Landlord, no uncured default exists under the Lease, and no event has
      occurred that would, except for the lapse of time, the giving of notice or
      both, constitute a default.

                    

            

             

          

        

      

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    
      
        
          
            
              
                	 
      	 
      	
                        16.

                      	
                        Upon
      Purchaser succeeding to Landlord’s interest under the Lease, Tenant
      covenants and agrees to attorn to Purchaser, to recognize such successor
      landlord as Tenant’s landlord under the Lease, and to be bound by and
      perform all of the obligations and conditions imposed upon Tenant by the
      Lease. If requested by Purchaser or any subsequent owner, Tenant shall
      execute a new lease with Purchaser, for a term equal to the remaining term
      of the Lease and otherwise containing the same provisions and covenants of
      the Lease.

                      
	 
      	 
      	 
      	 
      
	 
      	 
      	
                        17.

                      	
                        Tenant
      will not look to Purchaser for the return of the security deposit, if any,
      under the Lease, except to the extent that such funds are delivered to
      Purchaser.

                      
	 
      	 
      	 
      	 
      
	 
      	 
      	
                        18.

                      	
                        The
      guaranty of the Lease, if any, is in full force and
  effect.

                      
	 
      	 
      	 
      	 
      
	 
      	 
      	
                        19.

                      	
                        There
      are no actions, whether voluntary or involuntary or otherwise pending
      against Tenant under the bankruptcy laws of the United States or any
      portion of its interest in the Property or the Lease.

                      
	 
      	 
      	 
      	 
      
	 
      	
                        B.

                      	
                        Tenant
      shall deliver to Purchaser a copy of all notices Tenant delivers to or
      receives from Landlord in accordance with the notice provisions set forth
      herein. Prior to terminating the Lease due to a default by Landlord
      thereunder, Tenant agrees to notify Purchaser of such default and give
      Purchaser the opportunity to cure such default within the later of (i)
      thirty (30) days after the expiration of any notice and cure period or
      (ii) thirty (30) days of Purchaser’s receipt of such notice (or, if such
      default cannot reasonably be cured within such thirty (30) day period,
      Purchaser shall have such longer time as may be necessary to cure the
      default; provided that Purchaser commences the cure within such period and
      diligently pursues the cure thereafter).

                      
	 
      	 
      	 
      	 
      
	 
      	
                        C.

                      	
                        This
      Estoppel may be executed in any number of counterparts, each of which
      shall be deemed to be an original but all of which when taken together
      shall constitute one agreement. This Estoppel shall inure to the benefit
      of Purchaser, its successors and assigns and shall be binding upon Tenant
      and its successors and assigns.

                      
	 	 	 	 
	 
      	 
      	[REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

              

               

            

          

        

      

    

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

              IN
WITNESS WHEREOF, the Tenant has executed this Estoppel the day and year first
above written.

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                	 
      	 	 
      	 
      
	 
      	
                                                        TENANT:

                                                      
	 
      	 
      
	 
      	 
      
	 	 
	 
      	By:	 
	 
      	
                                                        Name:

                                                      	 
      
	 
      	
                                                        Its:

                                                      	 
      

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    [notary
seal]

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    EXHIBIT
C

     

    SCHEDULE
OF LEASES AND RENT ROLL

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    EXHIBIT
D

     

    ASSIGNMENT
AND ASSUMPTION AGREEMENT

     

    THIS
ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Assignment”)
is entered into as of the ____ of ____________, 20___, between
_______________________ (“Assignor”), whose address is
___________________________, and ________________________ (“Assignee”),
a _________________________ whose address is
______________________________________________________.

     

              1.
Property.
The “Property”
means the real property located in the County of ___________, State of
____________ and the County of ____________, State of __________ legally
described in Exhibit
A attached to this Assignment, together with the building, structures and
other improvements located thereon.

     

              2.
Leases.
The “Leases”
means those leases and occupancy agreements (and guarantees thereof) affecting
the Property which are described in Exhibit
B attached to this Assignment. The “Contracts”
mean those contracts which are described on Exhibit
C attached to this Assignment.

     

              3.
Security
Deposits. “Security
Deposits” means those security deposits set forth on Exhibit
B.

     

              4.
Assignment.
For good and valuable consideration received by Assignor, the receipt and
sufficiency of which are hereby acknowledged, Assignor hereby grants, transfers
and assigns to Assignee the entire right, title and interest of Assignor in and
to the Contracts, Leases and the Security Deposits.

     

              5.
Assumption.
Assignee hereby assumes the obligations of Assignor under the Contracts and as
lessor under the Leases first arising from and after the date hereof. Assignor
shall promptly notify Assignee in writing if any claim is made against Assignor
with respect to any matter which Assignee has agreed to assume in this
Assignment, specifying the nature and details of such claim. Assignor shall
cooperate fully with Assignee and its counsel and attorneys in the defense
against such claim in accordance with their judgment and discretion, and
Assignor shall not pay or settle any such claim without Assignee’s prior written
consent. No person or entity, other than Assignor, shall be deemed a beneficiary
of the provisions of this Section
5.

     

              6.
Indemnity.
Assignee agrees to indemnify, defend and hold Assignor harmless from and against
any and all claims, damages, demands, causes of action, liabilities, judgments,
losses, costs and expenses (including but not limited to reasonable attorneys’
fees) asserted against or incurred by Assignor caused by the failure of Assignee
to perform any obligation under the Contracts, and Leases
which obligation was assumed by Assignee hereunder. Assignor agrees to
indemnify, defend and hold Assignee harmless from and against any and all
claims, damages, demands, causes of action, liabilities, judgments, losses,
costs and expenses (including but not limited to reasonable attorneys’ fees)
asserted against or incurred by Assignee caused by the failure of Assignor to
perform any obligation under any of the Contracts, or the
Leases first arising prior to the date hereof.

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

              7.
Power
and Authority. Assignor represents and warrants to Assignee that it is
fully empowered and authorized to execute and deliver this Assignment, and the
individual signing this Assignment on behalf of Assignor represents and warrants
to Assignee that he or she is fully empowered and authorized to do
so.

     

              8.
Attorneys’
Fees. If either Assignee or Assignor or their respective successors or
assigns file suit to enforce the obligations of the other party under this
Assignment, the prevailing party shall be entitled to recover the reasonable
fees and expenses of its attorneys.

     

              9.
Successors
and Assigns. This Assignment shall be binding upon and inure to the
benefit of Assignor and Assignee and their respective successors and
assigns.

     

              10.
Counterparts.
This Agreement may be executed in any number of identical counterparts, any or
all of which may contain the signatures of fewer than all of the parties but all
of which shall be taken together as a single instrument.

     

              11.
Governing
Law. This Agreement shall be governed and interpreted in accordance with
the laws of the State of ___________________.

     

              IN
WITNESS WHEREOF, Assignor and Assignee have executed and delivered this
Assignment the day and year first above written.

    
      
        	 
      	 
      	 
      	 
      
	
                ASSIGNOR

              	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
                By:

              	 
      	 
      
	
                Title:

              	 
      	 
      
	 
      	 
      
	
                ASSIGNEE

              	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      

      

       

       

      21ex10-9.htm

    
      

    

    Exhibit
10.9

     

    TRUSTEE
RESTRICTED COMMON SHARE GRANT AGREEMENT

    (TIME
VESTED)

     

              THIS
RESTRICTED COMMON SHARE GRANT AGREEMENT (TIME VESTED) (this “Agreement”)
is entered into as of March
25, 2009 (the “Effective
Date”), by and between Whitestone REIT, a Maryland real estate investment
trust (the “Company”),
and Daryl
J. Carter (the “Trustee”).

     

              WHEREAS,
the Trustee serves on the Board of Trustees of the Company and in connection
therewith has rendered or will render services for and on behalf of the Company
and/or its subsidiaries or affiliates;

     

             WHEREAS,
the Company believes the Trustee should have interests that are aligned with the
interests of the Company’s shareholders; and

     

             WHEREAS,
the Company desires to compensate to grant the Trustee common shares of
beneficial interest, par value $0.001 per share, of the Company (the “Common
Shares”).

     

              NOW,
THEREFORE, IT IS AGREED, by and between the Company and the Trustee, as
follows:

     

              1.
Restricted
Common Share Grant. The Trustee is hereby granted 5,000
 Common
Shares (the “Shares”)
subject to the restrictions and on the terms and conditions set forth in this
Agreement (the “Grant”).

     

              2.
Restriction
on the Shares.

     

              (a)
Period
of Restriction. Except as otherwise set forth herein, all the Shares
issued to the Trustee pursuant to this Agreement shall be subject to a period of
restriction (the “Period
of Restriction”) during which the Trustee’s rights in and to such Shares
shall be subject to the limitations and obligations set forth in this Section
2.

     

              (b)
Lapse
of Period of Restriction. The Period of Restriction shall lapse in
accordance with the provisions of Exhibit
A, which is attached hereto and forms part of this Agreement. During the
period that the Shares are subject to the Period of Restriction, such Shares are
referred to herein as “Restricted
Common Shares.”

     

              (c)
Termination
of Trustee. Notwithstanding any other provision of this Agreement to the
contrary, if the Trustee’s position as trustee of the Company terminates for any
reason (or no reason), other than the Trustee’s death or Disability (defined as
a disability that would qualify as a total and permanent disability under the
Company’s then current long-term disability plan), any Restricted Common Shares
that are subject to the Period of Restriction on the date of the Trustee’s
termination shall be immediately forfeited by the Trustee and shall be
automatically transferred to and reacquired by the Company at no cost to the
Company, and neither the Trustee nor his or her heirs, executors, administrators
or successors shall have any right or interest in such Restricted Common Shares.
In the event of the Trustee’s death or Disability, any Restricted Common Shares
that are subject to the Period of Restriction on the date of death or Disability
shall immediately vest and the Trustee or his or her heirs, executors,
administrators or successors shall have the right and interest in such
Restricted Common Shares.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

              (d)
Escrow.
Upon the Trustee’s execution and delivery of this Agreement, the Trustee agrees
to concurrently deliver one or more executed stock powers as requested by the
Company, duly endorsed in blank for transfer, in the form attached hereto as
Exhibit
B, which shall be deposited with the Company during the Period of
Restriction. Each certificate representing Restricted Common Shares shall bear
the following legend until the lapse of the Period of Restriction with respect
to the shares represented by such certificate:

    
      
        
          
            
              
                
                  
                    
                      
                        	 
      
	
                                Transfer
      of this certificate and the shares represented hereby is restricted
      pursuant to the terms of the Restricted Common Share Grant Agreement
      pertaining to the shares represented hereby, dated as of _________ ,
      200[_], (the “Agreement”). Copies of the Agreement are on file at the
      offices of Whitestone
REIT.

                              

                      

                    

                  

                

              

            

          

        

      

    

     

    The
certificates representing the Restricted Common Shares along with the stock
power(s) shall be held in escrow by the Company until such time as either (i)
the Period of Restriction with respect to all of such Restricted Common Shares
lapses in accordance with this Agreement, in which case the shares shall be
delivered to the Trustee, or (ii) any such Restricted Common Shares are
forfeited pursuant to this Agreement, in which case such shares shall be
transferred to and reacquired by the Company in accordance with Section 2(c) of
this Agreement.

     

              (e)
Distributions.
All cash distributions on the Restricted Common Shares shall be paid directly to
the Trustee and shall not be held in escrow. Any new, substituted or additional
securities or other property issued in respect of Restricted Common Shares shall
be held in escrow, together, where applicable, with appropriate stock powers,
assignments or other transfer documents which the Trustee hereby agrees to
execute as a condition to receipt of such securities or other property. If the
Restricted Common Shares in respect of which such securities or other property
was issued are forfeited to the Company pursuant to Section 2(c) of this
Agreement, then such securities or other property shall be immediately forfeited
to the Company and automatically transferred to and reacquired by the Company at
no cost to the Company, to the same extent and in accordance with Section 2(c)
of this Agreement as if such securities or other property were Restricted Common
Shares hereunder.

     

              3.
Rights
as a Shareholder. Upon the Trustee’s execution and delivery of this
Agreement and until such time as the Restricted Common Shares are forfeited to
the Company as set forth herein, the Trustee shall be the record owner of the
Restricted Common Shares and, subject to the terms of this Agreement, shall have
all rights of a shareholder with respect to the Restricted Common Shares,
including the right to vote the Restricted Common Shares and subject to the
terms of Section 2 hereof, to receive dividends and distributions with respect
to the Restricted Common Shares.

     

      4.
Change
in Control. Notwithstanding Section 2 of this Agreement, if the Trustee
holds Restricted Common Shares at the time a Change in Control (as defined
below) occurs, the Period of Restriction with respect to such Restricted Common
Shares granted in Section 1 shall automatically lapse immediately prior to the
consummation of such Change in Control.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    A Change
of Control is defined as any of the following events:

    
      
        	 
      	 
      	 
      
	 
      	
                          (i)
      any person or entity, including a “group” as defined in Section 13(d)(3)
      of the Securities Exchange Act of 1934, other than the Company or a
      wholly-owned subsidiary thereof or any employee benefit plan of the
      Company or any of its subsidiaries, becomes the beneficial owner of the
      Company’s securities having 35% or more of the combined voting power of
      the then outstanding securities of the Company that may be cast for the
      election of trustees of the Company (other than as a result of an issuance
      of securities initiated by the Company in the ordinary course of
      business);

              	 
      
	 
      	 
      	 
      
	 
      	
                          (ii)
      as the result of, or in connection with, any cash tender or exchange
      offer, merger or other business combination or contested election, or any
      combination of the foregoing transactions, less than a majority of the
      combined voting power of the then outstanding securities of the Company or
      any successor company or entity entitled to vote generally in the election
      of the trustees of the Company or such other corporation or entity after
      such transaction are held in the aggregate by the holders of the Company’s
      securities entitled to vote generally in the election of trustees of the
      Company immediately prior to such transaction;

              	 
      
	 
      	 
      	 
      
	 
      	
                          (iii)
      during any period of two (2) consecutive years, individuals who at the
      beginning of any such period constitute the Board of Trustees of the
      Company cease for any reason to constitute at least a majority thereof,
      unless the election, or the nomination for election by the Company’s
      shareholders, of each trustee of the Company first elected during such
      period was approved by a vote of at least two-thirds (2/3rds) of the
      trustees of the Company then still in office who were (a) trustees of the
      Company at the beginning of any such period, and (b) not initially (1)
      appointed or elected to office as result of either an actual or threatened
      election and/or proxy contest by or on behalf of a person other than the
      Board of Trustees of the Company, or (2) designated by a person who has
      entered into an agreement with the Company to effect a transaction
      described in (i) or (ii) above or (iv) or (v) below;

              	 
      
	 
      	 
      	 
      
	 
      	
                          (iv)
      a complete liquidation or dissolution of the Company; or

              	 
      
	 
      	 
      	 
      
	 
      	
                          (v)
      the sale or other disposition of all or substantially all of the assets of
      the Company to any Person (other than a transfer to a
      subsidiary)).

              	 
      

      

       

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    5. Withholding.
If the Trustee makes an election under Section 83(b) of the Internal Revenue
Code of 1986 (the “Code”)
with respect to the Restricted Common Shares, the grant made pursuant to this
Grant shall be conditioned upon the prompt payment to the Company of any
applicable withholding obligations or withholding taxes by the Trustee (“Withholding
Taxes”). Failure by the Trustee to pay such Withholding Taxes will render
this Grant null and void ab
initio and the Restricted Common Shares granted hereunder will
immediately be canceled. If the Trustee does not make an election under Section
83(b) of the Code with respect to the Restricted Common Shares, upon the lapse
of the Period of Restriction with respect to any portion of the Restricted
Common Shares (or property distributed with respect thereto), the Company shall
satisfy the required Withholding Taxes as set forth in the Internal Revenue
Service guidelines for the employer’s minimum statutory withholding with respect
to Trustee and issue vested shares to the Trustee without restriction. In the
sole discretion of the Company, the Company may satisfy the required Withholding
Taxes by withholding from the Restricted Common Shares included in the Grant
that number of whole shares necessary to satisfy such taxes as of the date the
restriction lapse with respect to such Restricted Common Shares based on the
Fair Market Value of the Shares (defined for purposes of this Grant, as of any
date (i) the average of the closing sales prices of the Common Shares on all
national securities exchanges on which the Common Shares may at the time be
listed, or any other such exchange on which the Common Shares are traded, on
such date, or in the absence of reported sales on such date, the average closing
sales prices on the immediately preceding date on which sales were reported,
(ii) if on any day the Common Shares shall not be quoted on a national
securities exchange, the average of the high and low bid and asked prices on
such day in the over-the-counter market as reported by National Quotation Bureau
Incorporated, or any similar successor organization, or (iii) in the event there
is no public market or over-the-counter market for the Common Shares on such
date, the fair market value as determined, in good faith, by the Board of
Trustees of the Company in its sole discretion).

     

              6.
Restrictions
on Transfer. During the Period of Restriction, the Trustee shall not
sell, transfer, pledge, hypothecate, assign, exchange or otherwise dispose of
the Restricted Common Shares. Any attempted sale, transfer, pledge,
hypothecation, assignment, exchange or other disposition shall be null and void
and of no force or effect and the Company shall have the right to disregard the
same on its books and records and to issue “stop transfer” instructions to its
transfer agent.

     

              7.
Consent
to Electronic Delivery. The Company may choose to deliver certain
statutory materials relating to the Grant in electronic form. By accepting this
Agreement, the Trustee agrees that the Company may deliver any documents
required by the Securities and Exchange Commission and the Company’s annual
report to the Trustee in an electronic format. If at any time the Trustee would
prefer to receive paper copies of these documents, please contact Chief
Financial Officer of the Company to request paper copies of these
documents.

     

              8.
No
Rights Conferred. Nothing in this Agreement shall give the Trustee any
right to continue in the employ or service of the Company, any affiliate or any
subsidiary and/or as a member of the Company’s Board of Trustees or in any other
capacity, or interfere in any way with the right of the Company, any affiliate
or any subsidiary to terminate the employment or services of the
Trustee.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

              9.
Adjustments.
All references to the number and class of shares covered by this Agreement and
other terms in this Agreement may be appropriately adjusted, by a vote of the
majority of the members of the Board of Trustees of the Company, in the event of
certain unusual or non-recurring transactions, including an unusual or
non-recurring dividend or other distribution (whether in the form of an
extraordinary cash dividend, dividend of Common Shares, other securities or
other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Common Shares or other securities of the Company,
issuance of warrants or other rights to purchase Common Shares or other
securities of the Company, or other similar corporate transaction or event
affects the Common Shares. In such an event, the Board of Trustees of the
Company may in an equitable and proportionate manner (and, as applicable, in
such equitable and proportionate manner as is consistent with Sections 422 and
409A of the Internal Revenue Code of 1986, as amended from time to time (the
“Code”) and the regulations thereunder and with Section 162(m) of the Code)
either: (i) adjust the number of Shares, provided that the number of Shares
shall always be a whole number; (ii) provide for an equivalent award in respect
of securities of the surviving entity of any merger, consolidation or other
transaction or event having a similar effect; or (iii) make provision for a cash
payment to the Trustee for the Shares.

     

              10.
Compliance
with Section 409A of the Code. The Trustee hereby consents (without
further consideration) to any change to this Agreement or the Grant so the
Trustee can avoid paying penalties under Section 409A of the Code, even if those
changes affect the terms and conditions of this Agreement of the Grant and
reduce its value or potential value.

     

              11.
Binding
Effect. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, successors and permitted assigns. This Agreement may not be
assigned or transferred in whole or in part by the Trustee, nor may the Trustee
delegate any duty or obligation under this Agreement, and any attempt to so
assign, transfer or delegate shall be null and void and of no force or
effect.

     

              12.
Interpretation
of this Agreement. All determinations and interpretations made by the
Board of Trustees of the Company with regard to any questions arising under this
Agreement shall be final, binding and conclusive as to all persons, including
without limitation the Trustee and any person claiming rights from or through
the Trustee.

     

              13.
Venue.
Each party to this Agreement hereby irrevocably (i) consents and submits to the
exclusive jurisdiction of the state and federal courts in Harris County, Texas
in connection with any disputes arising out of this Agreement, and (ii) waives
any objection based on venue or inconvenient forum with respect to any action
instituted therein arising under this Agreement or the transactions contemplated
hereby, and agrees that any dispute with respect to such matters shall be heard
only in the courts described above.

     

              14.
Governing
Law; Entire Agreement; Amendment. This Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland, without regard
to such state’s conflict of laws principles. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof. This Agreement may be
amended by a majority of the members of the Board of Trustees, subject to the
Trustee’s consent if such amendment materially and adversely affects the rights
of the Trustee, except that the consent of the Trustee shall not be required for
any amendment made pursuant to Section 10 of this Agreement.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

              15.
Tax
Elections. THE TRUSTEE UNDERSTANDS THAT HE OR SHE (AND NOT THE COMPANY)
SHALL BE RESPONSIBLE FOR THE TRUSTEE’S OWN TAX LIABILITY THAT MAY ARISE AS A
RESULT OF THE ACQUISITION OF THE SHARES HEREUNDER. THE TRUSTEE ACKNOWLEDGES AND
AGREES THAT HE OR SHE HAS CONSIDERED THE ADVISABILITY OF ALL TAX ELECTIONS IN
CONNECTION WITH THE ISSUANCE OF THE SHARES, INCLUDING THE MAKING OF AN ELECTION
UNDER SECTION 83(b) OF THE CODE. THE TRUSTEE FURTHER ACKNOWLEDGES AND AGREES
THAT, IF THE TRUSTEE DETERMINES TO MAKE AN ELECTION UNDER SECTION 83(b) OF THE
CODE, (i) THE TRUSTEE (AND NOT THE COMPANY) IS SOLELY RESPONSIBLE FOR PROPERLY
AND TIMELY COMPLETING AND FILING ANY SUCH SECTION 83(b) ELECTION, AND (ii) THE
TRUSTEE AGREES TO TIMELY PROVIDE A COPY OF THE ELECTION TO THE COMPANY AS
REQUIRED UNDER THE CODE.

     

              16.
Notices.
Any notice, demand or request required or permitted to be given under this
Agreement shall be in writing and shall be deemed given (i) when delivered
personally, or (ii) three days after being deposited in the United States mail,
by certified or registered mail, postage prepaid, or (iii) the next business day
after sent by nationally recognized overnight delivery service, and addressed,
if to the Company, at its principal place of business, Attention: Chief
Financial Officer, and if to the Trustee, at his or her most recent address as
shown in the employment or stock records of the Company.

     

              IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first written above.

    
      
        	 
      	 
      	 
      
	 
      	
                Whitestone
      REIT

              
	 
      	 
      	 
      
	 
      	
                By:

              	 /s/
      James C. Mastandrea
	 
      	 
      	 
      
	 
      	
                Name:

              	     
      James C. Mastandrea
	 
      	 
      	 
      
	 
      	
                Title:

              	     
      Chairman of the Board of Trustees
	 
      	 
      	 
      
	 
      	
                Trustee:    /s/
      Daryl S. Carter

              
	 
      	 
      	 
      
	 
      	
                Date:

              	      March
      25, 2009  
	 
      	 
      	 
      

      

       

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    Exhibit
A

     

    LAPSE
OF PERIOD OF RESTRICTION

    
      
        
          
            
              
                	 
      	 
      	 
      	 
      	 
      
	
                        Number
      of Shares

                      	 
      	
                        Vesting
      Date

                      	 
      	
                        Percentage

                        of
      Shares

                      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                        5,000

                      	 
      	
                        March
      25, 2010

                      	 
      	
                        34%

                      
	 
      	 
      	
                        March
      25, 2011

                      	 
      	
                        33%

                      
	 
      	 
      	
                        March
      25, 2012

                      	 
      	
                        33%

                      

              

               

            

          

        

      

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    Exhibit
B

     

    STOCK
POWER

     

    For value
received, I hereby sell, assign and transfer unto ___________________________
Common Shares of Whitestone REIT standing in my name on the books of said
Company represented by Certificate(s) Number(s) ________ herewith, and do
hereby irrevocably constitute and appoint ________ attorney to transfer the
said stock on the books of said Company with full power of substitution in the
premises.

    
      
        
          	 
      	 
      
	
                  Date:

                	 
      
	 
      	 
      
	
                  Printed
      Name:

                	 
      
	 
      	 
      
	
                  Signature:

                	 
      
	 
      	 
      
	
                  Witness
      Signature:

                	 
      

        

         

         

        8

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