TERM LOAN AGREEMENT among

Exhibit 10.29

TERM LOAN AGREEMENT

among

WHITESTONE REIT OPERATING PARTNERSHIP, L.P., WHITESTONE PIMA
NORTE LLC, WHITESTONE REIT OPERATING PARTNERSHIP III LP,
WHITESTONE REIT OPERATING PARTNERSHIP III GP LLC and HARTMAN REIT
OPERATING PARTNERSHIP III LP LTD

and

KEYBANK NATIONAL ASSOCIATION

and

OTHER LENDERS WHICH MAY BECOME PARTIES TO THIS AGREEMENT

and

KEYBANK NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT

Dated as of January __, 2008

TABLE OF CONTENTS

-i-

-ii-

-iii-

-iv-

-v-

-vi-

-vii-

-viii-

Exhibits to Term Loan Agreement

Exhibit A – Form of Term Note

Exhibit B – Form of Completed Loan Request

Exhibit C – Form of Compliance Certificate

Exhibit D – Form of Assignment and Assumption

-ix-

-x-

TERM LOAN AGREEMENT

          This TERM LOAN AGREEMENT is made as of the ____ day of January, 2008, by and among WHITESTONE REIT OPERATING PARTNERSHIP, L.P., a Delaware limited a partnership (“Whitestone OP”), WHITESTONE PIMA NORTE LLC, a Texas limited liability company (“Pima Norte”), WHITESTONE REIT OPERATING PARTNERSHIP III LP, a Texas limited partnership (“Whitestone III”), HARTMAN REIT OPERATING PARTNERSHIP III LP LTD, a Texas limited partnership (“Whitestone III LP LTD”) and WHITESTONE REIT OPERATING PARTNERSHIP III GP LLC, a Texas limited liability company (“Whitestone III GP LLC” and, collectively with Whitestone OP, Pima Norte, Whitestone III and Whitestone III LP LTD, the “Borrower”), each having its principal place of business at 2600 South Gessner, Suite 500, Houston, Texas 77063; KEYBANK NATIONAL ASSOCIATION (“KeyBank”), having a principal place of business at 127 Public Square, Cleveland, Ohio 44114, and the other lending institutions which may become parties hereto pursuant to §20 (individually, a “Lender” and collectively, the “Lenders”); and KEYBANK NATIONAL ASSOCIATION, as administrative agent for itself and each other Lender (the “Agent”).

RECITALS

          A. The Borrower is primarily engaged in the business of owning, acquiring, developing, renovating and operating retail, office or mixed office/warehouse properties.

          B. Pima Norte owns approximately 33,405 square feet in the Pima Norte Office Condominium Project located at 36600 North Pima Road in the town of Carefree, County of Maricopa, State of Arizona.

          C. Whitestone REIT, a Maryland real estate investment trust (the “Trust”), is the sole general partner of Whitestone OP, holds in excess of 62% of the partnership interests in Whitestone OP as of the date of this Agreement, is qualified to elect REIT status for income tax purposes and has agreed to guaranty the obligations of the Borrower hereunder and under the other Loan Documents (as defined below).

          D. Whitestone OP is the 100% owner and sole member of Pima Norte.

          E. Whitestone OP is the 100% owner and sole member of Whitestone III GP LLC, which limited liability company is the sole general partner of Whitestone III and of Whitestone III LP LTD, the sole limited partner of Whitestone III.

          F. The Borrower and the Trust have requested, and the Lenders have agreed to provide, a secured term loan to the Borrower pursuant to the terms and conditions hereof.

1

          NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto agree as follows:

          §1. DEFINITIONS AND RULES OF INTERPRETATION .

          §1.1. Definitions. The following terms shall have the meanings set forth in this §1 or elsewhere in the provisions of this Agreement referred to below:

           Accountants . In each case, independent certified public accountants reasonably acceptable to the Majority Lenders. The Lenders hereby acknowledge that the Accountants may include Pannell Kerr Forster of Texas PC and any so-called “big-four” accounting firm.

           Accounts Payable . Accounts payable of the Borrower, the Trust and their respective Subsidiaries, as determined in accordance with GAAP.

           Affiliate . With reference to any Person, (i) any director, officer, general partner, trustee or managing member (or the equivalent thereof) of that Person, (ii) any other Person controlling, controlled by or under direct or indirect common control of that Person, (iii) any other Person directly or indirectly holding five percent (5%) or more of any class of the capital stock or other equity interests (including options, warrants, convertible securities and similar rights) of that Person, (iv) any other Person five percent (5%) or more of any class of whose capital stock or other equity interests (including options, warrants, convertible securities and similar rights) is held directly or indirectly by that Person, and (v) any Person directly or indirectly controlling that Person, whether through a management agreement, voting agreement, other contract or otherwise.

           Agent . See the preamble to this Agreement. The Agent shall include any successor agent, as permitted by §16.

           Agent’s Head Office . The Agent’s office located at 127 Public Square, Cleveland, Ohio 44114, or at such other location as the Agent may designate from time to time, or the office of any successor agent permitted under §16.

           Agreement . This Term Loan Agreement, including the Schedules and Exhibits hereto, as the same may be from time to time amended, restated, modified and/or supplemented and in effect.

           Agreement of Limited Partnership of the Borrower . Collectively, (i) the Amended and Restated Agreement of Limited Partnership of Whitestone OP, dated December 31, 1998, among the Trust and the limited partners named therein, (ii) the Agreement of Limited Partnership of Whitestone III, dated March 4, 2005, (iii) the Agreement of Limited Partnership of Whitestone III LP LTD, dated March 2, 2005, and (iv) the Operating Agreement of Whitestone III GP LLC, dated March 1, 2005, and (v) the

2

Operating Agreement of Pima Norte, dated December 11, 2007, in each case as amended through the date hereof and as the same may be further amended from time to time as permitted by §8.20.

           Anti-Terrorism Order . Executive Order No. 13,224 66 Fed Reg. 49,079 (2001) issued by the President of the United States of America (Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism).

           Applicable Libor Margin . Two percent (2%).

           Assignment and Assumption . See §20.1.

           Base Rate . The higher of (i) the variable per annum rate of interest announced from time to time by KeyBank as its “base rate” and (ii) one half of one percent (1/2%) plus the Federal Funds Rate. The Base Rate is a reference rate and does not necessarily represent the lowest or best rate being charged to any customer. Any change in the Base Rate during an Interest Period shall be effective and result in a corresponding change on the same day in the rate of interest accruing from and after such day on the unpaid balance of principal of the Base Rate Loans, if any, effective on the day of such change in the Base Rate, without notice or demand of any kind.

           Base Rate Loan(s) . Those portions of the Term Loan bearing interest calculated by reference to the Base Rate.

           Borrower . See the preamble hereto.

           Building(s) . Individually and collectively, the buildings, structures and improvements now or hereafter located on the Real Estate Assets.

           Business Day . For all purposes other than as covered by clause (ii) below, any day other than a Saturday, Sunday or legal holiday on which banks in Cleveland, Ohio are open for the conduct of a substantial part of their commercial banking business; and (ii) with respect to all notices and determinations in connection with, and payments of principal and interest on, Libor Rate Loans, any day that is a Business Day described in clause (i) and that is also a Libor Business Day.

           Capital Expenditures . Any expenditure for any item that would be treated or defined as a capital expenditure under GAAP.

           Capital Reserve . For any period, a capital reserve equal to the weighted average square feet of the Real Estate Assets during the applicable period, multiplied by $0.15 per annum.

           Capitalization Rate . The Capitalization Rate shall be 9.25%.

3

           Capitalized Leases . Leases under which the Borrower or any of its Subsidiaries or any Partially-Owned Entity is the lessee or obligor, the discounted future rental obligations under which are required to be capitalized on the balance sheet of the lessee or obligor in accordance with GAAP.

           Cash and Cash Equivalents . As of any date of determination, the sum of (a) the aggregate amount of unrestricted cash then actually held by the Borrower or any of its Subsidiaries (excluding without limitation, until forfeited or otherwise entitled to be retained by the Borrower or any of its Subsidiaries, tenant security and other restricted deposits), and (b) the aggregate amount of unrestricted cash equivalents (valued at fair market value) then held by the Borrower or any of its Subsidiaries. As used in this definition, (i) “unrestricted” means the specified asset is not subject to any Liens in favor of any Person, and (ii) “cash equivalents” means that such asset has a liquid, par value in cash and is convertible to cash on demand. Notwithstanding anything contained herein to the contrary, the term Cash and Cash Equivalents shall not include the commitments of the lenders to make revolving loans or any other extension of credit under the Revolving Credit Agreement.

           CERCLA . See §7.18.

           Closing Date . January __, 2008.

           Code . The Internal Revenue Code of 1986, as amended and in effect from time to time.

           Commitment . With respect to each Lender, the amount set forth from time to time on Schedule 1 hereto as the amount of such Lender’s Commitment to make the Term Loan, as such Schedule 1 may be updated by the Agent from time to time.

           Commitment Percentage . With respect to each Lender, the percentage set forth on Schedule 1 hereto as such Lender’s percentage of the Term Loan Commitment, as such Schedule 1 may be updated by the Agent from time to time.

           Completed Loan Request . A loan request accompanied by all information required to be supplied under the applicable provisions of §2.4.

           Consolidated or consolidated . With reference to any term defined herein, shall mean that term as applied to the accounts of the Borrower, the Trust and their respective Subsidiaries, consolidated in accordance with GAAP in accordance with the terms of this Agreement.

           Consolidated EBITDA . In relation to the Borrower, the Trust and their respective Subsidiaries for any applicable period, an amount equal to, without double-counting, the net income or loss of the Borrower, the Trust and their respective Subsidiaries determined

4

in accordance with GAAP (before minority interests and excluding losses attributable to the sale or other disposition of assets and adjusted to eliminate the straight-lining of rents) for such period, plus (x) the following to the extent deducted in computing such Consolidated net income for such period: (i) Consolidated Total Interest Expense for such period, (ii) real estate depreciation and amortization for such period, and (iii) other non-cash charges for such period; and minus (y) all gains attributable to the sale or other disposition of assets or debt restructurings in such period, in each case adjusted to include the Borrower’s, the Trust’s or any Subsidiary’s pro rata share of EBITDA (and the items comprising EBITDA) from any Partially-Owned Entity in such period, based on its percentage ownership interest in such Partially-Owned Entity (or such other amount to which the Borrower, the Trust or such Subsidiary is entitled or for which the Borrower, the Trust or such Subsidiary is obligated based on an arm’s length agreement), provided that for purposes of calculating the Interest Coverage Ratio (§10.2) and the Fixed Charge Coverage Ratio (§10.3), Consolidated EBITDA shall only include EBITDA from a Partially-Owned Entity to the extent cash income is actually received in the applicable period by the Borrower, the Trust or such Subsidiary in the form of dividends or similar distributions.

           Consolidated Fixed Charges . For any applicable period, an amount equal to (i) Consolidated Total Interest Expense (including, in any event, capitalized interest) for such period plus (ii) the aggregate amount of scheduled principal payments of Indebtedness (excluding balloon payments at maturity) required to be made during such period by the Borrower, the Trust and their respective Subsidiaries on a Consolidated basis plus (iii) the Capital Reserve applicable to such period plus (iv) the dividends and distributions, if any, paid or required to be paid during such period on the Preferred Equity, if any, of the Borrower, the Trust and their respective Subsidiaries (other than dividends paid in the form of capital stock).

           Consolidated Tangible Net Worth . As of any date of determination, an amount equal to the total shareholders’ equity of the Borrower and its Subsidiaries, as determined in accordance with GAAP, as reported on the Borrower’s Consolidated balance sheet, less all assets that are considered to be intangible assets under GAAP, including, without limitation, customer lists, goodwill, computer software, copyrights, trade names trademarks, patents, franchises, licenses, unamortized deferred charges, unamortized debt discount and capitalized research and development costs.

           Consolidated Total Indebtedness . As of any date of determination, Consolidated Total Indebtedness means for the Borrower, the Trust and their respective Subsidiaries, all obligations, contingent or otherwise, which should be classified on the obligor’s balance sheet as liabilities, or to which reference should be made by footnotes thereto, all in accordance with GAAP, including, in any event, the sum of (without double-counting), all Indebtedness outstanding on such date, in each case whether Recourse, Without Recourse or contingent, provided , however , that amounts not drawn under the Revolving Credit Agreement on such date shall not be included in calculating Consolidated Total Indebtedness, and provided , further , that (without double-counting), each of the following

5

shall be included in Consolidated Total Indebtedness: (a) all amounts of guarantees, indemnities for borrowed money, stop-loss agreements and the like provided by the Borrower, the Trust and their respective Subsidiaries, in each case in connection with and guarantying repayment of amounts outstanding under any other Indebtedness; (b) all amounts for which a letter of credit has been issued for the account of the Borrower, the Trust or any of their respective Subsidiaries; (c) all amounts of bonds posted by the Borrower, the Trust or any of their respective Subsidiaries guaranteeing performance or payment obligations; (d) all lease obligations (including under Capital Leases) and (e) all liabilities of the Borrower, the Trust or any of their respective Subsidiaries as partners, members or the like for liabilities (whether such liabilities are Recourse, Without Recourse or contingent obligations of the applicable partnership or other Person) of partnerships or other Persons in which any of them have an equity interest, which liabilities are for borrowed money or any of the matters listed in clauses (a), (b), (c) or (d) above. Without limitation of the foregoing (without double counting), with respect to any Partially-Owned Entity, (x) to the extent that the Borrower, the Trust or any of their respective Subsidiaries or such Partially-Owned Entity is providing a completion guaranty in connection with a construction loan entered into by a Partially-Owned Entity, Consolidated Total Indebtedness shall include the Borrower’s, the Trust’s or such Subsidiary’s pro rata liability under the Indebtedness relating to such completion guaranty (or, if greater, the Borrower’s, the Trust’s or such Subsidiary’s potential liability under such completion guaranty) and (y) in connection with the liabilities described in clauses (a) and (d) above (other than completion guarantees, which are referred to in clause (x)), the Consolidated Total Indebtedness shall include the portion of the liabilities of such Partially-Owned Entity which are attributable to the Borrower’s, the Trust’s or such Subsidiary’s percentage equity interest in such Partially-Owned Entity or such greater amount of such liabilities for which the Borrower, the Trust or their respective Subsidiaries are, or have agreed to be, liable by way of guaranty, indemnity for borrowed money, stop-loss agreement or the like, it being agreed that, in any case, Indebtedness of a Partially-Owned Entity shall not be excluded from Consolidated Total Indebtedness by virtue of the liability of such Partially-Owned Entity being Without Recourse. For purposes hereof, the amount of borrowed money shall equal the sum of (1) the amount of borrowed money as determined in accordance with GAAP plus (2) the amount of those contingent liabilities for borrowed money set forth in subsections (a) through (e) above, but shall exclude any adjustment for so-called “straight-line interest accounting”.

           Consolidated Total Interest Expense . For any applicable period, the aggregate amount of interest required in accordance with GAAP to be paid, accrued, expensed or, to the extent it could be a cash expense in the applicable period, capitalized, without double-counting, by the Borrower, the Trust and their respective Subsidiaries during such period on: (i) all Indebtedness of the Borrower, the Trust and their respective Subsidiaries (including the Loans, obligations under Capital Leases (to the extent Consolidated EBITDA has not been reduced by such Capital Lease obligations in the applicable period) and any Subordinated Indebtedness and including original issue discount and amortization of prepaid interest, if any, but excluding any Distribution on Preferred Equity), (ii) all amounts available for borrowing, or for drawing under letters of credit, if

6

any, issued for the account of the Borrower, the Trust or any of their respective Subsidiaries, but only if such interest was or is required to be reflected as an item of expense, and (iii) all commitment fees, agency fees, facility fees, balance deficiency fees and similar fees and expenses in connection with the borrowing of money.

           Conversion Request . A notice given by the Borrower to the Agent of its election to convert or continue a Loan in accordance with §2.5.

           Deed of Trust . The Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated as of the date hereof, made by Pima Norte in favor of the Agent.

           Default . When used with reference to this Agreement or any other Loan Document, an event or condition specified in §14.1 that, but for the requirement that time elapse or notice be given, or both, would constitute an Event of Default.

           Delinquent Lender . See §16.5(c).

           Disqualifying Environmental Event . Any Release or threatened Release of Hazardous Substances, any violation of Environmental Laws or any other similar environmental event with respect to the Project that will, in the Agent’s reasonable opinion, cost in excess of $50,000 to remediate.

           Disqualifying Structural Event . Any structural issue with respect to the Project that will, in the Agent’s reasonable opinion, cost in excess of $50,000 to remediate.

           Distribution . With respect to:

           Dollars or $ . Lawful currency of the United States of America.

7

           Drawdown Date . The date on which any portion of the Term Loan is converted or continued in accordance with §2.5.

           Eligible Assignee . Any of (a) a commercial bank (or similar financial institution) organized under the laws of the United States, or any State thereof or the District of Columbia, and having total assets in excess of $500,000,000; (b) a savings and loan association or savings bank organized under the laws of the United States, or any State thereof or the District of Columbia, and having a net worth of at least $100,000,000, calculated in accordance with GAAP; and (c) a commercial bank (or similar financial institution) organized under the laws of any other country (including the central bank of such country) which is a member of the Organization for Economic Cooperation and Development (the “OECD”), or a political subdivision of any such country, and having total assets in excess of $500,000,000, provided that such bank (or similar financial institution) is acting through a branch or agency located in the United States of America. In no event will the Borrower or any Affiliate of the Borrower be an Eligible Assignee.

           Employee Benefit Plan . Any employee benefit plan within the meaning of §3(3) of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate, other than a Multiemployer Plan.

           Environmental Indemnity Agreement . Environmental and Hazardous Substances Indemnity Agreement, dated as of the date hereof, between Pima Norte and the Agent.

           Environmental Laws . See §7.18(a).

           Environmental Reports . See §7.18

           ERISA . The Employee Retirement Income Security Act of 1974, as amended and in effect from time to time.

           ERISA Affiliate . Any Person which is treated as a single employer with the Borrower under §414 of the Code.

           ERISA Reportable Event . A reportable event with respect to a Guaranteed Pension Plan within the meaning of §4043 of ERISA and the regulations promulgated thereunder.

           Event of Default . See §14.1.

           Excluded Litigation Fees . The legal fees and disbursements paid by the Borrower during the applicable period in connection with litigation among Allen R. Hartman, Hartman Management L.P. and the Trust, provided that “Excluded Litigation Fees” shall not include any legal fees and disbursements incurred by the Borrower in defending any litigation commenced by the Trust’s shareholders (including, without limitation, Allen R. Hartman) in their capacity as such (other than in connection with litigation commenced

8

by and/or involving solely Allen R. Hartman (and not by and/or involving any other shareholder(s)) in his capacity as a shareholder).

           Extension . See §2.7.

           Extension Fee . See §2.7.

           Facility Fee . See §2.3(e).

           Fair Market Value of Real Estate Assets . As of any date of determination, an amount equal to (i) Consolidated Net Operating Income for the most recent four (4) consecutive complete fiscal quarters less (ii) the Capital Reserve applicable to such period; with the product thereof being divided by (iii) the Capitalization Rate. Notwithstanding the foregoing, (i) with respect to any Real Estate Asset acquired during the applicable period, Fair Market Value of Real Estate Assets shall be calculated as follows: (x) from acquisition through the first two complete fiscal quarters after such acquisition, the Net Operating Income from such Real Estate Asset shall be excluded and it shall be included in Fair Market Value of Real Estate Assets at its cost basis plus the cost of improvements made during the applicable period (but in no event shall such aggregate cost value exceed the “as stabilized” appraised value of such Real Estate Asset, as reasonably determined by the Agent) ; (y) once the acquired Real Estate Asset has been owned by the Borrower for three complete fiscal quarters, such Real Estate Asset shall no longer be valued at its cost basis but shall be valued based upon its Net Operating Income for such three fiscal quarters, annualized, less a capital reserve equal to the total number of square feet of such Real Estate Asset multiplied by $0.15, with the sum thereof being divided by the Capitalization Rate; and (z) once the acquired Real Estate Asset has been owned by the Borrower for four complete fiscal quarters, such Real Estate Asset shall no longer be valued at its cost basis but shall be valued based upon its Net Operating Income for such four fiscal quarters in the manner set forth in the first sentence above, and (ii) Net Operating Income from Real Estate Assets removed sold or otherwise disposed of during the applicable period shall be excluded.

           Federal Funds Rate . For any day, a fluctuating interest rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three (3) federal funds brokers of recognized standing selected by the Agent.

           Financial Statement Date . September 30, 2007.

9

          “ funds from operations” .  As defined in accordance with resolutions adopted by the Board of Governors of the National Association of Real Estate Investment Trusts, as in effect at the applicable date of determination.

           GAAP .  Generally accepted accounting principles, consistently applied.

           G and A Expenses .  All payroll and other employment-related expenses incurred by the Trust in connection with becoming a self-managed REIT.

           Governmental Authority . Any federal, state, county or municipal government, or political subdivision thereof, any governmental or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality, or public body, or any court, administrative tribunal, or public utility.

           Guaranteed Pension Plan . Any employee pension benefit plan within the meaning of §3(2) of ERISA maintained or contributed to by the Borrower or the Trust, as the case may be, or any ERISA Affiliate of any of them the benefits of which are guaranteed on termination in full or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.

           Guaranty . The Unlimited Guaranty, dated as of the date hereof, made by the Trust and certain other parties in favor of the Agent and the Lenders pursuant to which the Trust and such other parties guarantee to the Agent and the Lenders the unconditional payment and performance of the Obligations.

           Hazardous Substances . See §7.18(b).

           Indebtedness . All obligations, contingent and otherwise, that in accordance with GAAP should be classified upon the obligor’s balance sheet as liabilities, or to which reference should be made by footnotes thereto, including in any event and whether or not so classified: (a) all debt and similar monetary obligations, whether direct or indirect, including, without limitation, all Obligations and all obligations under any hedge, swap or other interest rate protection arrangement, any forward purchase contract or any put; (b) all liabilities secured by any mortgage, pledge, security interest, lien, charge, or other encumbrance existing on property owned or acquired subject thereto, whether or not the liability secured thereby shall have been assumed; (c) all reimbursement obligations under letters of credit; and (d) all guarantees for borrowed money, endorsements and other contingent obligations, whether direct or indirect, in respect of indebtedness or obligations of others, including any obligation to supply funds (including partnership obligations and capital requirements) to or in any manner to invest in, directly or indirectly, the debtor, to purchase indebtedness, or to assure the owner of indebtedness against loss, through an agreement to purchase goods, supplies, or services for the purpose of enabling the debtor to make payment of the indebtedness held by such owner or otherwise.

10

           Interest Payment Date . As to any Base Rate Loan and any Libor Rate Loan, the tenth day of any calendar month in which such Loan is outstanding, and with respect to any Libor Rate Loan, also on the last day of the applicable Interest Period, but no less frequently than quarterly.

           Interest Period . With respect to all or any portion of the Term Loan, as applicable, but without duplication of any other Interest Period, (a) initially, the period commencing on the Drawdown Date of such Loan and ending (as selected by the Borrower in a Completed Loan Request): (i) for any Base Rate Loan, the first occurring tenth day of a calendar month after such Base Rate Loan is made (whether by borrowing or by conversion from a Libor Rate Loan), and (ii) for any Libor Rate Loan, 30, 60, 90 or 180 days after the Drawdown Date of such Loan; and (b) thereafter, each period commencing at the end of the last day of the immediately preceding Interest Period applicable to such Loan and ending on the last day of the applicable period set forth in (a)(i) and (ii) above (as selected by the Borrower in a Conversion Request); provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

11

           Investments . All expenditures made and all liabilities incurred (contingently or otherwise, but without double-counting): (i) for the acquisition of stock, partnership or other equity interests or for the acquisition of Indebtedness of, or for loans, advances, capital contributions or transfers of property to, any Person; (ii) in connection with Real Estate Assets Under Development; and (iii) for the acquisition of any other obligations of any Person. In determining the aggregate amount of Investments outstanding at any particular time: (a) there shall be deducted in respect of each such Investment any amount received as a return of capital (but only by repurchase, redemption, retirement, repayment, liquidating dividend or liquidating distribution); (b) there shall not be deducted in respect of any Investment any amounts received as earnings on such Investment, whether as dividends, interest or otherwise; and (c) there shall not be deducted from the aggregate amount of Investments any decrease in the value thereof.

           Land . An undeveloped Real Estate Asset owned in fee by the Borrower.

           Leases . Leases, licenses and agreements whether written or oral, relating to the use or occupation of space in or on the Buildings or on the Project by persons other than the Borrower or any other member of the Whitestone Group.

           Lenders . Collectively, KeyBank and each other lending institution which may become a party to this Agreement, and any other Person who becomes an assignee of any rights of a Lender pursuant to §20 or a Person who acquires all or substantially all of the stock or assets of a Lender.

           Libor Business Day . Any day on which commercial banks are open for international business (including dealings in Dollar deposits) in London, England.

           Libor Breakage Costs . With respect to any Libor Rate Loan to be prepaid prior to the end of the applicable Interest Period or not borrowed, converted or continued (“drawn” and, with correlative meaning, “draw”) after elected, a prepayment “breakage” fee in an amount required to compensate the Lenders for any and all additional losses, costs or expenses that such Lenders incur as a result of such prepayment or failure to borrow, convert or continue a Libor Rate Loan, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits of other funds acquired by any Lender to fund or maintain such Libor Rate Loan.

           Libor Rate . For any LIBOR Rate Loan for any Interest Period, the average rate (rounded upwards to the nearest 1/16th) as shown in Dow Jones Markets (formerly Telerate) (Page 3750) at which deposits in U.S. dollars are offered by first class banks in the London Interbank Market at approximately 11:00 a.m. (London time) on the day that is one (1) LIBOR Business Day prior to the first day of such Interest Period with a maturity approximately equal to such Interest Period and in an amount approximately equal to the amount to which such Interest Period relates, adjusted for reserves and taxes if required by future regulations. If Dow Jones Markets no longer reports such rate or

12

Agent determines in good faith that the rate so reported no longer accurately reflects the rate available to Agent in the London Interbank Market, Agent may select a replacement index. For any period during which a Reserve Percentage shall apply, the LIBOR Rate with respect to LIBOR Rate Loans shall be equal to the amount determined above divided by an amount equal to 1 minus the Reserve Percentage.

           Libor Rate Loan(s) . Loans bearing interest calculated by reference to the Libor Rate.

           Lien . See §9.2.

           Loan . All or any portion of the Term Loan, as the context may require.

           Loan Documents . Collectively, this Agreement, the Guaranty, the Notes, the Deed of Trust, the Environmental Indemnity Agreement and any and all other agreements, instruments, documents or certificates now or hereafter evidencing or otherwise relating to the Term Loan and executed and delivered by or on behalf of the Borrower or the Trust or its Subsidiaries in connection with or in any way relating to the Term Loan or the transactions contemplated by this Agreement, and all schedules, exhibits and annexes hereto or thereto, as any of the same may from time to time be amended and in effect.

           M&M Liens . Mechanic’s and materialmen’s liens.

           Majority Lenders . As of any date, any two or more Lenders whose aggregate outstanding Term Loans constitute more than fifty percent (50%) of the total aggregate outstanding principal amount of the Term Loan on such date.

           Maturity Date . July __, 2009, as such date may be extended pursuant to §2.7, or such earlier date on which the Term Loan shall become due and payable pursuant to the terms hereof.

           Mortgage Note(s) . A mortgage note, in which the Borrower holds a direct interest as payee, for real estate that is developed, so long as at the relevant date of determination, such Mortgage Note is not in default.

           Multiemployer Plan . Any multiemployer plan within the meaning of §3(37) of ERISA maintained or contributed to by the Borrower or the Trust, as the case may be, or any ERISA Affiliate.

           Net Operating Income . For any period, an amount equal to (i) the aggregate rental and other income from the operation of the applicable Real Estate Assets during such period; minus (ii) all expenses and other proper charges incurred in connection with the operation of such Real Estate Assets (including, without limitation, real estate taxes, management fees, payments under ground leases and bad debt expenses) during such

13

period; but, in any case, before payment of or provision for debt service charges for such period, income taxes for such period, capital expenses for such period, and depreciation, amortization, and other non-cash expenses for such period, all as determined in accordance with GAAP ( provided that, except for purposes of calculating the covenants set forth in §§10.1 and 10.4, any rent leveling adjustments shall be excluded from rental income).

           Note Record . A Record with respect to any Note.

           Notes . The Term Notes.

           Obligations . All indebtedness, obligations and liabilities of the Borrower to any of the Lenders or the Agent, individually or collectively (but without double-counting), under this Agreement and each of the other Loan Documents and in respect of the Term Loan and the Notes and other instruments at any time evidencing any thereof, whether existing on the date of this Agreement or arising or incurred hereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, and including any indebtedness, obligations and liabilities of the Borrower under any Protected Interest Rate Agreement entered into with any Lender in connection with the Term Loan.

           Organizational Documents . Collectively, (i) the Agreement of Limited Partnership of the Borrower, (ii) the Certificate of Limited Partnership of the Borrower, (iii) the Amended and Restated Declaration of Trust of the Trust, (iv) the Amended and Restated By-Laws of the Trust, (v) the Certificate of Formation of Pima Norte, (vi) the Operating Agreement of Pima Norte and (vii) all of the other agreements, certificates or other documents relating to the formation, organization or governance of the Borrower or Trust, in each case as any of the foregoing may be amended in accordance with §8.20.

           Partially-Owned Entity(ies) . Any of the partnerships, associations, corporations, limited liability companies, trusts, joint ventures or other business entities or Persons in which the Borrower or the Trust, directly, or indirectly through its full or partial ownership of another entity, own an equity interest, but which is not required in accordance with GAAP to be consolidated with the Borrower or the Trust for financial reporting purposes.

           Patriot Act . Title III of Public Law 107-56 of the United States of America, United and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act) Act of 2001.

           PBGC . The Pension Benefit Guaranty Corporation created by §4002 of ERISA and any successor entity or entities having similar responsibilities.

           Permits . All governmental permits, licenses, and approvals necessary for the lawful operation and maintenance of the Real Estate Assets.

14

           Permitted Exceptions . Those matters listed on Exhibit E-1 hereto to which title to the Project may be subject on the Closing Date and thereafter such other title exceptions as the Agent may reasonably approve in writing.

           Permitted Liens . Liens permitted by §9.2.

           Permitted Property . A property which is a retail, office or mixed office/warehouse property.

           Person . Any individual, corporation, general partnership, limited partnership, trust, limited liability company, limited liability partnership, unincorporated association, business, or other legal entity, and any government (or any governmental agency or political subdivision thereof).

           Preferred Equity . Any preferred stock, preferred partnership interests, preferred member interests or other preferred equity interests issued by the Borrower, the Trust or any of their respective Subsidiaries.

           Project . The collective reference to (i) the Property, (ii) all rights, privileges, easements and hereditaments relating or appertaining thereto, and (iii) all personal property, fixtures and equipment required or beneficial for the operation thereof.

           Property . Approximately 33,405 square feet in the Pima Norte Office Condominium Project located at 36600 North Pima Road in the town of Carefree, County of Maricopa, State of Arizona.

           Protected Interest Rate Agreement . An agreement which evidences any interest protection arrangements entered into by the Borrower and any Lender in connection with the Term Loan, and all extensions, renewals, modifications, amendments, substitutions and replacements thereof.

           Rate Period . The period beginning on the first day of any fiscal month following delivery to the Agent of the annual or quarterly financial statements required to be delivered pursuant to §8.4(a) or §8.4(b) and ending on the last day of the fiscal month in which the next such annual or quarterly financial statements are delivered to the Agent.

           RCRA . See §7.18.

           Real Estate Assets . The fixed and tangible properties consisting of Land and/or Buildings owned in fee simple by the Borrower or any of its Subsidiaries at the relevant time of reference thereto, including, without limitation, the Project.

           Real Estate Assets Under Development . Any Real Estate Assets (including raw land) for which the Borrower or any of its Subsidiaries is actively pursuing (or intends to

15

actively pursue) construction of one or more Buildings or other improvements and for which construction, if commenced, is proceeding to completion without undue delay from Permit denial, construction delays or otherwise, all pursuant to such Person’s ordinary course of business, provided that any such Real Estate Asset (or, if applicable, any Building comprising a portion of any such Real Estate Asset) will no longer be considered a Real Estate Asset Under Development when a certificate of occupancy has issued for such Real Estate Asset (or Building) or such Real Estate Asset (or Building) may otherwise be lawfully occupied for its intended use unless it becomes the subject of a redevelopment of any significant portion thereof.

           Record . The grid attached to any Note, or the continuation of such grid, or any other similar record, including computer records, maintained by any Lender with respect to its Term Loan.

           Recourse . With reference to any obligation or liability, any liability or obligation that is not Without Recourse to the obligor thereunder, directly or indirectly. For purposes hereof, a Person shall not be deemed to be “indirectly” liable for the liabilities or obligations of an obligor solely by reason of the fact that such Person has an ownership interest in such obligor, provided that such Person is not otherwise legally liable, directly or indirectly, for such obligor’s liabilities or obligations (e.g., without limitation, by reason of a guaranty or contribution obligation, by operation of law or by reason of such Person being a general partner of such obligor).

           REIT . A “real estate investment trust”, as such term is defined in Section 856 of the Code.

           Release . See §7.18(c)(iii).

           Revolving Credit Agreement . That certain Revolving Credit Agreement, dated as of March 11, 2005, by Whitestone OP and certain of its Subsidiaries, KeyBank National Association, individually and as administrative agent, and certain other parties, as amended, amended and restated, or supplemented from time to time.

           Reserve Percentage . The maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves) which is imposed on member banks of the Federal Reserve System against “ Euro-currency Liabilities ” as defined in Regulation D.

           SARA . See §7.18.

           SEC . The Securities and Exchange Commission, or any successor thereto.

           SEC Filings . Collectively, (i) each Form 10-K, 10-Q and Form 8-K filed by the Trust with the SEC from time to time and (ii) each of the other public forms and reports filed by the Trust with the SEC from time to time.

16

           Subsidiary . Any corporation, association, partnership, limited liability company, trust, joint venture or other business entity or Person which is required to be consolidated with the Borrower or the Trust in accordance with GAAP.

           Term Loan . The term loan made by the Lenders to the Borrower pursuant to §2.

           Term Notes . Collectively, the separate promissory notes of the Borrower in favor of each Lender in substantially the form of Exhibit A hereto, in an aggregate principal amount equal to $6,400,000, dated as of the date hereof or as of such later date as any Person becomes a Lender under this Agreement, and completed with appropriate insertions, as each of such notes may be amended, replaced, substituted and/or restated from time to time.

           Title Insurer : Chicago Title Company, or such other title insurance company licensed in the State of Arizona as may be approved in writing by the Agent.

           Title Policy . See §12.5.

           Trust . See preamble.

           Type . As to any portion of the Term Loan, its nature as a Base Rate Loan or a Libor Rate Loan.

           Unanimous Lender Approval . The written consent of each Lender that is a party to this Agreement at the time of reference.

           Unencumbered Asset . Any Real Estate Asset that on any date of determination is not subject to any Liens (except for Permitted Liens).

           Unsecured Consolidated Total Indebtedness . As of any date of determination, the aggregate principal amount of Consolidated Total Indebtedness outstanding at such date (including all Obligations), that is not secured by a lien evidenced by a mortgage, deed of trust, negative pledge, assignment of partnership interests or other security interest.

           Whitestone Group . Collectively, (i) Whitestone OP, (ii) Pima Norte, (iii) Whitestone III, (iv) Whitestone III LP LTD, (v) Whitestone III GP LLC, (vi) the Trust, (vii) the respective Subsidiaries of the Borrower, Whitestone III and the Trust and (viii) the Partially-Owned Entities.

           Wholly-owned Subsidiary . Any single purpose entity that is a Subsidiary of the Borrower and of which the Borrower at all times owns directly or indirectly (through a Subsidiary or Subsidiaries) 100% of the outstanding voting or controlling interests and of the economic interests.

17

           “ Without Recourse ” or “ without recourse ”. With reference to any obligation or liability, any obligation or liability for which the obligor thereunder is not liable or obligated other than as to its interest in a designated Real Estate Asset or other specifically identified asset only, subject to such limited exceptions to the non-recourse nature of such obligation or liability, such as fraud, misappropriation and misapplication indemnities, as are usual and customary in like transactions involving institutional lenders at the time of the incurrence of such obligation or liability, and to usual and customary environmental indemnification obligations in connection with such designated Real Estate Asset.

          §1.2. Rules of Interpretation .

18

           §2. THE TERM LOAN .

          §2.1 Commitment to Lend . Subject to the provisions of §2.4 and the other terms and conditions set forth in this Agreement, each of the Lenders severally agrees to lend to the Borrower on the Closing Date, and the Borrower agrees to borrow on such date and repay in accordance with §3, an amount equal to $6,400,000, provided , that at the time the Borrower requests the Term Loan and after giving effect to the making thereof, (i) all of the conditions in §12 and §13 have been met at the time of such request, and (ii) there has not occurred and is not continuing (or will not occur by reason thereof) any Default or Event of Default.

          The Term Loan shall be made pro rata in accordance with each Lender’s Commitment Percentage. The request for the Term Loan made pursuant to §2.4 shall constitute a representation and warranty by the Borrower that the conditions set forth in §12 and §13 have been satisfied as of the Closing Date, provided that the making of such representation and warranty by the Borrower shall not limit the right of any Lender not to lend if such conditions have not been met. No portion of the Term Loan shall be required to be made by any Lender unless all of the conditions contained in §12 and §13 have been satisfied as of the Closing Date.

          §2.2. The Term Notes . The Term Loan shall be evidenced by the Term Notes. A Term Note shall be payable to the order of each Lender in an aggregate principal amount equal to such Lender’s Commitment. The Borrower irrevocably authorizes each Lender to make or cause to be made, on the Closing Date and at the time of receipt of any payment of principal on such Lender’s Term Note, an appropriate notation on such Lender’s applicable Note Record reflecting the making of such Loan or (as the case may be) the receipt of such payment. The outstanding amount of the Loan set forth on such applicable Note Record shall be prima facie evidence of the principal amount of the Term Loan owing and unpaid to such Lender, but the failure to record, or any error in so recording, any such amount on such Note Record shall not limit or otherwise affect the rights and obligations of the Borrower hereunder or under any Term Note to make payments of principal of or interest on any Term Note when due.

          §2.3. Interest on Term Loan; Fees .

                    (a) Each Base Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the last day of the Interest Period with respect thereto (unless earlier paid in accordance with §3.2) at a rate equal to the Base Rate.

                    (b) Each Libor Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the last day of the Interest Period with respect thereto (unless earlier paid in accordance with §3.2) at a rate equal to the Libor Rate determined for such Interest Period plus the Applicable Libor Margin.

19

                    (c) Reserved.

                    (d) The Borrower unconditionally promises to pay interest on the Term Loan in arrears on each Interest Payment Date with respect thereto, and when the principal of such Term Loan is due (whether at maturity, by reason of acceleration or otherwise).

          §2.4. Request for the Term Loan .

          The following provisions shall apply to the request by the Borrower for the Term Loan:

                    (a) The Borrower shall submit a Completed Loan Request to the Agent, together with a duplicate copy of such Completed Loan Request for each Lender which is then a party to this Agreement at the time such loan request is made. The Completed Loan Request shall be irrevocable and binding on the Borrower and shall obligate the Borrower to accept the Term Loan requested from the Lenders on the Closing Date.

                    (b) The Completed Loan Request shall include a completed certificate in the form of Exhibit B hereto specifying: (1) the principal amount of the Term Loan requested, (2) the Interest Period applicable to the Term Loan, and (3) the Type of Loan being requested, and certifying that, both before and after giving effect to the making of the Term Loan, no Default or Event of Default exists or will exist under this Agreement or any other Loan Document.

                    (c) No Lender shall be obligated to fund the Term Loan unless:

                    (d) The Agent will promptly notify each Lender of the Completed Loan Request and will cause a copy thereof to be delivered to each Lender on the Closing Date.

          §2.5. Conversion Options .

                    (a) The Borrower may elect from time to time to convert any portion of the outstanding Term Loan to a Loan of another Type, provided that (i) subject to the further proviso at the end of this §2.5(a) and subject to §2.5(b) and §2.5(d), with respect to any conversion of a Base Rate Loan to a Libor Rate Loan (or a continuation of a Libor Rate Loan, as provided in §2.5(b)), the Borrower shall give the Agent (with copies to the

20

Agent for each Lender) at least three (3) Business Days’ prior written notice of such election, which such notice must be received by the Agent by 10:00 a.m. on any Business Day; and (ii) no Loan may be converted into a Libor Rate Loan when any Default or Event of Default has occurred and is continuing. All or any part of outstanding Term Loan of any Type may be converted as provided herein, provided that each Conversion Request relating to the conversion of a Base Rate Loan to a Libor Rate Loan shall be for an amount equal to $1,000,000 or an integral multiple of $100,000 in excess thereof and shall be irrevocable by the Borrower.

                    (b) Any portion of the Term Loan of any Type may be continued as such upon the expiration of the Interest Period with respect thereto (i) in the case of Base Rate Loans, automatically and (ii) in the case of Libor Rate Loans by compliance by the Borrower with the notice provisions contained in §2.5(a)(i); provided that no Libor Rate Loan may be continued as such when any Default or Event of Default has occurred and is continuing but shall be automatically converted to a Base Rate Loan on the last day of the first Interest Period relating thereto ending during the continuance of any Default or Event of Default. The Borrower shall notify the Agent promptly when any such automatic conversion contemplated by this §2.5(b) is scheduled to occur.

                    (c) In the event that the Borrower does not notify the Agent of its election hereunder with respect to any portion of the Term Loan in accordance with the terms hereof, such Loan shall be automatically converted to a Base Rate Loan at the end of the applicable Interest Period.

                    (d) The Borrower may not request or elect a Libor Rate Loan pursuant to §2.4, elect to convert a Base Rate Loan to a Libor Rate Loan pursuant to §2.5(a) or elect to continue a Libor Rate Loan pursuant to §2.5(b) if, after giving effect thereto, there would be greater than six (6) Libor Rate Loans then outstanding. Any Conversion Request for a Libor Rate Loan that would create greater than six (6) Libor Rate Loans outstanding shall be deemed to be a Conversion Request for a Base Rate Loan. By way of explanation of the foregoing, in the event that the Borrower wishes to convert or continue two or more Loans into one Libor Rate Loan on the same day and for identical Interest Periods, such Libor Rate Loan shall constitute one single Libor Rate Loan for purposes of this clause (d).

          §2.6. Funds for the Term Loan .

                    (a) Subject to the other provisions of this §2, on the Closing Date, each of the Lenders will make available to the Agent, at the Agent’s Head Office, in immediately available funds, the amount of such Lender’s Commitment Percentage of the Term Loan. Upon receipt from each Lender of such amount, the Agent will make available to the Borrower the aggregate amount of such Term Loan made available to the Agent by the Lenders. The failure or refusal of any Lender to make available to the Agent at the aforesaid time and place on the Closing Date the amount of its Commitment Percentage of the Term Loan shall not relieve any other Lender from its several obligation

21

hereunder to make available to the Agent the amount of its Commitment Percentage of any Term Loan but in no event shall the Agent (in its capacity as Agent) have any obligation to make any funding or shall any Lender be obligated to fund more than its Commitment Percentage of the Term Loan or to increase its Commitment Percentage on account of such failure or otherwise.

                    (b) The Agent may, unless notified to the contrary by any Lender prior to the Closing Date, assume that such Lender has made available to the Agent on the Closing Date the amount of such Lender’s Commitment Percentage of the Term Loan, and the Agent may (but it shall not be required to), in reliance upon such assumption, make available to the Borrower a corresponding amount. If any Lender makes available to the Agent such amount after the Closing Date, such Lender shall pay to the Agent on demand an amount equal to the product of (i) the average, computed for the period referred to in clause (iii) below, of the weighted average interest rate paid by the Agent for federal funds acquired by the Agent during each day included in such period, multiplied by (ii) the amount of such Lender’s Commitment Percentage of the Term Loan, multiplied by (iii) a fraction, the numerator of which is the number of days that elapsed from and including the Closing Date to the date on which the amount of such Lender’s Commitment Percentage of the Term Loan shall become immediately available to the Agent, and the denominator of which is 365. A statement of the Agent submitted to such Lender with respect to any amounts owing under this paragraph shall be prima facie evidence of the amount due and owing to the Agent by such Lender.

          §2.7. Extension of Maturity Date . At least forty-five (45) days but in no event more than ninety (90) days prior to July __, 2009, the Borrower, by written notice to the Agent (with copies for each Lender), may request an extension of the Maturity Date by a period of six (6) months from the Maturity Date then in effect (the “Extension”). The Extension shall become effective on July __, 2009 so long as (i) the Borrower has paid to the Agent on such date, for the ratable accounts of the Lenders, an extension fee in an amount equal to 12.5 basis points on the Term Loan in effect on such date (“Extension Fee”), (ii) no Default or Event of Default has occurred and is continuing on such date and all representations and warranties contained in the Loan Documents shall be true and correct as of such date (except to the extent that such representations and warranties relate expressly to an earlier date), (iii) the Borrower shall be in compliance with all Financial Covenants on such date and (iv) the Borrower shall have completed all necessary build-out with respect to the Project in a manner satisfactory to the Agent. The notice referred to in the first sentence of this §2.7 shall constitute and shall be deemed to be a certification by the Borrower as to the truth and accuracy of the statements contained in clauses (ii) and (iii) of the preceding sentence.

          §3. REPAYMENT OF THE TERM LOAN .

          §3.1. Maturity . The Borrower promises to pay on the Maturity Date, and there shall become absolutely due and payable on the Maturity Date, all unpaid principal of the Term Loan outstanding on such date, together with any and all accrued and unpaid

22

interest thereon and any and all other unpaid amounts due under this Agreement, the Notes or any other of the Loan Documents.

          §3.2. Optional Repayments of the Term Loan . The Borrower shall have the right, at its election, to prepay the outstanding amount of the Term Loan, in whole or in part, at any time without penalty or premium; provided that the outstanding amount of any Libor Rate Loans may not be prepaid on a date other than the last day of an Interest Period unless the Borrower pays the Libor Breakage Costs for each Libor Rate Loan so prepaid at the time of such prepayment. The Borrower shall give the Agent (with copies to the Agent for each Lender), no later than 10:00 a.m., Cleveland, Ohio time, at least two (2) Business Days’ prior written notice of any prepayment pursuant to this §3.2 of any Base Rate Loans, and at least four (4) Business Days’ notice of any proposed prepayment pursuant to this §3.2 of Libor Rate Loans, specifying the proposed date of prepayment and the principal amount to be prepaid. Each such partial prepayment of the Term Loan shall be in an amount equal to $1,000,000 or an integral multiple of $1,000,000 in excess thereof or, if less, the outstanding balance of the Term Loan then being repaid, shall be accompanied by the payment of all charges, if any, outstanding on the Term Loan so prepaid and of all accrued interest on the principal prepaid to the date of payment, and shall be applied, in the absence of instruction by the Borrower, first to the principal of Base Rate Loans and then to the principal of Libor Rate Loans.

          §4. CERTAIN GENERAL PROVISIONS .

          §4.1. Funds for Payments .

                    (a) All payments of principal, interest, fees, and any other amounts due hereunder or under any of the other Loan Documents shall be made to the Agent, for the respective accounts of the Lenders or (as the case may be) the Agent, at the Agent’s Head Office, in each case in Dollars and in immediately available funds. The Borrower shall make each payment of principal of and interest on the Term Loan and of fees hereunder or thereunder not later than 12:00 p.m. (Cleveland, Ohio time) on the due date thereof.

                    (b) All payments by the Borrower hereunder and under any of the other Loan Documents shall be made without setoff or counterclaim and free and clear of and without deduction for any taxes, levies, imposts, duties, charges, fees, deductions, withholdings, compulsory liens, restrictions or conditions of any nature now or hereafter imposed or levied by any jurisdiction or any political subdivision thereof or taxing or other authority therein unless the Borrower is compelled by law to make such deduction or withholding. If the Borrower is compelled by law to make any such deduction or withholding with respect to any amount payable by it hereunder or under any of the other Loan Documents (except with respect to taxes on the income or profits of the Agent or any Lender), the Borrower shall pay to the Agent, for the account of the Lenders or (as the case may be) the Agent, on the date on which such amount is due and payable hereunder or under such other Loan Document, such additional amount in Dollars as shall be necessary to enable the Lenders to receive the same net amount which the Lenders would

23

have received on such due date had no such deduction or withholding obligation been imposed upon the Borrower. The Borrower will deliver promptly to the Agent (with copies to the Agent for each Lender) certificates or other valid vouchers for all taxes or other charges deducted from or paid with respect to payments made by the Borrower hereunder or under such other Loan Document.

          §4.2. Computations . All computations of interest on the Term Loan and of fees to the extent applicable shall be based on a 360-day year, in each case paid for the actual number of days elapsed. Except as otherwise provided in the definition of the term “Interest Period” with respect to Libor Rate Loans, whenever a payment hereunder or under any of the other Loan Documents becomes due on a day that is not a Business Day, the due date for such payment shall be extended to the next succeeding Business Day, and interest shall accrue during such extension. The outstanding amount of the Loans as reflected on the Note Records or record attached to any other Note from time to time shall constitute prima facie evidence of the principal amount thereof.

          §4.3. Inability to Determine Libor Rate . In the event, prior to the commencement of any Interest Period relating to any Libor Rate Loan, the Agent shall determine that adequate and reasonable methods do not exist for ascertaining the Libor Rate that would otherwise determine the rate of interest to be applicable to any Libor Rate Loan during any Interest Period, the Agent shall forthwith give notice of such determination (which shall be conclusive and binding on the Borrower) to the Borrower and the Lenders. In such event (a) each Libor Rate Loan will automatically, on the last day of the then current Interest Period applicable thereto, become a Base Rate Loan, and (b) the obligations of the Lenders to make Libor Rate Loans shall be suspended, in each case unless and until the Agent determines that the circumstances giving rise to such suspension no longer exist, whereupon the Agent shall so notify the Borrower and the Lenders.

          §4.4. Illegality . Notwithstanding any other provisions herein, if any present or future law, regulation, treaty or directive or in the interpretation or application thereof shall make it unlawful for any Lender to make or maintain Libor Rate Loans, such Lender shall forthwith give notice of such circumstances to the Agent and the Borrower and thereupon (a) the Commitment of such Lender to make Libor Rate Loans or convert Base Rate Loans to Libor Rate Loans shall forthwith be suspended and (b) such Lender’s Commitment Percentage of Libor Rate Loans then outstanding shall be converted automatically to Base Rate Loans on the last day of each Interest Period applicable to such Libor Rate Loans or within such earlier period as may be required by law, all until such time as it is no longer unlawful for such Lender to make or maintain Libor Rate Loans. The Borrower hereby agrees promptly to pay the Agent for the account of such Lender, upon demand, any additional amounts necessary to compensate such Lender for Libor Breakage Costs incurred by such Lender in making any conversion required by this §4.4 prior to the last day of an Interest Period.

24

          §4.5. Additional Costs, Etc . If any present or future applicable law, which expression, as used herein, includes statutes, rules and regulations thereunder and interpretations thereof by any competent court or by any governmental or other regulatory body or official charged with the administration or the interpretation thereof and requests, directives, instructions and notices at any time or from time to time hereafter made upon or otherwise issued to any Lender or the Agent by any central bank or other fiscal, monetary or other authority (whether or not having the force of law, but if not having the force of law, then generally applied by the Lenders or the Agent with respect to similar loans), shall:

                    (a) subject any Lender or the Agent to any tax, levy, impost, duty, charge, fee, deduction or withholding of any nature with respect to this Agreement, the other Loan Documents, such Lender’s Commitment or the Term Loan (other than taxes based upon or measured by the income or profits of such Lender or the Agent), or

                    (b) change the basis of taxation (except for changes in taxes on income or profits) of payments to any Lender of the principal of or the interest on the Term Loan or any other amounts payable to the Agent or any Lender under this Agreement or the other Loan Documents, or

                    (c) impose or increase or render applicable (other than to the extent specifically provided for elsewhere in this Agreement) any special deposit, reserve, assessment, liquidity, capital adequacy or other similar requirements (whether or not having the force of law) against assets held by, or deposits in or for the account of, or loans by, or letters of credit issued by, or commitments of an office of any Lender, or

                    (d) impose on any Lender or the Agent any other conditions or requirements with respect to this Agreement, the other Loan Documents, the Term Loan, such Lender’s Commitment, or any class of loans or commitments of which any portion of the Term Loan or such Lender’s Commitment forms a part;

and the result of any of the foregoing is

25

then, and in each such case, the Borrower will, upon demand made by the Agent or such Lender (such demand to be made promptly by the Agent or such Lender upon the making of any such determination), at any time and from time to time and as often as the occasion therefor may arise, pay to such Lender or the Agent such additional amounts as such Lender or the Agent shall determine in good faith to be sufficient to compensate such Lender or the Agent for such additional cost, reduction, payment or foregone interest or other sum, provided that such Lender or the Agent is generally imposing similar charges on its other similarly situated borrowers. The Agent shall provide the Borrower with a calculation, in reasonable detail, of such amounts in accordance with its customary practices.

           §4.6. Capital Adequacy . If any future law, governmental rule, regulation, policy, guideline or directive (whether or not having the force of law, but if not having the force of law, then generally applied by the Lenders with respect to similar loans) or the interpretation thereof by a court or governmental authority with appropriate jurisdiction affects the amount of capital required or expected to be maintained by banks or bank holding companies and any Lender or the Agent determines that the amount of capital required to be maintained by it is increased by or based upon the existence of the Term Loan made pursuant hereto, then such Lender or the Agent may notify the Borrower of such fact, and the Borrower shall pay to such Lender or the Agent from time to time, upon demand made by the Agent or such Lender (such demand to be made promptly by the Agent or such Lender upon the making of any such determination), as an additional fee payable hereunder, such amount as such Lender or the Agent shall determine reasonably and in good faith and certify in a notice to the Borrower to be an amount that will adequately compensate such Lender in light of these circumstances for its increased costs of maintaining such capital. Each Lender and the Agent shall allocate such cost increases among its customers in good faith and on an equitable basis, and will not charge the Borrower unless it is generally imposing a similar charge on its other similarly situated borrowers. The Agent shall provide the Borrower with a calculation, in reasonable detail, of such amounts in accordance with its customary practices.

          §4.7. Certificate; Limitations . A certificate setting forth any additional amounts payable pursuant to §§4.5 or 4.6 and a brief explanation of such amounts which are due, submitted by any Lender or the Agent to the Borrower, shall be prima facie evidence that such amounts are due and owing. Notwithstanding anything to the contrary contained in this Article 5, to the extent reasonably possible, each Lender shall designate an alternate lending office in the continental United States to make the Loans in order to reduce any liability of Borrower to such Lender under §§4.4, 4.5 or 4.6 or to avoid the unavailability of a Libor Rate Loan, so long as such designation is not disadvantageous to such Lender.

          §4.8. Indemnity . In addition to the other provisions of this Agreement regarding such matters, the Borrower agrees to indemnify the Agent and each Lender and to hold

26

the Agent and each Lender harmless from and against any loss, cost or expense (including loss of anticipated profits) that the Agent or such Lender may sustain or incur as a consequence of (a) a default by the Borrower in the payment of any principal amount of or any interest on any Libor Rate Loans as and when due and payable, including any such loss or expense arising from interest or fees payable by the Agent or such Lender to lenders of funds obtained by it in order to maintain its Libor Rate Loans, (b) the failure by the Borrower to make a borrowing or conversion after the Borrower has given a Completed Loan Request for a Libor Rate Loan or a Conversion Request for a Libor Rate Loan, and (c) the making of any payment of a Libor Rate Loan or the making of any conversion of any such Loan to a Base Rate Loan on a day that is not the last day of the applicable Interest Period with respect thereto, including interest or fees payable by the Agent or a Lender to lenders of funds obtained by it in order to maintain any such Libor Rate Loans.

          §4.9. Interest on Overdue Amounts; Late Charge . Notwithstanding anything to the contrary stated herein, upon the occurrence and during the continuance of an Event of Default, at the option of the Majority Lenders, to the extent permitted by applicable law, the unpaid balance of all Obligations shall bear interest at the rate otherwise applicable thereto plus 2%, compounded daily until such Event of Default is cured or waived to the satisfaction of the Agent and the required Lenders. In addition, the Borrower shall pay a late charge equal to five percent (5%) of any amount of interest charges on the Term Loan which is not paid within ten (10) days of the date when due.

          §5. RESERVED .

          §6. RECOURSE OBLIGATIONS . The Obligations are full recourse obligations of the Borrower, and all of the respective assets and properties of the Borrower shall be available for the payment in full in cash and performance of the Obligations. The obligations of the Trust under the Guaranty are full recourse obligations of the Trust, and all of the respective assets and properties of the Trust shall be available for the payment in full in cash and performance thereof.

          §7. REPRESENTATIONS AND WARRANTIES . The Borrower and the Trust, on their own behalf and on behalf of their respective Subsidiaries, jointly and severally represent and warrant to the Agent and the Lenders all of the statements contained in this §7.

          §7.1. Authority, Etc .

                    (a) Organization: Good Standing .

27

                    (b) Capitalization . The outstanding equity of Whitestone OP is comprised of a general partner interest and limited partner interests, all of which have been duly issued and are outstanding and fully paid and non-assessable. All of the issued and outstanding general partner interests of Whitestone OP are owned and held of record by the Trust. As of the Closing Date, all of the issued and outstanding limited partner interests of Whitestone OP are owned and held of record as set forth on Schedule 7.1(b) . There are no outstanding securities or agreements exchangeable for or convertible into or carrying any rights to acquire a general partner interest in Whitestone OP. There are no outstanding commitments, options, warrants, calls or other agreements (whether written or oral) binding on Whitestone OP or the Trust which require or could require Whitestone OP or the Trust to sell, grant, transfer, assign, mortgage, pledge or otherwise dispose of any general partner interest in Whitestone OP. No general partner interests of Whitestone OP is subject to any restrictions on transfer or any partner agreements, voting agreements, trust deeds, irrevocable proxies; or any other similar agreements or interests (whether written or oral). Whitestone OP owns, directly or indirectly, 100% (by number of votes or controlling interests) of the outstanding voting interests and of the economic interests in Pima Norte, Whitestone III, Whitestone III GP LLC and Whitestone III LP LTD and all

28

of such equity interests have been duly issued and are outstanding and fully paid and non-assessable. There are no outstanding securities or agreements exchangeable for or convertible into or carrying any rights to acquire any equity interests in any Borrower (other than Whitestone OP). There are no outstanding commitments, options, warrants, calls or other agreements (whether written or oral) binding on any Borrower (other than Whitestone OP) which require or could require any Borrower (other than Whitestone OP) to sell, grant, transfer, assign, mortgage, pledge or otherwise dispose of any equity interest in such Borrower. Except as set forth on Schedule 7.1(b) , no equity interests of the Borrower are subject to any restrictions on transfer or any partner agreements, voting agreements, trust deeds, irrevocable proxies or any other similar agreements or interests (whether written or oral). All of the Preferred Equity which exists as of the date of this Agreement, and each of the agreements or other documents entered into and/or setting forth the terms, rights and restrictions applicable to any such Preferred Equity, are listed and described on Schedule 7.1(b) attached hereto. All of the agreements and other documents relating to the Preferred Equity in effect on the Closing Date have been furnished to the Agent.

                    (c) Due Authorization . The execution, delivery and performance of this Agreement and the other Loan Documents to which the Borrower or the Trust is or is to become a party and the transactions contemplated hereby and thereby (i) are within the authority of the Borrower and the Trust, (ii) have been duly authorized by all necessary proceedings on the part of the Borrower or the Trust and any general partner or member thereof, (iii) do not conflict with or result in any breach or contravention of any provision of law, statute, rule or regulation to which the Borrower or the Trust is subject or any judgment, order, writ, injunction, license or permit applicable to the Borrower or the Trust, (iv) do not conflict with any provision of the Organizational Documents of the Borrower or the Trust or any general partner thereof, and (v) do not contravene any provisions of, or constitute Default or Event of Default hereunder or a failure to comply with any term, condition or provision of any other agreement, instrument, judgment, order, decree, permit, license or undertaking binding upon or applicable to the Borrower or the Trust or any of the Borrower’s or the Trust’s properties (except for any such failure to comply under any such other agreement, instrument, judgment, order, decree, permit, license, or undertaking as would not materially and adversely affect the business, operations, assets, condition (financial or otherwise) or properties of the Trust the Borrower) or result in the creation of any mortgage, pledge, security interest, lien, encumbrance or charge upon any of the properties or assets of the Borrower or the Trust.

                    (d) Enforceability . Each of the Loan Documents to which the Borrower or the Trust is a party has been duly executed and delivered and constitutes the legal, valid and binding obligations of the Borrower and the Trust, as the case may be, subject only to applicable bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights.

          §7.2. Governmental Approvals . The execution, delivery and performance by the Borrower and the Trust of this Agreement and the other Loan Documents to which the

29

Borrower or the Trust is or is to become a party and the transactions contemplated hereby and thereby do not require (i) the approval or consent of any governmental agency or authority other than those already obtained and delivered to the Agent, or (ii) filing with any governmental agency or authority, other than filings which will be made with the SEC when and as required by law or deemed appropriate by the Trust.

          §7.3. Title to Properties; Leases .

          The Borrower and the Trust each has good fee title to all of its respective properties, assets and rights of every name and nature purported to be owned by it, including, without limitation, that:

                    (a) Pima Norte holds good and clear record and marketable fee simple title to the Project and all assets or properties relating thereto, subject to no Liens other than Permitted Liens.

                    (b) The Borrower and the Trust will, as of the Closing Date, own all of the assets as reflected in the financial statements of the Borrower and the Trust described in §7.4, or acquired since the date of such financial statements (except property and assets sold or otherwise disposed of in the ordinary course of business since that date).

          §7.4. Financial Statements . The Borrower has furnished to each of the Lenders the audited Consolidated balance sheet of the Trust and its Subsidiaries as of December 31, 2006 (together with the unaudited Consolidated balance sheet of the Trust and its Subsidiaries as of September 30, 2007 and the related Consolidated Statements of Income, changes in shareholders’ equity and cash flows for the fiscal year or other period then ended, as applicable (collectively, the “Initial Financials”). Such Initial Financials have been prepared in accordance with GAAP and, in the case of the December 31, 2006 financial statements, accompanied by an auditors’ report prepared without qualification by the Accountants. The Initial Financials fairly present the financial condition of the Trust and its Subsidiaries as at the close of business on the date thereof and the results of operations for the fiscal year then ended. There are no contingent liabilities of the Trust or any of its Subsidiaries as of such date known to the officers of the Trust or any of its Subsidiaries not disclosed in the Initial Financials.

          §7.5 No Material Changes, Etc . Since the Financial Statement Date, there has occurred no materially adverse change in the business, operations, assets, condition (financial or otherwise) or properties of the Trust, the Borrower or the Project.

          §7.6. Franchises, Patents, Copyrights, Etc . The Borrower, the Trust and each of their respective Subsidiaries possess all franchises, patents, copyrights, trademarks, trade names, licenses and permits, and rights in respect of the foregoing, adequate for the conduct of their respective businesses substantially as now conducted without known conflict with any rights of others, except where the failure to so possess could not reasonably be expected to have a material adverse effect on the business, operations,

30

assets, condition (financial or otherwise) or properties of the Trust or the Borrower. The Borrower possesses all Permits relating to the Project.

          §7.7 Litigation . Except as disclosed on Schedule 7.7 , there are no actions, suits, proceedings or investigations of any kind pending or, to the Borrower’s or the Trust’s knowledge, threatened against the Borrower, the Trust or any of their respective Subsidiaries or the Project before any court, tribunal or administrative agency or board that, if adversely determined, could reasonably be expected to, either individually or in the aggregate, materially adversely affect the business, operations, assets, condition (financial or otherwise) or properties of the Trust or the Borrower, or materially impair the right of the Trust or the Borrower to carry on its businesses substantially as now conducted by it, or result in any substantial liability not fully covered by insurance, or for which adequate reserves are not maintained, as reflected in the applicable consolidated financial statements or SEC Filings of the Borrower and the Trust, or which question the validity of this Agreement or any of the other Loan Documents, or any action taken or to be taken pursuant hereto or thereto.

          §7.8. No Materially Adverse Contracts, Etc . Neither the Borrower, the Trust nor any of their respective Subsidiaries is subject to any charter, corporate, partnership, limited liability company or other legal restriction, or any judgment, decree, order, rule or regulation that has or could reasonably expected in the future to have a materially adverse effect on the business, operations, assets, condition (financial or otherwise) or properties of the Trust, the Borrower or the Project. None of the Borrower, the Trust or any of their respective Subsidiaries is a party to any contract or agreement that has had, or could reasonably be expected to have, any materially adverse effect on the business, operations, assets, condition (financial or otherwise) or properties of the Trust, the Borrower or the Project.

          §7.9. Compliance With Other Instruments, Laws, Etc . Neither the Borrower, the Trust nor any of their respective Subsidiaries is in violation of any provision of its partnership agreement, operating agreement, charter or other Organizational Document, as the case may be, or any agreement or instrument to which it may be subject or by which it or any of its properties may be bound or any decree, order, judgment, statute, license, rule or regulation, in any of the foregoing cases in a manner that could reasonably be expected to result, individually or in the aggregate, in the imposition of substantial penalties or materially and adversely affect the business, operations, assets, condition (financial or otherwise) or properties of the Trust, the Borrower or the Project. Without limitation of the foregoing, the Borrower is in compliance with, and neither the ent