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AMENDED AND RESTATED PROMISSORY NOTE SECURED BY MORTGAGE (100-200 Campus Drive ? Florham Park, NJ)

Mortgage Agreement

AMENDED AND RESTATED PROMISSORY NOTE SECURED BY MORTGAGE (100-200 Campus Drive ? Florham Park, NJ) | Document Parties: KBS REAL ESTATE INVESTMENT TRUST II, INC. | KBS LIMITED PARTNERSHIP | KBS REAL ESTATE INVESTMENT TRUST II, INC | KBS REIT PROPERTIES II, LLC | KBSII 100-200 CAMPUS DRIVE, LLC | KBSII REIT ACQUISITION I, LLC | WELLS FARGO BANK, NATIONAL ASSOCIATION You are currently viewing:
This Mortgage Agreement involves

KBS REAL ESTATE INVESTMENT TRUST II, INC. | KBS LIMITED PARTNERSHIP | KBS REAL ESTATE INVESTMENT TRUST II, INC | KBS REIT PROPERTIES II, LLC | KBSII 100-200 CAMPUS DRIVE, LLC | KBSII REIT ACQUISITION I, LLC | WELLS FARGO BANK, NATIONAL ASSOCIATION

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Title: AMENDED AND RESTATED PROMISSORY NOTE SECURED BY MORTGAGE (100-200 Campus Drive ? Florham Park, NJ)
Governing Law: California     Date: 3/27/2009

AMENDED AND RESTATED PROMISSORY NOTE SECURED BY MORTGAGE (100-200 Campus Drive ? Florham Park, NJ), Parties: kbs real estate investment trust ii  inc. , kbs limited partnership , kbs real estate investment trust ii  inc , kbs reit properties ii  llc , kbsii 100-200 campus drive  llc , kbsii reit acquisition i  llc , wells fargo bank  national association
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Exhibit 10.37

Loan No. 1000625

AMENDED AND RESTATED PROMISSORY NOTE SECURED BY MORTGAGE

(100-200 Campus Drive – Florham Park, NJ)

$89,800,000

 

Irvine, California

March 11, 2009

FOR VALUE RECEIVED, the undersigned KBSII 100-200 CAMPUS DRIVE, LLC, a Delaware limited liability company (“ Borrower ”) promise(s) to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“ Lender ”), at the Los Angeles Loan Center, 2120 East Park Place, Suite 100, El Segundo, California 90245, or at such other place as may be designated in writing by Lender, the principal sum of EIGHTY NINE MILLION EIGHT HUNDRED THOUSAND DOLLARS ($89,800,000) or so much thereof as may from time to time be owing hereunder by reason of advances by Lender to or for the benefit or account of Borrower, with interest thereon, per annum, at one or more of the Effective Rates calculated in accordance with the terms and provisions of the Fixed Rate Agreement attached hereto as Exhibit A and a Fixed Rate Notice described on Exhibit B attached hereto (based on a 360-day year and charged on the basis of actual days elapsed). All sums owing hereunder are payable in lawful money of the United States of America, in immediately available funds without offset, deduction or counterclaim of any kind.

Interest accrued on this Amended and Restated Promissory Note Secured by Mortgage (“Note”) shall be due and payable on the first Business Day (as defined in Exhibit A ) of each month commencing with the first month after the date of this Note.

The outstanding principal balance of this Note, together with all accrued and unpaid interest, shall be due and payable in full on June 9, 2009 (“ Maturity Date ”). Unless expressly defined herein, all capitalized terms used herein shall have the meanings ascribed to them in the Loan Agreement (as defined in Exhibit A ). Principal amounts outstanding hereunder, upon which repayment obligations exist and interest accrues, shall be determined by the records of Lender, which shall be deemed to be conclusive in the absence of clear and convincing evidence to the contrary presented by Borrower.

This Note is secured by, among other things, that certain Mortgage with Absolute Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of September 9, 2008 (as the same may be amended or modified, the “ Mortgage ”), executed by Borrower for the benefit of Lender.

In order to assure timely payment to Lender of accrued interest, principal, fees and late charges due and owing under the loan evidenced by this Note, Borrower hereby irrevocably authorizes Lender to directly debit Borrower’s demand deposit account with Lender, account no. 4121-770986, for payment when due of all such amounts payable to Lender. Borrower represents and warrants to Lender that Borrower is the legal owner of said account. Written confirmation of the amount and purpose of any such direct debit shall be given to Borrower by Lender not less frequently than monthly. In the event any direct debit hereunder is returned for insufficient funds, Borrower shall pay Lender upon demand, in immediately available funds, all amounts and expenses due and owing to Lender.

If any interest payment required hereunder is not received by Lender (whether by direct debit or otherwise) on or before the fifteenth (15th) calendar day of the month in which it becomes due, Borrower shall pay, at Lender’s option, a late or collection charge equal to four percent (4%) of the amount of such unpaid interest payment (“ Late Charge ”).

If: (a) Borrower shall fail to pay when due any sums payable hereunder, subject to any grace or cure period provided in the Loan Agreement; or (b) any other Event of Default occurs under the Loan Agreement, the Mortgage or any other Loan Document; or (c) the property which is subject to the Mortgage, or any portion thereof or interest therein, is sold, transferred, mortgaged, assigned, encumbered or leased, whether voluntarily or involuntarily or by operation of law or otherwise, other than as expressly permitted by Lender in writing; THEN Lender may, at its sole option, declare all sums owing under this Note immediately due and payable; provided , however , that if any document related to this Note provides for automatic acceleration of payment of sums owing hereunder, all sums owing hereunder shall be automatically due and payable in accordance with the terms of that document.

 

Page 1 of 11


Loan No. 1000625

If any attorney is engaged by Lender to enforce or defend any provision of this Note or the Mortgage, or as a consequence of any Event of Default, with or without the filing of any legal action or proceeding, then Borrower shall pay to Lender immediately upon demand all attorneys’ fees and all costs incurred by Lender in connection therewith, together with interest thereon from the date of such demand until paid at the rate of interest applicable to the principal balance owing hereunder as if such unpaid attorneys’ fees and costs had been added to the principal.

No previous waiver and no failure or delay by Lender in acting with respect to the terms of this Note or the Loan Agreement or any other Loan Document shall constitute a waiver of any breach, default, or failure of condition under this Note, the Loan Agreement or any other Loan Document. A waiver of any term of this Note, the Mortgage or of any of the obligations secured thereby must be made in writing and shall be limited to the express written terms of such waiver. In the event of any inconsistencies between the terms of this Note and the terms of any other document related to the loan evidenced by this Note, the terms of this Note shall prevail.

If this Note is executed by more than one person or entity as Borrower, the obligations of each such person or entity shall be joint and several. No person or entity shall be a mere accommodation maker, but each shall be primarily and directly liable hereunder. Except as otherwise provided in any agreement executed in connection with this Note, Borrower waives: presentment; demand; notice of dishonor; notice of default or delinquency; notice of acceleration; notice of protest and nonpayment; notice of costs, expenses or losses and interest thereon; notice of late charges; and diligence in taking any action to collect any sums owing under this Note or in proceeding against any of the rights or interests in or to properties securing payment of this Note.

Time is of the essence with respect to every provision hereof. This Note shall be construed and enforced in accordance with the laws of the State of California, except to the extent that federal laws preempt the laws of the State of California, and all persons and entities in any manner obligated under this Note consent to the jurisdiction of any federal or state court within the State of California having proper venue and also consent to service of process by any means authorized by California or federal law.

Borrower recognizes that its default in making any payment as provided herein or in any other Loan Document as agreed to be paid when due, or the occurrence of any other Event of Default hereunder or under any other Loan Document, will require Lender to incur additional expense in servicing and administering the Loan, in loss to Lender of the use of the money due and in frustration to Lender in meeting its other financial and loan commitments and that the damages caused thereby would be extremely difficult and impractical to ascertain. Borrower agrees (a) that an amount equal to the Late Charge plus the accrual of interest at the Alternate Rate (as defined in Exhibit A ) is a reasonable estimate of the damage to Lender in the event of a late payment, and (b) that the accrual of interest at the Alternate Rate following any Event of Default, other than that arising out of a late payment, plus any Fixed Rate Price Adjustment (as defined in Exhibit A ), is a reasonable estimate of the damage to Lender in the event of such other Event of Default, regardless of whether there has been an acceleration of the loan evidenced hereby. Nothing in this Note shall be construed as an obligation on the part of Lender to accept, at any time, less than the full amount then due hereunder, or as a waiver or limitation of Lender’s right to compel prompt performance.

All notices or other communications required or permitted to be given pursuant to this Note shall be given to the Borrower or Lender at the address and in the manner provided for in the Loan Agreement, except as otherwise provided herein.

The Loan Documents contain or expressly incorporate by reference the entire agreement of the parties with respect to the matters contemplated therein and supersede all prior negotiations or agreements, written or oral. The Loan Documents shall not be modified except by written instrument executed by all parties. Any reference to the Loan Documents includes any amendments, renewals or extensions now or hereafter approved by Lender in writing.

The limitations on personal liability of shareholders, partners and members of Borrower contained in Section 11.21 of the Loan Agreement shall apply to this Note.

 

Page 2 of 11


Loan No. 1000625

This Note renews, restates, amends, replaces and supercedes that certain Promissory Note Secured by Mortgage dated September 9, 2008 executed by Borrower and made payable to the order of Lender in the original principal amount of $89,800,000 (the “ Prior Note ”). It is the intention of Borrower and Lender that while this Note amends, restates, renews, replaces and supercedes the Prior Note, it is not in payment of the Prior Note, but rather is the substitution of one evidence of debt for another. This Note shall in no event be deemed to constitute a waiver, novation, release, discharge or other extinguishment of the indebtedness evidenced by the Prior Note, which continues in full force in effect, as amended and restated by the terms of this Note. The Prior Note is no longer separately negotiable since it has been replaced by this Note.

Exhibits A and B are attached hereto and incorporated herein by reference.

 

[Signature Follows on Next Page]

 

Page 3 of 11


Loan No. 1000625

IN WITNESS WHEREOF, the Borrower has executed this Note as of the date set forth above.

“BORROWER”

KBSII 100-200 CAMPUS DRIVE, LLC,

a Delaware limited liability company

 

By:      

 

KBSII REIT ACQUISITION I, LLC,

 

a Delaware limited liability company,

its sole member

 

By:      

 

KBS REIT PROPERTIES II, LLC,

 

 

a Delaware limited liability company,

its sole member

 

 

By:      

 

KBS LIMITED PARTNERSHIP II,

 

 

 

a Delaware limited partnership,

its sole member

 

 

 

By:      

 

KBS REAL ESTATE INVESTMENT TRUST II, INC.,

 

 

 

 

a Maryland corporation,

general partner

 

  

By:      

  

/s/Charles J. Schreiber, Jr.

  

  

  

 

  

  

  

Charles J. Schreiber, Jr.

  

  

  

Chief Executive Officer

  

 

Page 4 of 11


EXHIBIT A

Loan No. 1000625

FIXED RATE AGREEMENT

Exhibit A to an Amended and Restated Promissory Note Secured by Mortgage (“Note”), dated March 11, 2009, made by KBSII 100-200 CAMPUS DRIVE, LLC , a Delaware limited liability company, as Borrower, to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION , as Lender.

Borrower has requested and Lender has agreed to provide the option to fix the rate of interest for specified periods on specified portions of the outstanding principal balance as a basis for calculating the Effective Rate on such portions of the principal amounts owing under this Note. Borrower understands: (i) the process of exercising the fixed rate option as provided herein; (ii) that amounts owing under this Note may bear interest at different rates and for different time periods; and (iii) that absent the terms and conditions hereof, it would be extremely difficult to calculate Lender’s additional costs, expenses, and damages upon the occurrence of an Event of Default (as defined in the Loan Agreement) or prepayment by Borrower hereunder. Given the above, Borrower agrees that the provisions herein (including, without limitation, the Fixed Rate Price Adjustment defined below) provide for a reasonable and fair method for Lender to recover its additional costs, expenses and damages for an Event of Default or prepayment by Borrower.

 

1.

RATES AND TERMS DEFINED . Various rates and terms not otherwise defined herein are defined and described as follows:

Alternate Rate ” is a rate of interest per annum five percent (5%) in excess of the applicable Effective Rate.

Applicable LIBO Rate ” is the rate of interest, equal to the sum of: (a) three and one-half percent (3.50%)  plus (b) the LIBO Rate, which rate is divided by one (1.00) minus the Reserve Percentage:

 

Applicable LIBO Rate = 3.50%

 

  +  

 

LIBO Rate

  

 

 

(1 - Reserve Percentage)

  

Business Day ” is a day of the week (but not a Saturday, Sunday or holiday) on which the offices of Lender are open to the public for carrying on substantially all of Lender’s business functions.

Effective Rate ” is the rate of interest calculated in accordance with Section 2 herein.

Federal Funds Rate ” is, for any period, a fluctuating interest rate per annum equal for each day during such period 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 which is a Business Day, the average of the quotations for such day on such transactions received by Lender from three (3) Federal Funds brokers of recognized standing selected by Lender.

Fixed Rate ” is the Applicable LIBO Rate as accepted by Borrower as an Effective Rate for a particular Fixed Rate Period and Fixed Rate Portion.

Fixed Rate Commencement Date ” means the date upon which the Fixed Rate Period commences.

Fixed Rate Notice ” is a written notice in the form shown on Exhibit B attached to this Note which requests a Fixed Rate for a particular Fixed Rate Period and Fixed Rate Portion.

Fixed Rate Period ” is the period or periods of (a) one (1), three (3) or six (6) months; or (b) any other shorter period which ends at the Maturity Date, which periods are selected by Borrower and confirmed in the Fixed Rate Notice; provided that no Fixed Rate Period shall extend beyond the Maturity Date and any Fixed Rate Notice electing a Fixed Rate Period that would extend beyond the Maturity Date shall be deemed to be a nullity and of no force or effect.

 

Page 5 of 11


 
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