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COLLATERAL TRANSFER AND SETTLEMENT AGREEMENT

Settlement Agreement

COLLATERAL TRANSFER AND SETTLEMENT AGREEMENT | Document Parties: GRAMERCY CAPITAL CORP | Citi Financial | CITICORP NORTH AMERICA, INC | Citigroup Financial Products Inc | GKK STARS ACQUISITION LLC | GKK STARS JUNIOR MEZZ 2, LLC | GOLDMAN SACHS MORTGAGE COMPANY | KBS ACQUISITION HOLDINGS, LLC | KBS ACQUISITION SUB, LLC | KBS Capital Advisors LLC | KBS DEBT HOLDINGS MEZZ HOLDER, LLC | KBS Debt Holdings, LLC | KBS GKK PARTICIPATION HOLDINGS I, LLC | KBS GKK PARTICIPATION HOLDINGS II, LLC | KBS LIMITED PARTNERSHIP | KBS REAL ESTATE INVESTMENT TRUST, INC | SL GREEN REALTY CORP | SLG Stars Mortgage Loan LLC You are currently viewing:
This Settlement Agreement involves

GRAMERCY CAPITAL CORP | Citi Financial | CITICORP NORTH AMERICA, INC | Citigroup Financial Products Inc | GKK STARS ACQUISITION LLC | GKK STARS JUNIOR MEZZ 2, LLC | GOLDMAN SACHS MORTGAGE COMPANY | KBS ACQUISITION HOLDINGS, LLC | KBS ACQUISITION SUB, LLC | KBS Capital Advisors LLC | KBS DEBT HOLDINGS MEZZ HOLDER, LLC | KBS Debt Holdings, LLC | KBS GKK PARTICIPATION HOLDINGS I, LLC | KBS GKK PARTICIPATION HOLDINGS II, LLC | KBS LIMITED PARTNERSHIP | KBS REAL ESTATE INVESTMENT TRUST, INC | SL GREEN REALTY CORP | SLG Stars Mortgage Loan LLC

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Title: COLLATERAL TRANSFER AND SETTLEMENT AGREEMENT
Governing Law: New York     Date: 9/8/2011
Industry: Consumer Financial Services     Law Firm: Greenberg Traurig;Kaye Scholer;Skadden Arps;Kirkland Ellis     Sector: Financial

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Exhibit 10.1

 

COLLATERAL TRANSFER AND SETTLEMENT AGREEMENT

 

COLLATERAL TRANSFER AND SETTLEMENT AGREEMENT (this " Agreement "), made as of this 1st day of September, 2011 (the " Effective Date "), is by and among GKK STARS ACQUISITION LLC, a Delaware limited liability company (" GKK Stars "), KBS ACQUISITION SUB, LLC, a Delaware limited liability company (" KBSAS "), KBS DEBT HOLDINGS MEZZ HOLDER, LLC, a Delaware limited liability company (" KBSDH "), KBS GKK PARTICIPATION HOLDINGS I, LLC, a Delaware limited liability company (" KBSPHI "), and KBS GKK PARTICIPATION HOLDINGS II, LLC, a Delaware limited liability company (" KBSPHII "; and, together with KBSDH and KBSPHI, collectively, " KBS "); and KBS ACQUISITION HOLDINGS, LLC, a Delaware limited liability company, (" Newco ").

 

WITNESSETH

 

WHEREAS, the entities listed on Schedule A attached hereto   (collectively, " Mortgage Borrower "), and KBSAS, as successor-in-interest to SLG Stars Mortgage Loan LLC, a Delaware limited liability company (" SLG Mortgage "), as successor-in-interest to SL GREEN REALTY CORP., a Maryland corporation, GOLDMAN SACHS MORTGAGE COMPANY, a New York limited partnership (" Goldman "), and CITICORP NORTH AMERICA, INC., a New York corporation (" Citi "; and, together with KBSAS and Goldman, individually and collectively, " Mortgage Lender " ) are parties to that certain Loan Agreement, dated as of April 1, 2008, as amended by that certain Amendment to Loan Agreement, dated as of August 22, 2008, that certain Second Amendment to Loan Agreement (the " Second Amendment "), dated as of March 9, 2010, that certain letter Re: Omnibus Extension of Loan Agreements (the " Extension "), dated as of March 13, 2011, that certain letter Re: Omnibus Extension of Loan Agreements (the " Second Extension "), dated as of April 15, 2011, and that certain letter Re: Omnibus Extension of Loan Agreements (the " Third Extension "), dated as of April 29, 2011 (as amended, the " Mortgage Loan Agreement "; and the loan described therein, the " Mortgage Loan ");

 

WHEREAS, pursuant to that certain Assignment and Assumption Agreement dated as of May 10, 2011, SLG Mortgage assigned all of its right, title and interest in and to the Mortgage Loan to KBSPHI, which subsequently contributed all of its right, title and interest in and to the Mortgage Loan to Newco pursuant to that certain Contribution Agreement dated as of May 10, 2011 (the " KBSPHI Contribution Agreement "), which subsequently contributed all of its right, title and interest in and to the Mortgage Loan to KBSAS pursuant to that certain Contribution Agreement dated as of May 10, 2011 (the " Newco Contribution Agreement ");

 

WHEREAS, the entities listed on Schedule B attached hereto (collectively, " Senior Mezzanine Borrower "), and KBS (as successor to Goldman and Citi (in their capacities as lenders under the Senior Mezzanine Loan Agreement (as hereinafter defined), the " Senior Mezzanine Lender ")) are parties to  that certain Amended and Restated Senior Mezzanine Loan Agreement, effective as of August 22, 2008, as amended by that certain Amendment to Amended and Restated Loan Agreement (the " Senior Mezz Amendment "), dated as of March 9, 2010, and by the Extension, the Second Extension and the Third Extension (as amended, the " Senior Mezzanine Loan Agreement "; and the loan described therein, the " Senior Mezzanine Loan ");

 

 

 


 

  

WHEREAS, a 56.25% participation in the Senior Mezzanine Loan was acquired by KBSPHI and then sold to Goldman pursuant to that certain Amended and Restated Master Repurchase Agreement, dated as of April 28,  2011, as amended by that certain Amendment No. 1 to Amended and Restated Master Repurchase Agreement dated as of May 10, 2011 (collectively, the " Goldman KBS Master Repurchase Agreement "), between KBSPHI and Goldman, and a 43.75% participation in the Senior Mezzanine Loan was acquired by KBSPHII and then sold to Citigroup Financial Products Inc., a Delaware corporation (“ Citi Financial ”) pursuant to that certain Amended and Restated Master Repurchase Agreement, dated as of April 28, 2011, as amended by that certain Amendment No. 1 to Amended and Restated Master Repurchase Agreement dated as of May 10, 2011  (collectively, the " Citi KBS Master Repurchase Agreement "; and, together with the Goldman KBS Master Repurchase Agreement, the " KBS Master Repurchase Agreement "), between KBSPHII and Citi;

 

WHEREAS, GKK STARS JUNIOR MEZZ 2, LLC (" Junior Mezzanine Borrower ") and KBSAS, as successor-in-interest to SLG Stars Mezz Loan, a Delaware limited liability company (" SLG Mezz "), Goldman and Citi (in their capacities as lenders under the Junior Mezzanine Loan Agreement (as hereinafter defined), individually and collectively, " Junior Mezzanine Lender "; and, collectively with the Mortgage Lender and Senior Mezzanine Lender, the " Lender " or " Lenders ") are parties to that certain Junior Mezzanine Loan Agreement, dated as of August 22, 2008, as amended by the Extension, the Second Extension and the Third Extension (as amended, the " Junior Mezzanine Loan Agreement " (and the loan described therein, the " Junior Mezzanine Loan "); and, together with the Mortgage Loan Agreement and the Senior Mezzanine Loan Agreement, the " Loan Agreement ");

 

WHEREAS, pursuant to that certain Assignment and Assumption Agreement dated as of May 10, 2011, SLG Mezz assigned all of its right, title and interest in and to the Junior Mezzanine Loan to KBSPHI, which subsequently contributed all of its right, title and interest in and to the Junior Mezzanine Loan to Newco pursuant to the KBSPHI Contribution Agreement, which subsequently contributed all of its right, title and interest in and to the Junior Mezzanine Loan to KBSAS pursuant to the Newco Contribution Agreement;

 

WHEREAS, all amounts outstanding under the Mortgage Loan, the Senior Mezzanine Loan and the Junior Mezzanine Loan became due and payable on May 6, 2011, and remain outstanding and due and payable as of the Effective Date, and demand for payment has been made for all amounts outstanding under the Mortgage Loan, the Senior Mezzanine Loan and the Junior Mezzanine Loan (collectively, the " Loans ")  pursuant to the terms of those certain letters dated May 12, 2011, executed by Archon Group, LP, the servicer under the Loan, and delivered to Mortgage Borrower, Senior Mezzanine Borrower and Junior Mezzanine Borrower;

 

WHEREAS, the parties hereto have agreed to enter into this Agreement and the Lender has agreed to execute and deliver certain releases, terminations and satisfactions of GKK Stars and certain of its Affiliates' obligations, and GKK Stars and certain of its Affiliates have agreed to execute and deliver certain releases of the Lender and their Affiliates, in connection with the Loans (with all documents evidencing, securing or otherwise relating to the Loans being referred to herein as " Loan Documents "), including any guaranties issued in connection therewith, upon and subject to the terms and conditions set forth below in this Agreement.

 

 

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

 

ARTICLE I

 

INCORPORATION

 

The recitals set forth above and the exhibits and schedules attached to this Agreement are hereby incorporated into and made a part of this Agreement.

 

ARTICLE II

 

DEFINITIONS

 

Capitalized terms not defined herein shall have the meanings set forth in the Senior Mezzanine Loan Agreement.  The following terms shall have the meanings set forth in this Article II :

 

" Accounts " shall have the meaning set forth in Section 5.2 .

 

" Acquisition Co " shall mean, collectively, one or more entities that are directly or indirectly owned by KBSAS and created to acquire, directly or indirectly, the Transferred Interests.

" Additional Payments " shall have the meaning set forth in Section 10.3 .

 

" Additional Pledged Collateral " shall mean either (i) a pledge to Newco (which pledge would be granted by a subsidiary of KBS Real Estate Investment Trust, Inc. (" KBS REIT Sub ") of the equity interests held indirectly by KBS Real Estate Investment Trust, Inc. in (a) the multi-state property portfolio commonly referred to as the “Hackman Portfolio” or (b) in any other equity interests held indirectly by KBS Real Estate Investment Trust, Inc., or (ii) if KBS REIT Sub is contractually prohibited from pledging such equity interests, an assignment in form and substance satisfactory to GKK of all proceeds generated by and derived from such equity interests.

 

" AFR Loan " shall mean the mortgage loan made to AFR Owner.

 

" AFR Loan Equity Interests " shall mean all of the equity interests in AFR Owner, and all right, title, interests, obligations and liabilities appurtenant thereto.

 

" AFR Owner " shall mean, collectively, (i) First States Investors Asset Group A, L.P., (ii) First States Investors Asset Group A GP, LLC, (iii) First States Investors HFS, L.P., (iv) First States Investors HFS GP, LLC, (v) First States Investors FPC, L.P., (vi) First States Investors FPC GP, LLC, (vii) First States Investors TRS, L.P. and (viii) First States Investors TRS GP, LLC.

 

" AFRT " shall mean American Financial Realty Trust, a Maryland real estate investment trust.

 

 

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" Agreement " shall have the meaning set forth in the preamble hereto.

 

" Amended and Restated Carveout Guaranty " shall mean a guaranty from Guarantor to KBS and KBSAS in the form attached hereto as Exhibit O.

 

" Bankruptcy Code " shall have the meaning set forth in Section 10.1 .

 

" BBD1 Entity " shall mean First States Investors 5000A, LLC.

 

" Billing Period " shall mean the applicable calendar month in which the billing applies, except that, for July, 2011, the billing period shall commence on July 9, 2011, and end on July 30, 2011

 

" Breach Event " shall have the meaning set forth in Section 9.1 .

 

" Citi " shall have the meaning set forth in the first recital paragraph hereto.

 

" Citi Financial " shall have the meaning set forth in the fourth recital paragraph hereto.

 

" Citi KBS Master Repurchase Agreement " shall have the meaning set forth in the fourth recital paragraph hereto.

 

" Dana Borrower " shall have the meaning set forth in Section 3.3 .

 

" Dana Loan " shall mean the mortgage loan made to Dana Owner.

 

" Dana Loan Equity Interests " shall mean all of the equity interests in Dana Owner, and all right, title, interests, obligations and liabilities appurtenant thereto.

 

" Dana Owner " shall mean, collectively, (i) First State Investors 3500 A, LLC and (ii) First State Investors 3500, LLC.

 

" Dana Property " shall mean all real property owned, directly or indirectly, by the Dana Owner.

 

" Deed in Lieu Agreement " shall mean that certain Deed in Lieu of Foreclosure Agreement, dated as of July 29, 2011, by and among MML RE Finance LLC, U.S. Bank National Association, David J. Ganss, Dana Borrower and First States Group L.P.

 

" Delayed Transfer Entity " means, as of the applicable date of determination, any Equity Interest that has not yet been Transferred to Acquisition Co, it being agreed that such Equity Interest shall cease being a Delayed Transfer Entity on the date that such Equity Interest becomes a Transferred Interest in accordance with the terms of this Agreement.

 

" Delayed Transfer Properties " shall have the meaning set forth in Section 5.5 .

 

 

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" Delayed Transfer Property Portfolio " shall mean a group of Delayed Transfer Properties secured by the same first mortgage debt financing.

 

" Delayed Transfer Property Shortfall " shall mean in any month, the amount, if any, by which the aggregate net cash proceeds from the Delayed Transfer Properties are insufficient to cover the costs, obligations or other liabilities of all of the Delayed Transfer Properties as they become due.

 

" Effective Date " shall have the meaning set forth in the preamble hereto.

 

" Equity Interests " shall mean the limited liability company, limited partnership and corporate equity interests   in the direct and indirect subsidiaries of GKK Stars set forth on Schedule I attached hereto, it being agreed that "Equity Interests" shall expressly exclude the AFR Loan Equity Interests and the Dana Loan Equity Interests.

 

" Excess Cash Flow " shall mean all net cash proceeds generated by a Delayed Transfer Property Portfolio in excess of the amounts required to (i) be applied towards the payment of any first mortgage debt encumbering such Delayed Transfer Property Portfolio (including amounts to be reserved in accordance with applicable cash management mechanisms) or (ii) fund operating expenses and approved capital expenses relating to such Delayed Transfer Property Portfolio.

 

" Extension " shall have the meaning set forth in the first recital paragraph hereto.

 

" FSG " shall mean First States Group, L.P., a Delaware limited partnership.

 

" FSI Cash Trap " shall have the meaning set forth in Section 6.1(d) .

 

" FSI Lender " shall have the meaning set forth in Section 6.1(a) .

 

" FSI Loan " shall have the meaning set forth in Section 6.1(a) .

 

" FSI Loan Entity Interests " shall have the meaning set forth in Section 6.1(b) .

 

" FSI Payment Guaranty " shall have the meaning set forth in Section 6.1(c) .

 

" FSIR " shall mean First States Investors Realty, LLC, a Delaware limited liability company and its subsidiaries.

 

" FSMC " shall mean First States Management Corp., L.P., a Delaware limited partnership.

 

" FSMC Management Contracts " shall mean, collectively, the management agreements described on Schedule M attached hereto.

 

" FSMC Service Contracts " shall mean, collectively, the contracts and agreements described on Schedule F attached hereto.

 

 

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" GKK Capital " shall mean GKK Capital LP, a Delaware limited partnership.

 

" GKK Manager " shall have the meaning set forth in Section 5.6 .

 

" GKK Stars " shall have the meaning set forth in the preamble hereto.

 

" GKK Transaction Expenses " shall mean the legal fees of GKK Stars and its Affiliates and subsidiaries (direct and indirect) and all other out of pocket expenses (excluding amounts owed to third-party, non-attorney advisors) of GKK Stars and its Affiliates and subsidiaries incurred in negotiating this Agreement and carrying out the terms and provisions of this Agreement after July 8, 2011, including, without limitation, legal fees and all other out of pocket expenses (excluding amounts owed to third party, non-attorney advisors) incurred and payable in connection with any Transfer.  For the avoidance of doubt, GKK Transaction Expenses shall not include legal fees for the Gramercy Entities that are not directly related to effectuating the transactions provided for in this Agreement.

 

" Goldman " shall have the meaning set forth in the first recital paragraph hereto.

 

" Goldman KBS Master Repurchase Agreement " shall have the meaning set forth in the fourth recital paragraph hereto.

 

" Gramercy Back-Up Guaranty " shall mean the guaranty in the form attached hereto as Exhibit E executed, by Guarantor.

 

" Gramercy Entities " shall mean GKK Stars, GKK Stars Junior Mezz I LLC, the Junior Mezzanine Borrower, GKK Capital and the Guarantor.

 

" Gramercy Releases " shall mean the releases executed in the forms of Exhibit C-1 and Exhibit D-1 attached hereto pursuant to the provisions of Section 4.2 .

 

" Ground Lessor " shall have the meaning set forth in the definition of the term "Schwab Harborside Lease."

 

" Guarantor " shall mean Gramercy Capital Corp., a Maryland corporation.

 

" Guarantor Allocation " shall be an amount equal to (i) the GKK Transaction Expenses after July 8, 2011, minus (ii) 50% of the KBS Transaction Expense Amount, but in no event greater than Guarantor Expense Cap .

 

" Guarantor Expense Cap " shall mean $500,000.

 

" Initial AFRT Transfer Documents " shall have the meaning set forth in Section 3.5 .

 

" Initial Equity Interests " shall mean the Equity Interests set forth on Schedule I that are indicated as Transfers occurring on the Effective Date.

 

" Initial PB Capital Notice " shall have the meaning set forth in Section 5.1 .

 

 

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" Initial Resignation Document " shall have the meaning set forth in Section 5.1 .

 

" Junior Mezzanine Borrower " shall have the meaning set forth in the fifth recital paragraph hereto.

 

" Junior Mezzanine Lender " shall have the meaning set forth in the fifth recital paragraph hereto.

 

" Junior Mezzanine Loan " shall have the meaning set forth in the fifth recital paragraph hereto.

 

" Junior Mezzanine Loan Agreement " shall have the meaning set forth in the fifth recital paragraph hereto.

 

" KBS " shall have the meaning set forth in the preamble hereto.

 

" KBS Lender " shall mean KBSAS, in its capacity as a Mortgage Lender, KBS, in its capacity as Senior Mezzanine Lender, and KBSAS, in its capacity as a Junior Mezzanine Lender.

 

" KBS Master Repurchase Agreement " shall have the meaning set forth in the fourth recital paragraph hereto.

 

" KBS REIT Sub " shall have the meaning set forth in the definition of "Additional Pledge Collateral."

 

" KBS Transaction Expense Amount " shall mean the legal fees and all other out of pocket expenses (expressly excluding the legal fees and expenses of tax or securities counsel to KBS and expressly excluding all fees and/or expenses payable to non-attorney advisors, service providers and/or costs and expenses payable for transfer taxes arising from any of the Transfers or payable to third party mortgage lenders in connection with the Transfers) incurred by KBS and its Affiliates and subsidiaries (direct and indirect) after July 8, 2011 in negotiating this Agreement and carrying out the terms and provisions of this Agreement, including, without limitation, legal fees incurred by KBS and payable in connection with any Transfer.

 

" KBSAS " shall have the meaning set forth in the preamble hereto.

 

" KBSDH " shall have the meaning set forth in the preamble hereto.

 

" KBSPHI " shall have the meaning set forth in the preamble hereto.

 

" KBSPHI Contribution Agreement " shall have the meaning set forth in the second recital paragraph hereto.

 

" KBSPHII " shall have the meaning set forth in the preamble hereto.

 

" Lender " shall have the meaning set forth in the fifth recital paragraph hereto.

 

 

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" Lender Releases " shall mean the releases executed in the forms of Exhibit B and Exhibit D-2 pursuant to the provisions of Section 4.2 .

 

" Loan Agreement " shall have the meaning set forth in the fifth recital paragraph hereto.

 

" Loan Documents " shall have the meaning set forth in the eighth recital paragraph hereto.

 

" Loans " shall have the meaning set forth in the seventh recital paragraph hereto.

 

" Losses " shall have the meaning set forth in Section 9.2(a) .

 

" Management Services Agreement " shall mean the management services agreement to be entered into by Acquisition Co and GKK Stars or a designated affiliate of GKK Stars, upon the terms set forth on Schedule E hereto.

 

" Master Sublease " shall have the meaning set forth in definition of the term "Schwab Harborside Lease."

 

" Mezzanine Loans " shall mean, collectively, the Senior Mezzanine Loan and the Junior Mezzanine Loan.

 

" Mortgage Borrower " shall have the meaning set forth in the first recital paragraph hereto.

 

" Mortgage Lender " shall have the meaning set forth in the first recital paragraph hereto.

 

" Mortgage Loan " shall have the meaning set forth in the first recital paragraph hereto.

 

" Mortgage Loan Agreement " shall have the meaning set forth in the first recital paragraph hereto.

 

" Newco " shall have the meaning set forth in the preamble hereto.

 

" Newco Contribution Agreement " shall have the meaning set forth in the second recital paragraph hereto.

 

" Newco Debt Cap Amount " shall mean $180 million plus (i) an amount equal to the lesser of (a) the value of all Additional Pledged Collateral that has been pledged as security to Newco and such security interest has been perfected under the Uniform Commercial Code, in a manner reasonably satisfactory to GKK Stars, and (b) $20,000,000, minus (ii) an amount equal to all principal amounts repaid by KBS or its Affiliates under the KBS Master Repurchase Agreement (or any replacement financing facility) out of sales proceeds obtained or derived from properties directly or indirectly owned by AFRT as of the date of this Agreement.

 

 

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" Notice " shall have the meaning set forth in Section 11.10 .

 

" Original Subtenant " shall have the meaning set forth in definition of the term "Schwab Harborside Lease."

 

" Outside Transfer Date " shall mean December 15, 2011, time being of the essence, provided that in the event that a Proceeding or other judicial process exists on December 15, 2011, pursuant to which a stay or other injunctive action on the Transfer of GKK Stars's Equity Interest in AFRT is in effect, the Outside Transfer Date shall be extended through the date that is ten (10) business days after the date of any order lifting such stay or injunctive action is final and nonappealable.

 

" PB Capital Intercreditor Agreement " shall mean that certain Amended and Restated Intercreditor Agreement, dated as of August 22, 2008, by and among PB Capital Corporation, a Delaware corporation individually and as "Agent" for one or more "Lenders"; Goldman Sachs Mortgage Company (as successor-in-interest to Goldman Sachs Commercial Mortgage Capital, L.P., a New York limited partnership and Citicorp North America, Inc., a New York corporation; and Goldman Sachs Mortgage Company (as successor-in-interest to Goldman Sachs Commercial Mortgage Capital, L.P.), a New York limited partnership, Citicorp North America, Inc., a New York corporation, SL Green Realty Corp, a Maryland corporation, and SLG Stars Mezzanine Loan LLC, a Delaware limited liability company (as successor by assignment from SL Green).

 

" PB Capital Loan " shall have the meaning set forth in Section 6.2(a) .

 

" PB Capital Loan Entity " shall have the meaning set forth in Section 6.2(a) .

 

" PB Capital Loan Entity Transfer " shall have the meaning set forth in Section 6.2(a) .

 

" PB Capital Loan Guaranties " shall have the meaning set forth in Section 6.2(a) .

 

" Proceeding " shall have the meaning set forth in Section 10.1 .

 

" Release Effective Date " shall mean the earliest to occur of (i) the date that the Equity Interests in both the PB Capital Loan Entity and the BBD1 Entity have been Transferred in accordance with this Agreement, or (ii) if the Equity Interests in the PB Capital Loan Entity have not been Transferred on or prior to September 15, 2011, the later of (a) September 15, 2011 and (b) the date that the Equity Interests in the BBD1 Entity have been Transferred in accordance with this Agreement, or (iii) December 15, 2011.

 

 

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" Schwab Harborside Lease " shall mean the Master Sublease made as of June 24, 2004 by and between Charles Schwab & Co., Inc., a California corporation (" Sublandlord "), and First States Investors Realty, LLC, a Delaware limited liability company (" Original Subtenant "), as amended by that certain First Amendment to Master Sublease made as of December 15, 2007 (" Master Sublease ") by and between Sublandlord and Original Subtenant, as further amended by that certain Second Amendment to Master Sublease made as of December 16, 2008 by and between Sublandlord and First States Investors Harborside, LLC, a Delaware limited liability company (" Subtenant ")(successor-in-interest to Original Subtenant), as further amended by that certain Third Amendment to Master Sublease made as of February 25, 2009 by and between Sublandlord and Subtenant, as further amended by that certain Fourth Amendment to Master Sublease made as of March 22, 2009 by and between Sublandlord and Subtenant, as further amended by that certain Fifth Amendment to Master Sublease made as of March 31, 2009 by and between Sublandlord and Subtenant, as further amended by that certain Sixth Amendment to Master Sublease made as of April 27, 2010 by and between Sublandlord and Subtenant, which is a sublease of the property referenced in that certain Amended and Restated Lease dated as of December 29, 2000 by and between Plaza X Leasing Associates L.L.C. (" Ground Lessor ") and Sublandlord.

 

" Second Amendment " shall have the meaning set forth in the first recital paragraph hereto.

 

" Second Extension " shall have the meaning set forth in the first recital paragraph hereto.

 

" Second PB Capital Notice" shall have the meaning set forth in Section 3.5(d) .

 

" Senior Management " shall mean any of the following individuals, in their individual capacities as an executive of GKK Stars:  (a) Roger M. Cozzi, (b) Edward J. Matey, Jr., (c) Tim O’Connor, (iv) Allan B. Rothschild and (v) Robert Foley.

 

" Senior Mezz Amendment " shall have the meaning set forth in the third recital paragraph hereto.

 

" Senior Mezzanine Borrower " shall have the meaning set forth in the third recital paragraph hereto.

 

" Senior Mezzanine Lender " shall have the meaning set forth in the third recital paragraph hereto.

 

" Senior Mezzanine Loan " shall have the meaning set forth in the third recital paragraph hereto.

 

" Senior Mezzanine Loan Agreement " shall have the meaning set forth in the third recital paragraph hereto.

 

" SLG Mezz " shall have the meaning set forth in the fifth recital paragraph hereto.

 

" SLG Mortgage " shall have the meaning set forth in the first recital paragraph hereto.

 

" Sublandlord " shall have the meaning set forth in definition of the term "Schwab Harborside Lease."

 

" Subtenant " shall have the meaning set forth in definition of the term "Schwab Harborside Lease."

 

 

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" Third Extension " shall have the meaning set forth in the first recital paragraph hereto.

 

" Transfer " or " Transferred " shall mean transferring or having transferred the Equity Interests to Acquisition Co or KBSAS, as applicable, in accordance with, and subject to the terms and conditions of, Section 3.5 hereof.

 

" Transfer Acceptance Certificate " shall mean a certificate in the form of Exhibit J attached hereto.

 

" Transfer Instruments " shall mean the Assignment and Assumption Agreements in the form of Exhibit A hereto, resolutions of AFRT approving this Agreement and all actions and transactions contemplated hereby, and such other transfer declarations, affidavits and other documents which shall permit Acquisition Co and any subsidiary of Acquisition Co to receive the Transfer of the Equity Interests as provided for herein and powers of attorney in favor of Acquisition Co and any subsidiary of Acquisition Co which shall permit Acquisition Co and any subsidiary of Acquisition Co to execute such other documents or instruments to Transfer the Equity Interests as provided for herein.

 

" Transferred Interests " shall mean the Equity Interests transferred to or at the direction of Acquisition Co or KBSAS, as applicable.

 

" UCC " shall mean means the Uniform Commercial Code as in effect on the date hereof in the State of New York.

 

" Voluntary Proceeding " shall mean (i) any Proceeding voluntarily filed in court by GKK Stars or any of its subsidiaries (direct or indirect) or (ii) any other Proceeding in which Senior Management has colluded with any other Person in causing the filing in court of such Proceeding against GKK Stars or any of its direct or indirect subsidiaries.  For purposes of determining a Voluntary Proceeding, collusion shall not include the failure of GKK Stars or its Affiliates to pay mortgage debt service or any other property related expenses in and of itself, or any correspondence or communication by any representative or employee of GKK Stars or its Affiliates, other than Senior Management, with creditors of any of GKK Stars’ direct or indirect subsidiaries, relating to such debt or expenses.

 

ARTICLE III

 

TRANSFER AND SETTLEMENT

 

Section 3.1            Formation of Acquisition Co .  On or prior to the Effective Date, KBSAS shall form each Acquisition Co that is intended to be a recipient of a Transfer of Initial Equity Interests on the Effective Date.

 

 

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Section 3.2            Transfer of AFR Loan Equity Interests .  On or prior to the Effective Date, GKK Stars shall cause all AFR Loan Equity Interests to be assigned to an entity in which AFRT has no direct or indirect ownership interest and shall cause FSG and any other subsidiaries (direct or indirect) of GKK Stars to be released from any and all obligations under the AFR Loan.

 

Section 3.3            Dana Deed in Lieu Agreement .  In no event will GKK Stars amend or modify (or permit First States Investors 3500, LLC (" Dana Borrower ") to amend or modify) the Deed in Lieu Agreement without first obtaining the prior written consent of Newco, Citi Financial and Goldman.

 

Section 3.4            Intentionally Omitted .

 

Section 3.5            Execution of Transfer Instruments .

 

(a)           On the Effective Date, GKK Stars shall execute and deposit (and/or cause to be executed and deposited) with KBSAS or its designee the Transfer Instruments with respect to each of the Equity Interests.  With the exception of the Transfer Instruments pertaining to GKK Stars's Equity Interest in AFRT, which shall be in favor of KBSAS or such other entity as directed by KBSAS (the " Initial AFRT Transfer Documents "), the Transfer Instruments shall be "in blank" or, at the direction of Acquisition Co, in favor of Acquisition Co or a designee.  Acquisition Co or KBSAS, as applicable, shall consummate the direct or indirect Transfer of all of the Equity Interests through contractual assignments of the applicable Equity Interests or foreclosures of such Equity Interests, in either case, in accordance with this Agreement on or prior to the Outside Transfer Date, except to the extent set forth in Section 3.5(d) and except to the extent otherwise provided in Section 9.5 , and, notwithstanding the foregoing, neither Acquisition Co nor KBSAS shall be in breach of such obligations to the extent they are excused from performance pursuant to the provisions of Section 9.5 or are otherwise prevented by operation of law or judicial process from consummating such Transfers to the extent provided for below.  KBSAS shall have the right to select the order in which the applicable Equity Interests are Transferred and whether an Equity Interest will be Transferred by a contractual assignment or through foreclosure.  The Transfer Instruments shall provide that, unless GKK Stars's Equity Interest in AFRT is Transferred to Acquisition Co or its designated subsidiary prior to the Outside Transfer Date, in which case the Initial AFRT Transfer Documents shall be deemed null and void, GKK Stars's Equity Interest in AFRT shall be deemed Transferred to KBSAS on the Outside Transfer Date pursuant to the Initial AFRT Transfer Documents unless Acquisition Co and KBSAS are excused from effectuating such Transfer pursuant to the provisions of Section 9.5 herein; provided , that if a Proceeding or other judicial process exists on December 15, 2011 pursuant to which a stay or other injunctive action on the Transfer of GKK Stars's Equity Interest in AFRT is in effect, such Transfer shall instead be deemed to have occurred pursuant to the Initial AFRT Transfer Documents on the date that is ten (10) business days after any order lifting such stay or injunctive action is final and nonappealable.  Notwithstanding anything stated to the contrary in this Agreement or in any of the Transfer Instruments, no Transfer Instrument shall be considered or treated as if it has been delivered to Acquisition Co or any of its subsidiaries unless and until such Transfer Instrument has been "accepted" by Acquisition Co or a subsidiary of Acquisition Co as evidenced by such transferee's acceptance of such Transfer through such party's signing the Transfer Acceptance Certificate attached to the applicable Transfer Instrument; provided , that no Transfer Acceptance Certificate shall be required in connection with (i) the Transfer of Equity Interests in AFRT on the Outside Transfer Date unless KBSAS and Acquisition Co are relieved from their obligations to accept an assignment of Equity Interests in AFRT pursuant to the provisions of Section 9.5 in which event the execution and delivery of a Transfer Acceptance Certificate shall be required, (ii) the Transfer of Equity Interests in the BBD1 Entity, provided that GKK has first delivered to KBS written confirmation from the servicer of the mortgage loan to which the BBD1 Entity is a party, in form and substance reasonably acceptable to KBS, and (iii) any Transfer Instrument delivered in connection with a foreclosure of any of the Equity Interests.  The parties hereto agree that the Initial Equity Interests shall be Transferred on the Effective Date.

 

 

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(b)           Commencing on the Effective Date and continuing through the Outside Transfer Date, GKK Stars shall (and GKK Stars shall cause its direct and indirect subsidiaries to), within ten (10) business days following Newco's written request to GKK Stars, execute such additional transfer documents or instruments not already executed by GKK Stars and/or its Affiliates as of the Effective Date to the extent necessary to effectuate the Transfers, which such additional transfer documents or instruments shall be substantially in the form of the Transfer Instruments already delivered to KBSAS and Acquisition Co (and/or its subsidiaries) as of the Effective Date and, if any such transfer document or instrument is a new form of document not previously delivered to KBSAS, Acquisition Co or its subsidiaries prior to the Effective Date, then such transfer document or instrument shall be in the form customarily used for such type of transfer reasonably approved by GKK Stars and KBSAS or its applicable subsidiary.  Notwithstanding the foregoing, neither GKK Stars nor its Affiliates or subsidiaries shall be obligated to execute any additional transfer documents or instruments to the extent the applicable signatory reasonably believes that such documents or instruments may violate applicable law or create personal liability to the person that is the signatory to such document or instrument.

 

GKK Stars acknowledges and agrees for itself and its subsidiaries that, with respect to any transfer declarations or other documents required to be prepared and filed and/or recorded with any governmental agency in connection with any Transfer contemplated by this Agreement, Acquisition Co shall have the authority to complete all blanks appearing in (and complete all information required to be completed in) such transfer declarations and/or documents including, without limitation, the value of the interest being transferred and the transfer fees payable in connection with such Transfer; GKK Stars agrees for itself and all of its subsidiaries they shall not have the right to object to any of such amounts that are filled in such transfer declarations and or other documents.

 

(c)           GKK Stars acknowledges and agrees that the Transfer Instruments to be executed and delivered by GKK Stars and its Affiliates as required by this Agreement may include, to the extent required by any of the lenders, excluding Mortgage Lender, holding mortgage debt encumbering any of the real properties owned directly or indirectly by GKK Stars, releases in a form mutually acceptable to GKK Stars and its Affiliates and any of such mortgage lenders.

 

 

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(d)           On or prior to September 15, 2011, KBS shall elect in writing to either (i) proceed to Transfer the Equity Interests in the PB Capital Loan Entity on or prior to the Outside Transfer Date in a manner that complies with the terms, conditions and restrictions of the PB Capital Intercreditor Agreement in all material respects or (ii) give GKK Stars the option to assign the Equity Interests in the PB Capital Loan Entity to an entity in which AFRT has no direct or indirect ownership interest.  If KBS fails to elect in writing to proceed under either clause (i) or clause (ii) of the previous sentence by September 15, 2011, KBS shall be deemed to have elected to proceed under clause (i), or if KBS elects to proceed under clause (ii) of the previous sentence but fails to deliver the consent of Citi Financial and Goldman to such election by September 15, 2011, KBS shall be deemed to have elected to proceed under clause (i).  On the Effective Date, KBS Debt Holdings, LLC shall indemnify, defend and hold harmless the Gramercy Entities against all Losses incurred by any Gramercy Entity in connection with such Transfer of the PB Capital Loan Entity, unless such Losses are caused by an affirmative action of GKK Stars or one of its Affiliates unrelated to effectuating the Transfers hereunder.  If KBS elects to give GKK Stars the option under clause (ii) above with the consent of Citi Financial and Goldman, GKK Stars shall have five (5) business days in which to notify KBS of its intention to exercise the option to assign the Equity Interests in the PB Capital Loan Entity to its designee (the " Initial PB Capital Notice ").  If GKK Stars elects to exercise the option in clause (ii) above, GKK Stars will use commercially reasonable efforts to obtain the applicable mortgage lender consent to the transfer of the Equity Interests in the PB Capital Loan Entity to its designee by September 30, 2011.  If GKK Stars fails to get such consent, it may elect to proceed with such transfer or notify KBS on or prior to October 5, 2011 of its intent not to proceed with such transfer (the " Second PB Capital Notice ").  If GKK Stars elects to exercise its option to transfer of the Equity Interests in the PB Capital Loan Entity, it will effectuate such assignment on or prior to October 17, 2011 and, concurrently with such assignment, KBS shall return the Transfer Instruments with respect to the PB Capital Loan Entity to GKK Stars and such Transfer Instruments and the indemnity contained above in this Section 3.5(d) shall be void and have no further force or effect.  If GKK Stars elects not to exercise such option pursuant to an Initial PB Capital Notice or a Second PB Capital Notice, or fails to provide KBS with an Initial PB Capital Notice within the five (5) business day period set forth above, (A) KBS shall, subject to the provisions of Section 9.5 herein, be obligated to effectuate the Transfer of such Equity Interests on or prior to the Outside Transfer Date and (B) Newco (and not Debt Holdings, LLC) shall indemnify, defend and hold harmless the Gramercy Entities against all Losses incurred by any Gramercy Entity in connection with such Transfer, unless such Losses are caused by an affirmative action of GKK Stars or one of its Affiliates.

 

(e)           The negotiation, execution and delivery of all Transfer Instruments by any officer or signatory of GKK Stars (or any Affiliate or subsidiary, direct or indirect, of GKK Stars) shall be solely in such person's capacity as an officer or authorized signatory of any such entity and shall be at no out of pocket expense (other than those reimbursed by KBS pursuant to the express terms of this Agreement) to the Gramercy Entities.  Notwithstanding the foregoing, neither GKK Stars nor its Affiliates or subsidiaries shall be obligated to execute any such document to the extent the applicable signatory reasonably believes that such document may violate applicable law or create personal liability to the person that is the signatory to such document.  Notwithstanding the foregoing or anything stated to the contrary elsewhere in this Agreement, no person signing any of the documents in the form of those attached as exhibits to this Agreement shall be entitled to claim that they reasonably believe that such document may create personal liability to them.

 

 

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Section 3.6            No Interference With Senior Mezzanine Lender Foreclosure .  Subject to the terms of Section 3.7(c) , GKK Stars shall not, and GKK Stars shall ensure that none of its Affiliates or principals shall, take any affirmative action that shall prevent KBS from effecting any Transfer in accordance with this Agreement.  For the purposes of this Section 3.6 , "effecting any Transfer in accordance with this Agreement" shall include, without limitation, (a) KBS's initiating and completing  foreclosure sales with respect to all collateral provided by any of the borrowers under the Senior Mezzanine Loan (including UCC sales), (b) KBS's completing the delivery  and/or filing or recording of any Transfer Instruments and/or (c) KBS's filing actions against any or all of the borrowers (to the extent not prohibited under this Agreement or any of the documents executed in connection with this Agreement and not against any of the Gramercy Entities) solely for the purpose of foreclosing upon, or preserving, protecting or pursuing the exercise of its remedies against the collateral for the Senior Mezzanine Loan.

 

Section 3.7            Authorization to Negotiate and Talk to Third Party Mortgage Lenders .

 

(a)           To the extent not previously authorized, from and after the Effective Date until the Outside Transfer Date, GKK Stars shall execute and deliver, and will cause each of its direct and indirect subsidiaries to execute and deliver, to KBS (and any KBS Affiliate) authorizations and consents to authorize KBS (and its Affiliates) to discuss with all third party mortgage lenders, and to obtain all consents and/or approvals required or desired in connection with, the Transfers contemplated by this Agreement, which written authorization and consent shall be substantially  in the form attached hereto as Exhibit I .  Subject to the provisions of this Section 3.7 , KBS, and not GKK Stars, will be responsible for obtaining all such consents.

 

(b)           Commencing on the Effective Date and continuing through the Outside Transfer Date, GKK Stars shall promptly, upon KBS's written request, cooperate, and GKK Stars shall (i) cause its direct and indirect subsidiaries to cooperate in providing third party lenders holding mortgage debt encumbering any Delayed Transfer Property Portfolio with information reasonably requested by KBS and in the possession of GKK Stars, its Affiliates and their subsidiaries (direct or indirect) and (ii) shall direct the property managers for the real properties, solely to the extent that the same are Affiliates of GKK Stars or are party to a management contract with GKK Stars or its Affiliates, to cooperate in providing third party lenders holding mortgage debt encumbering any Delayed Transfer Property Portfolio with information reasonably requested by KBS and in the possession of such property managers, in order to facilitate obtaining any consents or approvals from any such third party mortgage lenders (and/or satisfying any conditions) with respect to the Transfers contemplated by this Agreement.

 

 

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(c)           Commencing on the Effective Date and continuing through the Outside Transfer Date, GKK Stars shall cause one or more of its representatives (or one or more representatives of its applicable subsidiaries), upon KBS's written request and reasonable advance notice, to attend, and shall cause its direct and indirect subsidiaries to attend, meetings and/or conference calls to facilitate KBS's obtaining any consents or approvals with respect to the Transfers contemplated under this Agreement  from third party lenders holding mortgage debt encumbering any Delayed Transfer Property Portfolio.   With respect to any meetings in which GKK Stars or its direct or indirect subsidiaries are requested to attend or participate, KBS agrees to abide by the following: (i) KBS shall deliver reasonable prior written notice to GKK Stars of any meeting/conference call in which it (or any subsidiary (direct or indirect)) is expected to participate, which notice shall include a reasonably detailed description of the intended subject matter of such meeting/conference call, (ii) if GKK Stars (or any subsidiary, direct or indirect) is asked to make subjective statements at any such meeting/conference call, such entity shall be entitled to respond as it deems reasonably necessary and shall have no liability in connection with any statement made at any such meeting/conference call unless such statement seeks to challenge, disaffirm or otherwise repudiate the powers of KBS to communicate and negotiate with any such third party mortgage lenders, and (iii) the participation of any officer of GKK Stars (or any subsidiary, direct or indirect, of GKK Stars) at any such meeting/conference call shall be solely in its capacity as an officer of any such entity and at the cost (as to reasonable third party out of pocket traveling costs) of KBS.

 

(d)           The negotiation, execution and delivery of all documents required to be delivered pursuant to this Section 3.7 by any officer or signatory of GKK Stars (or any Affiliate or subsidiary, direct or indirect, of GKK Stars) shall be solely in such person's capacity as an officer or authorized signatory of any such entity.  Notwithstanding the foregoing, neither GKK Stars nor its Affiliates or subsidiaries shall be obligated to execute any such document to the extent the applicable signatory reasonably believes that such document may violate applicable law or create personal liability to the person that is the signatory to such document.

 

Section 3.8            Delivery of Due Diligence Documents .  To the extent not already delivered to KBS on the Effective Date, on or before the dates set forth in Schedule C attached hereto, GKK Stars shall cause to be delivered to KBS the documents and information set forth in Schedule C attached hereto to the extent that the same is in the possession of GKK Stars, any of its Affiliates or any property manager that is party to a management contract with GKK Stars or its Affiliates.

 

ARTICLE IV

 

RELEASES; INDEMNITIES.

 

Section 4.1            The parties to this Agreement acknowledge and agree that the Loan Agreement and the Loan Documents remain in full force and effect other than as affected by the provisions hereof and the other documents and releases executed in accordance with this Agreement, and that no rights and remedies thereunder are affected or waived except as expressly provided in this Agreement (including Section 3.6 hereof) or in any documents or releases executed pursuant to this Agreement (including Section 4.2 hereof).

 

 

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Section 4.2           On the Effective Date, (i) each of the Lenders shall execute and deliver to (A) Guarantor and GKK Capital the release in the form of Exhibit C-1 attached hereto and (B) GKK Stars Junior Mezz 1 LLC, the Junior Mezzanine Borrower, GKK Stars, AFR Owner and Dana Owner the release in the form of Exhibit C-2 attached hereto, each of which releases shall not be effective until the Release Effective Date, (ii) the Gramercy Entities, the AFR Owner, the Dana Owner and their respective subsidiaries shall execute and deliver to the Lenders a release in the form of Exhibit B attached hereto, which release shall not be effective until the Release Effective Date and (iii) Guarantor shall execute and deliver to KBS the Gramercy Back-Up Guaranty.  Immediately upon an Equity Interest becoming a Transferred Interest, (x) KBSAS shall cause such Transferred Interest to execute and deliver to the Gramercy Entities a release in the form of Exhibit D-1 attached hereto and (y) GKK Stars shall cause the Gramercy Entities to execute and deliver to the transferee of such Transferred Interest a release in favor of such transferee in the form of Exhibit D-2 attached hereto.  Nothing herein shall prevent KBSAS and Acquisition Co, as applicable, or its designated assignee from assuming all or a portion of the Mezzanine Loans.

 

Section 4.3           Concurrently with the effectiveness of each Transfer of Transferred Interests  in accordance with, and subject to the terms and conditions of, this Agreement, and in consideration of each such Transfer of Transferred Interests,

 

(a)           the indebtedness outstanding under the Senior Mezzanine Loan shall be deemed to have been reduced by the respective “Partial Satisfaction Amounts” set forth in Schedule G attached hereto relating to such Transferred Interests, as such “Partial Satisfaction Amounts” may be increased and/or reduced by KBS, KBSAS, Citi Financial and Goldman from time to time upon no less than three (3) business days prior written notice from KBS, KBSAS, Citi Financial and Goldman to GKK Stars provided that the sum of the “Partial Satisfaction Amounts” reflected in Schedule G attached hereto shall not be reduced below the “Aggregate Satisfaction Amount” reflected in Schedule G attached hereto, as the same may be amended and modified by KBS, KBSAS, Citi Financial and Goldman from time to time, and

 

(b) the security interests granted by each Senior Mezzanine Borrower in the Transferred Interests that are the subject of such Transfer shall be automatically released.

 

Notwithstanding anything stated to the contrary in this Section 4.3 , to the extent that a Transfer of Transferred Interests is effectuated through a foreclosure instead of a consensual Transfer pursuant to the delivery of the applicable Transfer Instruments, (i) the amount, if any, by which the indebtedness outstanding under the Senior Mezzanine Loan is reduced in partial satisfaction of the Senior Mezzanine Loan will be determined based upon the amounts bid in connection with any such foreclosure and will not be governed by the “Partial Satisfaction Amounts” set forth in Schedule G attached hereto, and (ii) the provisions of clause (b) above shall not be applicable to such Transfer.  Furthermore, notwithstanding the foregoing, under no circumstances shall the security interests granted by GKK Stars Acquisition LLC in AFRT under the terms and conditions of that certain Pledge and Security Agreement (Upper Tier) dated as of April 1, 2008 (as heretofore or hereafter amended and modified), be considered released until such time as all interests in AFRT have been transferred to KBSAS or its designee in accordance with, and subject to the terms and conditions of, this Agreement.

 

 

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ARTICLE V

 

COVENANTS

 

Section 5.1            Delivery of Resignations .  On the Effective Date, GKK Stars shall cause to be executed and delivered to KBS the document set forth on Exhibit L attached hereto, which documents are necessary to effectuate the resignation (and the replacement of the same by designees of KBS) of all managers, officers, directors and/or trustees of those AFRT subsidiaries in which Equity Interests (direct or indirect) are the subject of a Transfer in accordance with this Agreement as of the applicable Transfer dates (the " Initial Resignation Document ").  Commencing on the Effective Date and continuing through the Outside Transfer Date, GKK Stars shall, within ten (10) business days following KBS's written request to GKK Stars, cause to be delivered to KBS all documents necessary to effectuate, and obtain, the resignation (and the replacement of the same by designees of KBS) of all managers, officers, directors and/or trustees of those AFRT subsidiaries (direct or indirect) in which a Transfer is effectuated as to a Delayed Transfer Entity after the Effective Date, which documents shall be in substantially the same form as the Initial Resignation Document, to the extent such resignations are not covered by the Initial Resignation Document.  Notwithstanding the foregoing, neither GKK Stars nor its Affiliates or subsidiaries shall be obligated to execute any such document to the extent the applicable signatory reasonably believes that such document may violate applicable law.

 

Section 5.2            Bank Account Information and Transfer Documentation .  To the extent not already completed prior to the Effective Date, on the Effective Date, and except with respect to the Dana Loan Equity Interests and the AFR Loan Equity Interests, (a) GKK Stars shall segregate and identify (by property and/or portfolio) in a schedule all funds on deposit (as of a date not more than 10 business days prior to the Effective Date) in accounts maintained by, or for the benefit of, AFRT and its subsidiaries, which schedule shall set forth the name and address of the bank where each account is maintained, the amount on deposit in such account, the account number and the name under which such account is maintained and the name and telephone number of a contact person at the bank in which such account is maintained, and (b) GKK Stars shall execute, or cause to be executed, such documents and/or instruments as are necessary to enable KBSAS to have access to, and have signing authority for, all accounts reflected in the schedule delivered to KBS as provided above in this Section 5.2 to the extent relating to accounts held by,  or maintained for the benefit of, any subsidiary (direct or indirect) in which Equity Interests have been Transferred to Acquisition Co as of the Effective Date.  GKK Stars shall (x) no later than 15 business days after the Effective Date, provide KBS with unrestricted access to view online bank statements for each of the accounts referenced in the schedule delivered to KBS as provided in this Section 5.2 to the extent applicable to accounts held by, or maintained for the benefit of, any Delayed Transfer Entity (or any of its subsidiaries) that is not yet then the subject of a Transfer (the " Accounts ") or (y) to the extent that online bank statements are not available with respect to any Accounts, cause to be delivered to KBS no later than the 10 th day after receipt by GKK Stars, bank statements for each such Account, and (ii) GKK Stars shall cause to be delivered to KBS within ten (10) business days following written request by KBS, the documentation referenced in clause (b) above in this Section 5.2 with respect to any account held by, or maintained for the benefit of, any Delayed Transfer Entity (or any of its subsidiaries) for which a Transfer  has occurred under this Agreement after the Effective Date.

 

 

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Section 5.3            Audit Requirements .  As of the Effective Date of this Agreement, GKK Stars shall (i) provide KBS with reasonable access to internal documents, reports, risk assessments, process narratives and other information pertaining to and/or used by GKK Stars in connection with ensuring compliance by AFRT and its direct and indirect subsidiaries with Section 404 of the Sarbanes-Oxley Act; (ii) allow KBS’s internal audit team to perform property audits, walkthroughs, process documentation, control testing and any other procedure at GKK Stars needed to comply with Section 404 of the Sarbanes-Oxley Act; (iii) make available to KBS and its accountants all necessary books, records and other information needed in order to permit KBS to undertake an audit pursuant to 3.14 Audit requirements for the year ended December 31, 2010 and to prepare financial statements for the June 30, 2011 interim period , and (iv) permit GKK Stars's audit team at Ernst & Young to cooperate and coordinate information with KBS's audit team at Ernst & Young.  As soon as is practicable after September 30, 2011, GKK Stars shall make available to KBS and its accountants unaudited financial statements for the September 30, 2011 interim period and/or make available all necessary books, records and other information needed in order to permit KBS to prepare financial statements for the September 30, 2011 interim period.  As soon as is practicable after December 31, 2011, but no later than February 20, 2012, GKK Stars shall make available to KBS and its accountants unaudited financial statements for the December 31, 2011 interim and annual periods and/or make available all necessary books, records and other information needed in order to permit KBS to prepare financial statements for the December 31, 2011 interim and annual periods.

 

Section 5.4            Negative Operational Covenants .  From and after the Effective Date, GKK Stars shall not do any of the following, nor shall GKK Stars permit any of its subsidiaries (direct or indirect) to do any of the following:

 

(a)           (i) enter into any written contract or agreement with any Affiliate of GKK Stars and/or its subsidiaries (direct or indirect) or any Affiliate of SL Green Realty Corp. and/or any of its subsidiaries and (ii) fail to terminate any such contract or agreement within ten (10) business days of written notice from KBS to the extent the provisions of clause (i) in this Section 5.4(a) are violated, or

 

(b)           incur any Debt except for the Permitted Debt defined in the Senior Mezzanine Loan Agreement, other than pursuant to clause (iv) of the definition of Permitted Debt, and without regard to the 2% cap or the 60 day limitation in clause (ii) of such definition, or

 

(c)           make a voluntary Transfer (as such term is defined in the Senior Mezzanine Loan Agreement) in violation of the terms and conditions of the Senior Mezzanine Loan Agreement, except to an Affiliate of Newco or with respect to the transfer of the AFR Loan Equity Interests in accordance with Section 3.2 hereof or any transfer of the PB Capital Loan Entity Equity Interests pursuant to Section 3.5(d) hereof, or

 

 

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(d)           make any distributions in violation of the terms and conditions of the Senior Mezzanine Loan Agreement, subject to the provisions of Section 5.5(a) hereof.

 

Section 5.5           (a)            Use of Excess Cash Flow .  From and after the Effective Date, GKK Stars shall, subject to Section 5.4 above and this Section 5.5 , cause the real properties owned by each Delayed Transfer Entity (the " Delayed Transfer Properties ") to continue to be operated with the same care and to the same standard to which such real properties are being operated as of the date of this Agreement, solely to the extent that sufficient cash flow is being generated by the Delayed Transfer Properties to support such continued operation.  GKK Stars shall be permitted to apply any and all Excess Cash Flow generated by any Delayed Transfer Property Portfolio towards the payment of operating expenses, approved capital expenses and regularly scheduled payments of first mortgage debt (including amounts to be reserved in accordance with applicable cash management mechanisms) of any other Delayed Transfer Property Portfolio and GKK Transaction Expenses in excess of the Guarantor Allocation.  None of the Gramercy Entities shall have any obligation under this Agreement to contribute any capital or any other financial support to, or on behalf of, or in connection with any Delayed Transfer Property.  The existence of a Delayed Transfer Property Shortfall shall not constitute a Breach Event under this Agreement.

 

(b)            Protective Advances .  In the event of a Delayed Transfer Property Shortfall, GKK Stars will so notify KBS in writing, and KBS may, at its election (in its sole and absolute discretion), by written notice to GKK Stars within 10 business days following receipt of GKK Stars written request, fund, as a protective advance under the Senior Mezzanine Loan, all or a portion of the amount of the Delayed Transfer Property Shortfall to GKK Stars so that GKK Stars will have sufficient funds available to pay operating expenses, approved capital expenses and first mortgage debt (including amounts to be reserved in accordance with applicable cash management mechanisms) for the Delayed Transfer Properties as the same comes due.

 

Section 5.6            Management Services Agreement .  On the Effective Date, Acquisition Co and GKK Stars or a designated GKK Stars Affiliate ("GKK Manager") will enter into the Management Services Agreement; provided, however, if the Management Services Agreement is not entered into by Acquisition Co and GKK Manager on or before the Effective Date, Acquisition Co and GKK Stars covenant and agree to use commercially reasonable efforts to cause such Management Services Agreement to be entered into as promptly as is feasibly practicable following the Effective Date on terms consistent with those set forth in Schedule E attached hereto, and until the Management Services Agreement is executed by GKK Manager and Acquisition Co, the terms of Schedule E shall govern the parties obligations with respect to asset management services to be performed by GKK Manager for the properties and shall be deemed to be the "Management Services Agreement" for all purposes under the terms of this Agreement.  Unless (i) the Management Services Agreement is earlier terminated by Acquisition Co for reasons other than "for cause" as defined in the Management Services Agreement, or (ii) Acquisition Co is in material default (after the expiration of all notice and cure periods) under the Management Services Agreement, GKK Manager shall not be permitted to terminate the Management Services Agreement prior to December 31, 2011, or otherwise cease managing the subject assets pursuant to the terms of the Management Services Agreement prior to December 31, 2011.  If the GKK Manager elects to terminate the Management Services Agreement effective as of December 31, 2011, it must notify Acquisition Co of such intended termination in writing by no later than October 1, 2011.  The GKK Manager shall not be permitted to distribute, dividend or make any other distributions to any Affiliate of GKK Manager on or prior to December 31, 2011, provided that GKK Manager shall be permitted to pay (or reimburse its Affiliates for) any and all of its direct expenses incurred in connection with its management services, including existing salaries and bonuses to employees servicing the Equity Interests.

 

 

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Section 5.7            FSMC Management Contracts; Assumption or Termination of FSMC Service Contracts .  During the term of the Management Services Agreement, other than "for cause" as defined therein, Acquisition Co shall not terminate, or permit any of the Transferred Interests to terminate, any of the FSMC Management Contracts.  On or prior to the expiration of the Management Services Agreement, Acquisition Co will elect to either assume or terminate at Acquisition Co's expense all FSMC Service Contracts and/or contracts between FSMC and vendors supporting the Transferred Interests that were disclosed in writing to KBS prior to the expiration of the Management Services Agreement, but only to the extent such contracts have been entered into with vendors that are unaffiliated with the Gramercy Entities and are unaffiliated with SL Green Realty Corp.

 

Section 5.8            Schwab Harborside Lease .  GKK Stars or its applicable designee, solely with the prior written consent of KBS or KBSAS, shall endeavor to negotiate the reduction of the obligations relating to FSIR and liabilities of FSG relating thereto, including, without limitation, the Schwab Harborside Lease and the outstanding letter of credit relating thereto and pursue the prosecution of potential claims relating thereto, provided, that all costs, obligations, damages, claims or liabilities of any kind in connection with the prosecution of such claims shall be the responsibility of, and shall be paid directly or promptly reimbursed by Newco in accordance with a budget reasonably approved by KBS or KBSAS.  Notwithstanding anything to the contrary stated above, immediately at the request of KBS or KBSAS, GKK Stars shall cease undertaking such negotiations.  The Guarantor shall also notify and direct the letter of credit provider to pay to KBS or KBSAS or their designee all cash held as security or otherwise for the letter of credit, which direction letter shall be in the form of Exhibit P hereto.  To the extent such cash is released to Guarantor or any Affiliate of Guarantor, a portion of such cash (sufficient to pay KBS and KBSAS the amounts payable to KBS and KBSAS pursuant to the next sentence) shall be held in trust for the benefit of KBS and KBSAS and shall be promptly remitted to them or their designee.  The parties agree that KBS and KBSAS, on the one hand, and GKK Stars, on the other hand, shall each receive 50% of all savings resulting from any such reductions of liability or obligations, including all amounts (net of all third party costs and expenses incurred in connection with the enforcement, prosecution and collection of such claims plus the funding of any shortfalls to the Sublandlord under the Master Sublease from funds other than the existing letter of credit) recovered as a result of the prosecution of such claims.

 

Section 5.9            Limitations on Newco and Subsidiaries' Debt .  None of Newco or its direct or indirect subsidiaries shall incur, in the aggregate, debt for borrowed money in excess of the Newco Debt Cap Amount, other than mortgage financing secured by (among other things) interests in real property and other than the Senior Mezzanine Loan.  KBS shall cause the outstanding balance of the Senior Mezzanine Loan to be reduced to the Newco Debt Cap Amount no later than March 15, 2012.  The limitations set forth in this Section 5.9 shall no longer apply and shall automatically become ineffective upon (i) the earlier to occur of the payment of the existing PB Capital Loan and the discharge or release in full of all of Newco's obligations and liabilities under the existing PB Capital Loan and (ii) the earlier to occur of the payment in full of the existing FSI Loan and the discharge or release in full of all of Newco's obligations and liabilities under the existing FSI Loan.

 

 

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Notwithstanding the foregoing, the condition in clause (i) above need not be satisfied as a condition to the limitations in this Section 5.9 no longer being effective if Newco or KBS Debt Holdings, LLC, as applicable, is not required to execute and does not execute the “wrap around” indemnity referenced in Section 6.2(b) herein.

 

Section 5.10          Costs .  In connection with any third party legal fees incurred by GKK Stars or any of its Affiliates in connection with this Agreement that are to be paid by KBS or any of its Affiliates under this Agreement, GKK Stars shall endeavor to provide KBS with (i) an estimated budget of such legal fees from the applicable third party counsel and (ii) updates to such budget, to the extent that there are any material changes while the subject legal work is being performed.

 

ARTICLE VI

 

ASSUMPTION OF CERTAIN MORTGAGE LOANS.

 

Section 6.1            FSI Loan

 

(a)          Lender hereby acknowledges and agrees that Affiliates of GKK Stars are lenders and/or secured parties under the $69,868,421.05 mortgage loan evidenced by that certain Substitute Loan Agreement A, dated as of September 11, 2008, among Gramercy Investment Trust (successor-in-interest to Deutsche Bank AG, Cayman Islands Branch), as Agent and Lender, LaSalle Bank National Association, as Collateral Agent (collectively, the " FSI Lender ") and First States Investors DB I, L.P., First States Investors DB I B, L.P., First States Investors 4200, LLC, First States Investors DB I SP, L.P. and First States Investors DB I TRS, L.P., as borrowers (as amended, the " FSI Loan "), that such Affiliates shall remain as lenders and/or secured parties on and after the Effective Date, and that the FSI Loan is in full force and effect as of the date hereof and will be in full force and effect on the Effective Date.

 

(b)          On the Effective Date, as additional collateral for the FSI Loan, Acquisition Co shall deliver or cause to be delivered to FSI Lender a pledge and security agreement in the form attached hereto as Exhibit G granting the FSI Lender a first priority security interest in and to the entities set forth in such pledge and security agreement (the " FSI Loan Entity Interests ").

 

 

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(c)          On the Effective Date, Newco shall deliver to FSI Lender a fully executed substitute replacement payment guaranty agreement, in the form set forth in Exhibit H-1 attached hereto (the " FSI Payment Guaranty "), and the Environmental Indemnity Agreement in the form set forth in Exhibit H-2 , attached hereto each pertaining solely to acts and circumstances occurring or arising on or after the Effective Date.  To the extent Acquisition Co has exercised its 12-month extension option set forth in clause (e) below, Newco shall be entitled to be released from the FSI Payment Guaranty provided that Newco executes and delivers to FSI Lender a "bad boy" guaranty in the form of Exhibit H-3 attached hereto.

 

(d)          On the Effective Date, Acquisition Co shall (i) pay to the FSI Lender an extension fee equal to 25 basis points on the unpaid principal balance of the FSI Loan, (ii) implement a "cash trap" of fifty percent (50%) of all excess cash flow (after debt service, operating expenses and budgeted reserves) generated by the FSI Loan borrower and (iii) implement a "cash trap" of fifty percent (50%) of all excess net sales proceeds (after applicable release prices and allowable third-party disposition expenses) in form acceptable to the FSI Lender (collectively (ii) and (iii) the " FSI Cash Trap ") all as more specifically provided for in that certain Amendment to Loan Agreement (the “ FSI LA Amendment ”) entered into by and between, among other parties, FSI Lender and the borrowers under the FSI Loan as of the Effective Date, the form of which FSI LA Amendment is attached hereto as Exhibit R .

 

(e)          Acquisition Co's obligations under clauses (b), (c) and (d) above shall be conditioned upon the FSI Lender's (i) consent to the Transfer of the FSI Loan Entity Interests to Acquisition Co and FSI Lender's modification of the FSI Loan to take into account that Acquisition Co, and not FSG or AFRT, is the indirect 100% owner of the FSI Loan borrowing entities to which reference is made in Section 6.1(b) above, (ii) acknowledgment that the FSI Loan is in full force and effect and that no default exists thereunder, (iii) extension of the maturity date of the FSI Loan for nine months from the maturity date of the FSI Loan at an interest rate equal to the current interest rate for the FSI Loan, (iv) granting Acquisition Co the option to extend the initial nine (9) month extension by an additional thirty (30) days (at the default rate of interest) upon five (5) business days notice to FSI Lender prior to the effective maturity date, (v) granting Acquisition Co the option to further extend the maturity date of the FSI Loan for an additional twelve (12) months upon the pay down by Acquisition Co of 20% of the then-outstanding principal amount of the FSI Loan, provided that no portion of such 20% pay down shall result from the sale or other disposition of any of the collateral for the FSI Loan, and satisfaction of the following additional conditions (A) no uncured default or event of default exists under the FSI Loan, (B) Acquisition Co shall have delivered written notice of such extension no later than thirty (30) days prior to the effective maturity date of the FSI Loan and (C) delivery of interest rate cap with a strike price of 4.5% in a form reasonably acceptable to GKK Stars, all as more particularly set forth in the FSI LA Amendment entered into by and between, among other parties, FSI Lender and the borrowers under the FSI Loan.

 

 

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Section 6.2            PB Capital Loan

 

(a)          Subject to Section 3.5(d) hereof, upon any Transfer by First States Group, L.P. of the Equity Interests (direct and indirect) in First States Investors 3300 B, LLC (" PB Capital Loan Entity ") to Acquisition Co (the " PB Capital Loan Entity Transfer "), Newco shall serve as a substitute guarantor for the non-recourse carve-out, interest rate protection and environmental guaranties (" PB Capital Loan Guaranties ") required under the mortgage loan to PB Capital Loan Entity (" PB Capital Loan "), it being understood that (i) Acquisition Co's provision of a substitute guarantor will be conditioned upon (i) Newco's approval of the PB Capital Loan Guaranties, which shall be deemed given if they are on substantially the same form as those attached hereto as Exhibits N-1, N-2 and N-3 , (ii) the PB Capital Loan lender's consent to the Transfer of the PB Capital Loan Entity interests to Acquisition Co and acknowledgment that the PB Capital Loan is in full force and effect and that no default exists thereunder, (iii) the exposure of Newco under the PB Capital Loan Guaranties being limited to actions or events occurring after the PB Capital Loan Entity Transfer, and (iv) PB Capital's modification of the PB Capital Loan to take into account that Acquisition Co, and not FSG or AFRT, is the indirect 100% owner of the PB Capital Loan Entity.

 

(b)          In the event that GKK Stars and its applicable Affiliates are not released in full from all obligations and liabilities under the existing PB Capital Loan Guaranties for the period of time after the date of the PB Capital Loan Entity Transfer, KBS Debt Holdings, LLC (or Newco, if KBS has granted GKK Stars the option to assign the Equity Interests in the PB Capital Loan Entity pursuant to Section 3.5(d) hereof and GKK Stars has elected not to exercise such option) will, concurrently with the PB Capital Loan Entity Transfer execute and deliver to GKK Stars and its applicable affiliates a "wrap-around" indemnity (in the form attached hereto as Exhibit M ) for Guarantor's in-place PB Capital Loan Guaranties with respect to actions or events occurring after the Equity Interests for the PB Capital Loan Entity are Transferred to Acquisition Co and, excluding, any event or any Losses caused by an affirmative action of GKK Stars or one of its Affiliates.

 

ARTICLE VII

 

REPRESENTATIONS OF THE LENDER.

 

Section 7.1           Each KBS Lender hereby, with respect to itself only, represents and warrants to GKK Stars that:  (i) the KBS Lender is duly and legally authorized to enter into this Agreement and to consummate the transactions contemplated hereby; (ii) the person executing this Agreement on behalf of the KBS Lender and any other document or instrument executed and delivered in connection with this Agreement has the full power and authority to execute and deliver all such documents and instruments and to cause the KBS Lender to perform any act which may be necessary pursuant to the terms of this Agreement; (iii) this Agreement and any documents executed by the KBS Lender in connection herewith constitute the legal, valid and binding obligations of the KBS Lender, enforceable against the KBS Lender in accordance with their terms, subject to bankruptcy, creditors' rights, and equitable principles; (iv) Goldman, or its affiliate, currently owns 48.2% of the Mortgage Loan  and 48.2% of the Junior Mezzanine Loan; (v) Citi, or its affiliate, currently owns 37.5% of the Mortgage Loan and 37.5% of the Junior Mezzanine Loan; (vi) KBSAS currently owns 14.3% of the Mortgage Loan and 14.3% of the Junior Mezzanine Loan; (vii) the KBS Lender has not sold, transferred or otherwise conveyed its interests in the Loans, other than the sale of the Senior Mezzanine to Goldman and Citi Financial pursuant to the KBS Master Repurchase Agreement, (viii) the KBS Lender has received the consent of Goldman and Citi Financial to enter into this Agreement, and (ix) it is a sophisticated party, acting without duress and upon the advice of its own independent counsel (which has advised such parties that its undertakings with respect to the transactions are fully enforceable).

 

 

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Section 7.2           Each of KBS Lender's representations and warranties expressed in the immediately prior Section shall survive for a period of six (6) months after the Outside Transfer Date and any action for a breach of any KBS Lender's representations and warranties expressed in the immediately prior Section must be made and filed within said six (6) month period unless GKK Stars is prevented from filing any such action by operation of law or judicial proceeding.

 

ARTICLE VIII

 

REPRESENTATIONS OF GKK STARS.

 

Section 8.1           GKK Stars hereby represents and warrants to Lender that:

 

(a)           GKK Stars is duly and legally authorized to enter into this Agreement and perform each of its obligations hereunder and has complied in all material respects with all laws, rules, regulations, and agreements to which it may be subject;

 

(b)           GKK Stars is duly authorized to act and be bound to the terms of this Agreement and all other documents and instruments to which it shall be a party as required by this Agreement;

 

(c)           the Affiliates of GKK Stars executing all documents and instruments required by this Agreement are duly and legally authorized to enter into all of such documents and perform their respective obligations under this Agreement and have complied in all material respects with all laws, rules, regulations, and agreements to which they may be subject;

 

(d)           this Agreement and any documents executed by GKK Stars and/or its Affiliates in connection herewith constitute the valid and legally binding obligations of GKK Stars and its Affiliates, respectively, enforceable in accordance with their terms, subject to bankruptcy, creditors' rights, and equitable principles;

 

(e)           GKK Stars owns 100% of the direct and indirect equity interests of each of the Equity Interests;

 

(f)           to its knowledge, GKK Stars has not heretofore sold, assigned, encumbered or otherwise disposed of, nor has Senior Mezzanine Borrower or Junior Mezzanine Borrower or any of their applicable subsidiaries (direct or indirect) sold, assigned, encumbered or otherwise disposed of, any assets without providing written notice to Lender as required by the terms of the Senior Mezzanine Loan Agreement or the Junior Mezzanine Loan Agreement;

 

 

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(g)           to its knowledge, GKK Stars has not incurred, nor has Senior Mezzanine Borrower or Junior Mezzanine Borrower or any of their applicable subsidiaries (direct or indirect) incurred, any debt for borrowed money other than the mortgage loan debt described in Schedule J attached hereto; and

 

(h)           GKK Stars does not, nor does Senior Mezzanine Borrower or Junior Mezzanine Borrower or any of their applicable subsidiaries (direct or indirect), have any employees, nor is GKK Stars, Senior Mezzanine Borrower, or Junior Mezzanine Borrower or any of their applicable subsidiaries (direct or indirect) party to any employment agreement.

 

(i)            to GKK Stars's knowledge, neither AFRT nor any of its direct or indirect subsidiaries is party to any contract or agreement with an Affiliate of GKK Stars and/or any Affiliate of SL Green Realty Corp., except as set forth on Schedule K attached hereto.

 

(j)            that GKK Stars and its Affiliates are each a sophisticated party, acting without duress and upon the advice of counsel (which has advised such parties that its undertakings with respect to the transactions are fully enforceable).

 

Section 8.2           Each of GKK Stars's representations and warranties expressed in the immediately prior Section shall survive for a period of six (6) months after the Outside Transfer Date and any action for a breach of any GKK Star's representations and warranties expressed in the immediately prior Section must be made and filed within said six (6) month period unless KBS is prevented from filing any such action by operation of law, court order or other judicial action.

 

ARTICLE IX

 

BREACH EVENTS; REMEDIES FOLLOWING A BREACH EVENT

 

Section 9.1            Breach Events .  A "Breach Event" shall have occurred upon the occurrence of any one of the following acts or events:

 

(a)           the failure of GKK Stars or any of its Affiliates and/or subsidiaries (direct or indirect) to comply with the provisions of Sections 3.5, 3.7(a), 3.7(c), 5.1, 5.2, 5.3 or clauses (a)(i) and (d) of Section 5.4 or Section 5.8 (as to the notification of the letter of credit provider referenced therein and as to the remittance to Newco of the cash referred to herein ) of this Agreement, or

 

 

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(b)           the failure of GKK Stars or any of its Affiliates and/or subsidiaries (direct or indirect) to comply with the provisions of Sections 3.6, 3.7(b), 3.8 or clauses (a)(ii), (b) and (c) of Section 5.4 , or

 

(c)           any intentional and material misrepresentation or breach of warranty by GKK Stars under this Agreement, or

 

(d)           subject to compliance by KBS with the provisions of Section 3.5(d) of this Agreement with respect to any Transfer of the Equity Interests in the PB Capital Loan Entity, GKK Stars or any of its Affiliates and/or subsidiaries (direct or indirect) asserts in writing to KBS or any third party that any document signed by KBS through a power of attorney provided by GKK Stars or any of its Affiliates and/or subsidiaries (direct or indirect) in connection with a Transfer or enforcing a remedy solely for the purposes of foreclosing on, or effectuating the Transfer of, collateral for the Senior Mezzanine Loan, or that any Transfer Instrument executed by GKK Stars or any of its Affiliates and/or subsidiaries (direct or indirect) is unauthorized, unenforceable or invalid, or

 

(e)            the occurrence of any Voluntary Proceeding, or

 

(f)            GKK Stars or any of its Affiliates and/or subsidiaries (direct or indirect) seek to challenge, disaffirm or otherwise repudiate any of KBS's rights under this Agreement, or

 

(g)           the failure of GKK Stars or any of its Affiliates to comply with the provisions of Section 5.6 of this Agreement.

 

Section 9.2            Remedies Following the Occurrence of a Breach Event .  Upon the occurrence of a Breach Event, the following remedies shall be available to KBS, KBSAS and Newco: as to all damages, losses, costs or expenses (hereinafter referred to as " Losses ") incurred by KBS, KBSAS and Newco in connection with any Breach Event, KBS, KBSAS and Newco shall be entitled to (i) offset against any and all amounts then and thereafter owing under the Management Services Agreement the amount of such Losses, (ii) the return from GKK Stars (or its designated affiliate that enters into the Management Services Agreement) of all amounts accrued and paid under the Management Services Agreement after the Effective Date up to the amount of such Losses, and (iii) pursue GKK Stars for any of such Losses and pursue Guarantor for such Losses under the terms of the Gramercy Back-Up Guaranty.  Upon the occurrence of a Breach Event referenced in Section 9.1(e) of this Agreement only, KBS, KBSAS and Newco shall be entitled to enforce the Amended and Restated Carveout Guaranty.  To the extent that the remedy referenced in the prior sentence is exercised, (A) the Gramercy Releases shall remain in full force and effect, except as set forth in the prior sentence, (B) notwithstanding the execution and delivery of the Lender Releases, GKK Stars shall retain any defenses available to any Gramercy Entity against any claims under the Amended and Restated Carveout Guaranty and (C) except as otherwise set forth in the prior clause (B) the Lender Releases shall remain in full force and effect.

 

 

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Section 9.3           Notwithstanding anything stated to the contrary in Section 9.2 above, the remedy set forth in Sections 9.2 above shall not be available unless KBS has first notified GKK Stars in writing of the applicable Breach Event and GKK Stars fails to cause such Breach Event to be cured within fifteen (15) business days following delivery of such written notice and, in addition, such Breach Event continues to remain uncured for an additional period of five (5) business days following delivery by KBS to GKK Stars of a second written notice delivered to GKK Stars following the expiration of the fifteen (15) business day period referred to above, except for the Breach Events set forth in Section 9.1(e) above, for which no Breach Event Notice shall be required and no opportunity to cure shall be provided.  KBS shall be deemed to have irrevocably waived a Breach Event if KBS or its nominee fails to commence an action to enforce the applicable alleged Breach Event by March 15, 2012, unless KBS or its nominee is prevented by operation of law, court order or other judicial action from commencing and/or pursuing such action at any time prior to such date, in which case, such waiver shall not be deemed to have occurred until ten (10) business days after the date that KBS is permitted to commence any such action.

 

Section 9.4           Intentionally Omitted.

 

Section 9.5           Notwithstanding that a Breach Event has occurred and is continuing, (a) neither KBSAS nor Acquisition Co shall be relieved of its obligation to take an assignment of all Equity Interests in accordance with the terms of this Agreement, unless  KBSAS, Acquisition Co or its nominee is prevented by operation of law or judicial proceeding from taking any assignment of such Equity Interests, and (b) neither GKK Stars nor its Affiliates shall be relieved of any of their obligations under this Agreement.

 

ARTICLE X

 

BANKRUPTCY-RELATED PROVISIONS.

 

Section 10.1         For purposes of this Article X, (a) the term "GKK Stars" shall mean GKK Stars Acquisition LLC and its subsidiaries and (b) the term "Proceeding" shall mean any proceeding, whether voluntary or involuntary, against GKK Stars or its direct or indirect subsidiaries for relief, protection, reorganization, liquidation, dissolution, or similar relief for debtors under any local, state, federal, or other insolvency law or laws providing relief for debtors, including but not limited to a case under Title 11 of the United States Code, as amended (the " Bankruptcy Code "), the appointment of a receiver, trustee, custodian, or other similar official for GKK Stars or for all or any substantial part of its assets, a general assignment for the benefit of creditors, or any proceeding seeking issuance of a warrant of attachment, execution, distraint, or similar process against all or any substantial part of GKK Star's assets.

 

 

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Section 10.2         GKK Stars and its attorneys have engaged in thorough and extensive settlement negotiations with the Lender and its attorneys immediately preceding and resulting in the execution of this Agreement.  All of those settlement negotiations have been completed, and are merged into this Agreement, which states, as a full, complete, express and unambiguous integrated agreement, the precise agreement of GKK Stars and the Lender.  GKK Stars acknowledges that it is receiving substantial benefits as a consequence of this Agreement and the other documents contemplated or required hereunder.  GKK Stars and the Lender hereby confirm that all sections of this Agreement, including but not limited this Article X, are material to the Lender's willingness to enter into or join this Agreement and without such sections the Lender would not enter into or join this Agreement or the releases granted herein.  The Lender is entering into or joining this Agreement upon the assurance by GKK Stars that a complete relinquishment, return, and transfer of properties to the Lender as specifically set forth herein, including pursuant to Section 3.5 hereof, cannot and will not be delayed, avoided, modified, or extended by any device whatsoever.  Without those explicit assurances from GKK Stars, the Lender would refuse to enter into or join this Agreement, it would not grant any of the financial accommodations provided in this Agreement, and it would proceed immediately and vigorously to enforce its rights in foreclosure proceedings, in any action involving a receiver for the Transferred Interests, and in whatever other litigation proceedings it has chosen to prosecute.  GKK Stars acknowledges that the filing of any Voluntary Proceeding would be a Breach Event as set forth in Section 9.1(e) of this Agreement.  GKK Stars has no intent to file or cause the filing or commencement of any Proceeding with respect to it, or cause the Transferred Interests or any portion of any interest of GKK Stars in the Transferred Interests to become the property of any bankruptcy estate or the subject of any Proceeding at any time hereafter.  In the event an involuntary Proceeding is commenced against GKK Stars, GKK Stars shall use commercially reasonable efforts to contest and obtain the dismissal of the same.  If, in any event, GKK Stars shall become the subject of a Proceeding the following shall apply:

 

(i)           Notwithstanding such Proceeding, this Agreement will govern and control all dealings between and among the Lender and GKK Stars with respect to every matter that is the subject of this Agreement;

 

(ii)          GKK Stars, to the fullest extent permitted by law, irrevocably and unconditionally consents to the Lender seeking relief from any automatic stay or other form of creditor restraint imposed by Section 105 and/or 362 of the Bankruptcy Code, or otherwise, and further consents to the Lender's receipt of such relief, on or against the exercise of the rights and remedies otherwise available to the Lender, provided that the Lender exercises its rights and remedies following relief from any stay in a manner consistent with this Agreement;

 

(iii)         GKK Stars acknowledges and agrees that it shall not be entitled to use, and will not request use of or support the motion of any other party-in-interest seeking GKK Stars's use of, cash collateral of the Lender without consent of the Lender and will not take any action inconsistent with any rental revenue absolutely and unconditionally assigned to the Lender;

 

(iv)         The Lender may seek entry of an order deeming this Agreement as a "so ordered" stipulation between the Lender and GKK Stars with respect to the matters governed hereby;

 

 

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(v)          To the extent it is determined in any Proceeding, whether under Section 552(a) of the Bankruptcy Code or otherwise, that Lender's interest under the Loan, Loan Agreement, Loan Documents, or this Agreement, do not create a continuing post-bankruptcy interest in all leases, letting, or rental agreements for the use of the real properties indirectly owned through the Transferred Interests entered into after the filing of the petition or the order for relief, whichever is later, GKK Stars hereby grants Lender a post-bankruptcy security interest in such property and, at Lender's expense, shall use commercially reasonable efforts to obtain court approval of such grant as expeditiously as possible.  If an order is in effect permitting GKK Stars to use cash collateral, GKK Stars shall, to the extent of funds available after satisfaction of property level obligation and costs of administration,  (i) maintain  at all times (without duplication) insurance as required under the Loan Agreement or the Loan Documents, naming the Lender as a loss payee as its interest may appear and (ii) pay adequate protection payments each month on the principal outstanding under the Loan Agreement at the rate set forth in the Loan Agreement and the Loan Documents;

 

(vi)         The provisions of this section shall survive termination of this Agreement;

 

(vii)        GKK Stars will not contest any proof of claim filed by the Lender;

 

(viii)       GKK Stars will not seek to reclassify the debt owed to Lender or treat such debt owed to Lender as impaired the under Section 1124 of the Bankruptcy Code;

 

(ix)          This Agreement is executed voluntarily and not pursuant to any duress;

 

(x)          The transfers and conveyances made pursuant to this Agreement (A) are not intended to hinder, defraud, or delay any creditors of GKK Stars and (B) are for fair consideration and are for reasonably equivalent and contemporaneous value;

 

(xi)         The Lender is not an insider of GKK Stars within the meaning of Section 101(31) of the Bankruptcy Code; and

 

(xii)        As of the date that each Equity Interest is Transferred, GKK Stars shall be deemed to have no interest of any kind (legal or equitable) in the applicable Transferred Interest.

 

 

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Section 10.3         Notwithstanding anything to the contrary in this Agreement, if and to the extent that any transfer of assets agreed upon herein between GKK Stars and the Lender, or the Transfer of the Transferred Interests to Acquisition Co or KBSAS, as applicable, is later determined to have been a voidable preferential transfer, a fraudulent transfer, or a fraudulent conveyance, under state and/or federal law, and as a result thereof either (a) additional consideration for the transfer and any additional amounts of fees, expenses, interest, or other affirmative damages (the " Additional Payments ") become due and owing to GKK Stars from the Lender, KBSAS and/or Acquisition Co, as the case may be, or (b) the transfer must be undone and all or a portion of the assets must be returned to GKK Stars for any reason whatsoever, then notwithstanding anything to the contrary herein:  (i) any and all rights and/or obligations owed to the Lender, KBSAS and/or Acquisition Co, as the case may be, and any and all remedies available to the Lender, KBSAS and/or Acquisition Co, as the case may be, under the terms of the Loan Agreement, the Loan Documents, or in law or equity against GKK Stars and/or the Transferred Interests shall be available to the Lender to the extent of any Additional Payments owed or transfers unwound; and (ii) the Lender and/or Acquisition Co, as the case may be, shall be entitled to file a proof of claim against the estate to recover either: (x) the entire then outstanding principal amount of the Loan, plus any accrued but unpaid interest thereon and other costs, expenses, additional amounts, and other items which GKK Stars is obligated to pay (or repay, as the case may be) to the Lender pursuant to the Loan Agreement, the Loan Documents, or this Agreement, and the amount of the Additional Payments or (y) if the transfer has been undone and the assets returned in whole or in part to GKK Stars, the value of the consideration for those assets returned that was paid to or received by GKK Stars in the initial asset transfer, plus in each case any deferred interest from the date of the disgorgement to the date of distribution to the Lender in any bankruptcy, insolvency, receivership, or fraudulent conveyance or fraudulent transfer Proceeding, and any costs and expenses due and owing.  The parties acknowledge and agree that the provisions in this section shall be independent of the indemnification obligations contained in this Agreement.

 

Section 10.4         The parties to this Agreement acknowledge and agree that the funding of any obligation by KBS hereunder constitutes a financial accommodation pursuant to Section 365 of the Bankruptcy Code and, upon the filing of a Proceeding, KBS shall have no further obligation to continue any such funding.

 

ARTICLE XI

 

MISCELLANEOUS

 

Section 11.1          Section Headings . The section headings herein are for convenience of reference only and shall not affect the construction hereof.

 

Section 11.2          Severability .  If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, that provision shall be deemed severed from this Agreement and the validity, legality of enforceability of the remaining provisions or obligations shall remain in full force as though invalid, illegal or unenforceable provision had never been a part of this Agreement.

 

 

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Section 11.3          Governing Law .  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without regard to choice of law rules and without the reference to any rule, custom or canon requiring construction against the draftsman.

 

Section 11.4          Modification; Waivers .  This Agreement may not be amended or modified except by an agreement in writing executed by all parties to this Agreement, and no provision of this Agreement may be waived except by a waiver in writing signed by the party against whom the waiver is asserted.  Any such waiver shall be a waiver only with respect to the specific instance involved and shall in no way impair the right of the party making the waiver or, unless otherwise agreed, the obligation of the other party to such party in any other respect or at any other time.

 

Section 11.5          Expenses .  Except as otherwise expressly provided in this Agreement, none of the parties referenced herein will be obligated to pay any of the fees or costs incurred by the other party in connection with the transaction contemplated herein.  All third party fees owed to third party lenders and Lender as a result of any restructure of their mortgage loan in connection with any Transfer under this Agreement will be paid by KBSAS.  GKK Stars shall pay or cause to be paid all GKK Transaction Expenses which have been incurred by GKK Stars or its Affiliates on or prior to July 8, 2011, out of cash flow generated by the properties owned by subsidiaries of AFRT.  Guarantor (and not AFRT) shall be responsible for and pay (and GKK Stars shall cause Guarantor to pay) the Guarantor Allocation of the GKK Transaction Expenses after July 8, 2011, in an amount not to exceed the Guarantor Allocation.  Any GKK Transaction Expenses incurred after July 8, 2011, that are in excess of the Guarantor Allocation, shall be paid by AFRT out of cash flow generated by the properties owned by subsidiaries of AFRT.  Each of KBS and GKK Stars shall provide the other one with a schedule of its monthly fees, no later than the 20 th day following the end of each Billing Period and shall provide bills supporting such schedule within five (5) business days of request, except that such schedule shall not be required to show the detail of the legal tasks taken for such legal fees, but shall reflect the timekeepers name, hours billed during the Billing Period, hourly rate, and whether the timekeeper is an associate, partner, paralegal or otherwise.   KBSAS, and not GKK Stars, shall be responsible for paying all fees, costs and expenses incurred by KBSAS or Acquisition Co in connection with the Transfer of the Equity Interests and all fees, costs and expenses required to be paid to third parties (provided such third parties are not engaged by GKK Stars or its Affiliates or its subsidiaries (direct or indirect)), including the Lender and any of the underlying mortgage lenders in connection with the Transfers contemplated hereby.  Notwithstanding anything stated to the contrary in this Section 11.5 , GKK Transaction Expenses and the KBS Transaction Expense Amount shall not include any legal fees incurred by any of the parties hereto or their Affiliates in filing (or preparing for, or considering filing) any action, judicial proceeding or other proceeding against the other or otherwise.

 

Section 11.6          Counterparts .  This Agreement may be executed in any number of counterparts (whether original, facsimile or portable document format), each of which when executed and delivered shall be deemed to be an original and all such counterparts together shall constitute one and the same instrument.

 

 

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Section 11.7          Successors and Assigns .  All of the covenants, agreements and provisions contained in this Agreement shall be binding upon all of the parties hereto and their respective heirs, representatives, administrators, successors and assigns and shall inure to the benefit of the Lender and their respective successors and assigns; provided, however, the provisions of the second sentence of Section 9.2 may not be assigned, transferred or otherwise conveyed, whether directly or indirectly, by any party hereto, other than to Goldman or Citi Financial or their successors and assigns with respect to the KBS Master Repurchase Agreement (or any replacement financing facility with respect to the Transferred Interests provided by Goldman or Citi Financial).

 

Section 11.8          JURY TRIAL WAIVER .   EACH OF THE PARTIES, FOR ITSELF AND ALL PERSONS CLAIMING BY, THROUGH OR UNDER IT, HEREBY EXPRESSLY, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION: (A) ARISING UNDER THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION THEREOF; OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT (AS NOW OR HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; EACH OF THE PARTIES ACKNOWLEDGES THAT IT HAS CONSULTED WITH LEGAL COUNSEL REGARDING THE MEANING OF THIS WAIVER AND ACKNOWLEDGES THAT THIS WAIVER IS AN ESSENTIAL INDUCEMENT FOR THE OTHER EXECUTING THIS AGREEMENT.  THIS WAIVER SHALL SURVIVE THE REPAYMENT OR OTHER SATISFACTION OF THE  LOANS.

 

Section 11.9          Exclusive Jurisdiction and Venue .  Any legal suit, action or proceeding arising out of or relating to this Agreement may at the instituting party's option be instituted in any Federal Court (or if the Federal Court does not have jurisdiction, State Court) in the City of New York, County of New York, pursuant to Section 5-1402 of the New York General Obligations Law and each party hereto waives any objections which it may now or hereafter have based on venue and/or forum non conveniens of any such suit, action or proceeding, and each party hereto hereby irrevocably submits to the sole and exclusive jurisdiction of any such court in any suit, action or proceeding .

 

Section 11.10        Notices .  Each notice, demand, election or request provided for or permitted to be given pursuant to this Agreement (a " Notice ") must be in writing and shall be deemed to have been properly given or served by personal delivery or by sending same by overnight courier or by depositing same in the United States Mail, postage prepaid and registered or certified, return receipt requested, or by telecopy and addressed as follows:

 

 

33


 

 

GKK Stars:

  

GKK Stars Acquisition LLC

420 Lexington Avenue

New York, New York 10170

Attention:  Roger M. Cozzi and Jon Clark

Facsimile No.: (212) 297-1090

 

with a copy to:

  

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Attention: Harvey R. Uris, Esq.

Facsimile No.: (917) 777-2212

 

If to KBS, KBSAS and Newco:

  

c/o KBS Capital Advisors LLC

620 Newport Center Drive, Suite 1300

Newport Beach, CA 92660

Attention:  Mr. Keith Hall and Mr. David Snyder

Facsimile No.:  (949) 417-6518

 

with a copy to:

 

Greenberg Traurig, LLP

3161 Michelson Drive

Suite 1000

Irvine, CA 92612

Attention: L. Bruce Fischer, Esq.

Facsimile No.: (949) 732-6501

 

Each Notice shall be effective upon being personally delivered or upon being sent by overnight courier, telecopy, email or upon being deposited in the United States Mail as aforesaid.

 

Section 11.11       Any of the parties hereto may furnish such information as is requested in connection with a subpoena, deposition, request for documents, civil investigation demand or similar process only after (i) promptly notifying the other parties in writing of the request, (ii) consulting with each other party on the advisability of taking steps to resist or narrow such request, and (iii) assisting the other party (at the other party's expense) in seeking a protective order or a then appropriate remedy.  In the event that a protective order or other remedy is not obtained, or the other party waives compliance, a party may disclose only that portion of the information which such party's legal counsel advises that it is legally bound to disclose.

 

 

34


 

 

Section 11.12       Notwithstanding anything stated to the contrary in this Agreement, GKK Stars acknowledges and agrees that Citi Financial and Goldman, collectively, shall have the standing to enforce the provisions of this Agreement, and shall be entitled to all of the rights and benefits afforded the Senior Mezzanine Lender and/or KBS under this Agreement, to the extent Citi Financial and Goldman provide notice to GKK Stars (with a copy to KBS) that they are enforcing their rights under the terms and conditions of the KBS Master Repurchase Agreement.  To the extent such notice is provided to GKK Stars, none of KBS or its Affiliates shall have the right to enforce the provisions of this Agreement or be entitled to any of the rights and benefits under this Agreement (other than the releases delivered to KBS and/or its Affiliates pursuant to the terms of this Agreement, which shall remain effective) unless and until GKK Stars receives a notice from Citi Financial and Goldman that such rights have been vested again with KBS and its Affiliates.

 

Section 11.13       Each of the parties hereto acknowledges that it has received the advice of competent legal counsel prior to signing this Agreement, and each of the parties to this Agreement are executing this Agreement voluntarily, with full knowledge of its significance.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

35


 

 

IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be duly executed and sealed as of the day and year first above written.

 

GKK STARS :

 

GKK STARS ACQUISITION LLC ,

 

a Delaware limited liability company

 

 

 

 

By:

/s/ Roger Cozzi

 

 

Name:

Roger Cozzi

 

 

Title:

Chief Executive Officer

 

 

[Signatures Continue on Next Page]

 

 

 


 

 

MORTGAGE LENDER :

 

KBS ACQUISITION SUB, LLC,

a Delaware limited liability company,

in its capacity as a Mortgage Lender

 

 

By:

KBS ACQUISITION HOLDINGS, LLC,

 

a Delaware limited liability company,

 

its sole member

 

 

 

 

By:

KBS GKK PARTICIPATION HOLDINGS I, LLC,

 

 

a Delaware limited liability company,

 

 

its sole member

 

 

 

 

 

By:

KBS DEBT HOLDINGS, LLC,

 

 

 

a Delaware limited liability company,

 

 

 

its sole member

 

 

 

 

 

 

 

By:

KBS LIMITED PARTNERSHIP,

 

 

 

 

a Delaware limited partnership,

 

 

 

 

its manager

 

 

 

 

 

 

 

 

 

By:

KBS REAL ESTATE INVESTMENT TRUST, INC.,

 

 

 

 

 

a Maryland corporation,

 

 

 

 

 

its sole general partner

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ David E. Snyder

 

 

 

 

 

 

 

David E. Snyder

 

 

 

 

 

 

 

Chief Financial Officer

 

 

[Signatures Continue on Next Page]

 

 

 


 

 

SENIOR MEZZANINE LENDER :

 

KBS DEBT HOLDINGS MEZZ HOLDER, LLC,

a Delaware limited liability company

 

 

By:

KBS DEBT HOLDINGS, LLC,

 

a Delaware limited liability company,

 

its sole member

 

 

 

By:

KBS LIMITED PARTNERSHIP,

 

 

a Delaware limited partnership,

 

 

its manager

 

 

 

 

 

By:

KBS REAL ESTATE INVESTMENT TRUST, INC.,

 

 

 

a Maryland corporation,

 

 

 

its sole general partner

 

 

 

 

 

 

 

By:

/s/ David E. Snyder

 

 

 

 

 

David E. Snyder

 

 

 

 

 

Chief Financial Officer

 

 

[Signatures Continue on Next Page]

 

 

 


 

  

KBS GKK PARTICIPATION HOLDINGS I, LLC,

a Delaware limited liability company

 

 

By:

KBS DEBT HOLDINGS, LLC,

 

a Delaware limited liability company,

 

its sole member

 

 

 

By:

KBS LIMITED PARTNERSHIP,

 

 

a Delaware limited partnership,

 

 

its manager

 

 

 

 

 

By:

KBS REAL ESTATE INVESTMENT TRUST, INC.,

 

 

 

a Maryland corporation,

 

 

 

its sole general partner

 

 

 

 

 

 

 

By:

/s/ David E. Snyder

 

 

 

 

 

David E. Snyder

 

 

 

 

 

Chief Financial Officer

 

 

[Signatures Continue on Next Page]

 

 

 


 

  

KBS GKK PARTICIPATION HOLDINGS II, LLC,

a Delaware limited liability company

 

 

By:

KBS DEBT HOLDINGS, LLC,

 

a Delaware limited liability company,

 

its sole member

 

 

 

By:

KBS LIMITED PARTNERSHIP,

 

 

a Delaware limited partnership,

 

 

its manager

 

 

 

 

 

By:

KBS REAL ESTATE INVESTMENT TRUST, INC.,

 

 

 

a Maryland corporation,

 

 

 

its sole general partner

 

 

 

 

 

 

 

By:

/s/ David E. Snyder

 

 

 

 

 

David E. Snyder

 

 

 

 

 

Chief Financial Officer

 

 

[Signatures Continue on Next Page]

 

 

 


 

  

JUNIOR MEZZANINE LENDER :

 

KBS ACQUISITION SUB, LLC,

a Delaware limited liability company,

in its capacity as a Junior Mezzanine Lender

 

 

By:

KBS ACQUISITION HOLDINGS, LLC,

 

a Delaware limited liability company,

 

its sole member

 

 

 

By:

KBS GKK PARTICIPATION HOLDINGS I, LLC,

 

 

a Delaware limited liability company,

 

 

its sole member

 

 

 

 

 

By:

KBS DEBT HOLDINGS, LLC,

 

 

 

a Delaware limited liability company,

 

 

 

its sole member

 

 

 

 

 

 

 

By:

KBS LIMITED PARTNERSHIP,

 

 

 

 

a Delaware limited partnership,

 

 

 

 

its manager

 

 

 

 

 

 

 

 

 

By:

KBS REAL ESTATE INVESTMENT TRUST, INC.,

 

 

 

 

 

a Maryland corporation,

 

 

 

 

 

its sole general partner

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ David E. Snyder

 

 

 

 

 

 

 

David E. Snyder

 

 

 

 

 

 

 

Chief Financial Officer

 

 

[Signatures Continue on Next Page]

 

 

 


 

  

NEWCO :

 

KBS ACQUISITION HOLDINGS, LLC,

a Delaware limited liability company

 

By:

KBS GKK PARTICIPATION HOLDINGS I, LLC,

 

a Delaware limited liability company,

 

its sole member

 

 

 

By:

KBS DEBT HOLDINGS, LLC,

 

 

a Delaware limited liability company,

 

 

its sole member

 

 

 

 

 

By:

KBS LIMITED PARTNERSHIP,

 

 

 

a Delaware limited partnership,

 

 

 

its manager

 

 

 

 

 

 

 

By:

KBS REAL ESTATE INVESTMENT TRUST, INC.,

 

 

 

 

a Maryland corporation,

 

 

 

 

its sole general partner

 

 

 

 

 

 

 

 

 

By:

/s/ David E. Snyder

 

 

 

 

 

 

David E. Snyder

 

 

 

 

 

 

Chief Financial Officer

 

 

 

 


 

 

JOINDER

 

KBS Debt Holdings, LLC hereby acknowledges and agrees that (i) it has received and reviewed a complete copy of this Settlement Agreement, and (ii) upon execution of this Joinder, it shall become a party to this Settlement Agreement with regards to Sections 3.5(d) and 6.2(b) (the " Joinder Sections "), and shall be fully bound by, and subject to, all of the covenants, terms and conditions of the Joinder Sections as though an original party to this Settlement Agreement.

 

[No Further Text on this Page, Signature Page Follows]

 

 

43


 

 

KBS DEBT HOLDINGS, LLC,

a Delaware limited liability company,

its sole member

 

 

By:

KBS LIMITED PARTNERSHIP,

 

 

a Delaware limited partnership,

 

 

its manager

 

 

 

 

 

By:

KBS REAL ESTATE INVESTMENT TRUST, INC.,

 

 

 

a Maryland corporation,

 

 

 

its sole general partner

 

 

 

 

 

 

 

By:

/s/ David E. Snyder

 

 

 

 

 

David E. Snyder

 

 

 

 

 

Chief Financial Officer

 

 

 

44


 

 

LIST OF SCHEDULES AND EXHIBITS

 

Schedule A

-

Mortgage Borrower

 

 

 

Schedule B

-

Senior Mezzanine Borrower

 

 

 

Schedule C

-

List of Due Diligence Documents; List of Key Dates

 

 

 

Schedule D

-

Intentionally Omitted

 

 

 

Schedule E

-

Management Services Agreement Terms

 

 

 

Schedule F

-

FSMC Contracts to be Assumed or Terminated by Acquisition Co

 

 

 

Schedule G

-

Partial Satisfaction Amount and Aggregate Satisfaction Amounts

 

 

 

Schedule H

-

Intentionally Omitted

 

 

 

Schedule I

-

Equity Interests

 

 

 

Schedule J

-

Mortgage Loan Debt

 

 

 

Schedule K

-

Affiliate Contracts

 

 

 

Schedule L

-

Intentionally Omitted

 

 

 

Schedule M    

-

FSMC Management Contracts

 

 

 

Schedule N

 

Intentionally Omitted

 

 

 

Exhibit A

-

Form of Assignment and Assumption

 

 

 

Exhibit B

-

Form of Release of Lender

 

 

 

Exhibit C-1

-

Form of Lender Release of Guarantor

 

 

 

Exhibit C-2

-

Form of Lender Release of Junior Mezzanine Borrowers, AFR Owner and Dana Owner

 

 

 

Exhibit C-3

-

Intentionally Omitted

 

 

 

Exhibit D-1

-

Form of General Release of Gramercy Entities

 

 

 

Exhibit D-2

-

Form of Gramercy Release of Transferred Entities

 

 

 

Exhibit E

-

Form of Gramercy Back-Up Guaranty Agreement

 

 

 

Exhibit F

-

Intentionally Omitted

 

 

 

Exhibit G

-

Form of Pledge and Security Agreement (FSI Equity Pledge)

 

 

 

Exhibit H-1

-

Form of Payment Guaranty

 

 

 

Exhibit H-2

-

Form of Environmental Indemnity Agreement

 

 

 

Exhibit H-3

-

Form of FSI Bad Boy Guaranty

 

 

 

Exhibit I

-

Form of Consent and Authorization

 

 

 

Exhibit J

-

Form of Transfer Acceptance Certificate

 

 

 

Exhibit K

-

Intentionally Omitted

 

 

 

Exhibit L

-

Form of Resignation

 

 

 


 

  

Exhibit M

-

Form of PB Capital Wrap-Around Indemnity

 

 

 

Exhibit N-1      

-

Form of PB Capital Carveout Guaranty

 

 

 

Exhibit N-2

-

Form of Interest Rate Protection Guaranty

 

 

 

Exhibit N-3

-

Form of Environmental Guaranty

 

 

 

Exhibit O

-

Amended and Restated Carveout Guaranty

 

 

 

Exhibit P

-

Form of Letter to LOC Bank

 

 

 

Exhibit R

-

Form of FSI LA Amendment

 

 

2


 

 

Schedule A

 

(See Attached)

 

 

 


 

 

Schedule A

Mortgage Borrower

 

1. Dresher Court Realty, L.P.

2. First States Investors 105, LLC (PA)

3. First States Investors 107, LLC (AR)

4. First States Investors 117, LLC (FL)

5. First States Investors 118, LLC (FL)

6. First States Investors 147, LLC (IA)

7. First States Investors 154, LLC (NJ)

8. First States Investors 157, LLC (NJ)

9. First States Investors 2017, LLC

10. First States Investors 2100, L.P. (NC)

11. First States Investors 2102, L.P. (NC)

12. First States Investors 2103, L.P. (NC)

13. First States Investors 2104, L.P. (NC)

14. First States Investors 2105, L.P. (NC)

15. First States Investors 2106, L.P. (NC)

16. First States Investors 2107, L.P. (NC)

17. First States Investors 2108, L.P. (NC)

18. First States Investors 2110, LLC (VA)

19. First States Investors 2208, LLC (DE)

20. First States Investors 230, L.P. (NC)

21. First States Investors 2550A, LLC (DE)

22. First States Investors 3004, Limited Partnership (FL)

23. First States Investors 3014, LLC (GA)

24. First States Investors 3022, L.P. (NC)

25. First States Investors 3024, L.P. (NC)

26. First States Investors 3028, L.P. (NC)

27. First States Investors 3033, L.P. (NC)

28. First States Investors 3034, LLC (SC)

29. First States Investors 3035, LLC (SC)

30. First States Investors 3043, LLC (SC)

31. First States Investors 3048, LLC (VA)

32. First States Investors 3061, LLC (NJ)

33. First States Investors 3067, LLC (VA)

34. First States Investors 3076, LLC (GA)

35. First States Investors 3077, LLC (GA)

36. First States Investors 3081, Limited Partnership

37. First States Investors 3086, LLC (PA)

38. First States Investors 3087, LLC (VA)

39. First States Investors 3089, LLC (VA)

40. First States Investors 3090, LLC (FL)

41. First States Investors 3091, LLC (GA)

42. First States Investors 3093, LLC (VA)

 

 

 


 

 

43. First States Investors 3098, LLC (VA)

44. First States Investors 3099, LLC (VA)

45. First States Investors 3103, LLC (GA)

46. First States Investors 3108, LLC (NJ)

47. First States Investors 3114, LLC (TN)

48. First States Investors 3151, LLC (FL)

49. First States Investors 3179, Limited Partnership (DE)

50. First States Investors 3187, Limited Partnership (DE)

51. First States Investors 3195, L.P. (TX)

52. First States Investors 3300, LLC

53. First States Investors 3601, LLC (FL)

54. First States Investors 3632, LLC (FL)

55. First States Investors 3642, LLC (NJ)

56. First States Investors 3647, L.P. (PA)

57. First States Investors 40, LLC (MO)

58. First States Investors 4000C, LLC (DE)

59. First States Investors 4029, LLC (DE)

60. First States Investors 4043, LLC (GA)

61. First States Investors 4044, LLC (DE)

62. First States Investors 4048, LLC (DE)

63. First States Investors 4055, LLC (DE)

64. First States Investors 4062, LLC (DE)

65. First States Investors 4067, LLC (DE)

66. First States Investors 4081, LLC (DE)

67. First States Investors 4085, LLC (DE)

68. First States Investors 4100B, L.P. (DE)

69. First States Investors 4150, LLC (DE)

70. First States Investors 4413, LLC (DE)

71. First States Investors 4499, LLC (DE)

72. First States Investors 4500, LLC (DE)

73. First States Investors 5000B, LLC (DE)

74. First States Investors 77, Limited Partnership (FL)

75. First States Investors 922, LLC (IL)

76. First States Investors 923, L.P. (DE)

77. First States Investors 926 L.P.

78. First States Investors 927, LLC (DE)

79. First States Investors Branch One, L.P. (DE)

80. First States Investors GS Pool A, L.P. (DE)

81. First States Investors GS Pool B, L.P. (DE)

82. First States Investors GS Pool C, L.P.

83. First States Investors Realty, LLC (DE)

84. First States Partners No. 201, L.P.

85. First States Partners No. 203, LLC (NJ)

86. First States Partners No. 213, LLC (NJ)

87. First States Partners No. 216, L.P. (PA)

88. First States Partners No. 236 L.P. (PA)

 

 

 


 

 

89. First States Properties No. 12, LLC (PA)

90. First States Properties No. 15, LLC (PA)

91. First States Properties No. 19, LLC (PA)

92. First States Properties No. 34, LLC (PA)

93. First States Properties No. 35, LLC (PA)

94. First States Properties No. 37, LLC (PA)

95. First States Properties No. 41, LLC (PA)

96. First States Properties No. 43, LLC (PA)

97. First States Properties No. 49, LLC (PA)

98. First States Properties No. 51, LLC (PA)

99. First States Properties No. 52, LLC (PA)

100. First States Properties No. 56, LLC (PA)

101. First States Properties No. 59, LLC (PA)

102. First States Properties No. 62, LLC (PA)

103. First States Properties No. 67, LLC (PA)

104. First States Properties No. 71, LLC (PA)

105. First States Properties No. 73, LLC (PA)

106. First States Properties No. 75, LLC (PA)

107. First States Properties No. 9, LLC (PA)

108. First States Realty Corp., LLC

 

 

 


 

 

Schedule B

 

(See Attached)

 

 

 


 

 

Schedule B

Senior Mezzanine Borrower

 

1. American Financial TRS, Inc. (DE)

2. First States Investors 104 Holdings, L.P. (DE)

3. First States Investors 240 Holdings, LLC (DE)

4. First States Investors 241 Holdings, LLC (DE)

5. First States Investors 3300 Holdings, LLC (DE)

6. First States Investors 4000A, L.P. (DE)

7. First States Investors 4100, LLC (DE)

8. First States Investors 4600 Holdings, LLC (DE)

9. First States Investors 5000, LLC (DE)

10. First States Investors 6000, LLC

11. First States Investors 801, L.P. (PA)

12. First States Investors 923 Holdings, L.P.

13. First States Investors 927 Holdings, LLC

14. First States Investors Asset Group A, L.P.

15. First States Investors GS Pool A Holdings, LLC (DE)

16. First States Investors GS Pool B Holdings, LLC (DE)

17. First States Investors, L.P. (DE)

18. First States Partners III, L.P. (DE)

19. First States Partners, L.P. (DE)

20. First States Properties, L.P. (PA)

21.   First States Wilmington JV, L.P

22. GKK Stars Acquisition LLC

23. First States Group L.P.

24. American Financial Realty Trust (MD)

25. First States Group, LLC (DE)

 

 

 


 

 

Schedule C

 

(See Attached)

 

 

 


 

 

Schedule C

Due Diligence Documents/Target Delivery Dates

 

ITEM

NO.

 

DESCRIPTION OF ITEMS TO BE DELIVERED

 

COMMENTS

 

DELIVERY

DATE

1

 

Access to specified data drive with copies of contracts entered into by GKK Stars Acquisition and all of its affiliates (hereinafter collectively referred to as “ GKK ”) with unaffiliated entities (including, without limitation, service contracts, leasing agreements, property management agreements, brokerage agreements, construction contracts, architects agreements, engineering contracts, purchase options, purchase agreements, agreements with advisors including, without limitation, accountants and attorneys), to the extent in GKK’s possession.

 

 

 

Upon finalization of  Agreement

 

 

 

 

 

 

 

2

 

Access to specified data drive with copies of contracts entered into by GKK with affiliated entities (including, without limitation, service contracts, leasing agreements, property management agreements, brokerage agreements, construction contracts, architect’s agreements, engineering contracts, purchase options, purchase agreements, agreements with professional advisors including, without limitation, accountants and attorneys) to the extent in GKK’s possession.

 

 

 

Upon finalization of  Agreement

 

 

 

 

 

 

 

3

 

Employees – Not applicable

 

As previously indicated, GKK does not have any employees.

 

N/A

 

 

 

 

 

 

 

4

 

Rent roll for leases/licenses (and similar agreements) (including ground leases) under which GKK is the landlord/licensor, together with copies of all such leases/licenses

 

 

 

Upon finalization of  Agreement

 

 

 

 

 

 

 

5

 

Schedule of all leases/licenses (and similar agreements) (including ground leases) under which GKK is the tenant/licensee, together with copies of all such leases/licenses.

 

 

 

Upon finalization of  Agreement

 

 

 

 

 

 

 

6

  

Schedule of all litigation (filed only) (including, without limitation, insurance litigation, tenant bankruptcy proceedings) initiated by, or brought against, GKK.

  

 

  

Upon finalization of  Agreement

 

 

 


 

 

7

 

Schedule of all insurance carried (and the amounts of such insurance, as well as the premiums payable under such policies and the date through which such policies are payable) by, or on behalf of, GKK, together with copies of all of such insurance policies.  The schedule shall also include the contact information for the insurance agents through which such insurance was placed.

 

GKK has introduced KBS to insurance provider

 

Completed

 

 

 

 

 

 

 

8

 

Schedule of all tax returns (state and federal) filed in the last 3 years for GKK.  Copies of the returns and back -up information sufficient to confirm that all taxes have been paid are available at GKK’s offices for inspection. Summary information posted to shared drive

 

 

 

Upon finalization of Agreement

 

 

 

 

 

 

 

9

 

Schedule of all secured and unsecured debt for borrowed money of GKK, which shall include outstanding balances, maturity dates, interest rates, and amortization schedules.  Access to specified data drive with copies of all documents evidencing, and/or securing such debt

 

 

 

Upon finalization of Agreement

 

 

 

 

 

 

 

10

 

Schedule of all accounts held by and/or maintained for the benefit of, GKK, which schedule shall include the account numbers for such accounts, the approximate balances of such accounts as of the most current date reasonably practicable, the bank and the property or properties with respect to whose cash flow is deposited into such bank.

 

 

 

After execution

 

 

 

 

 

 

 

11

 

Schedule of tenant security deposits (and letters of credit) relating to leases/licenses affecting the properties owned or leased by GKK, which schedule shall be broken down by property and tenant and include an aggregate balance by property pool.

 

 

 

Upon finalization of Agreement

 

 

 

 

 

 

 

12

 

Operating reports for the current year and the last 3 years reflecting income and expenses, prepared on a property portfolio basis, together with balance sheets and operating statements on a property portfolio basis for the year ending 12/31/2010, and for the quarter ending 3/31/2011.

 

 

 

After execution

 

 

 

 

 

 

 

13

 

Access to specified data drive with copies of all GKK limited liability company agreements and/or limited partnership agreements and/or all corporate related formation documents for GKK entities.

 

 

 

After execution

 

 

 

 

 

 

 

14

  

Schedule of real estate taxes by property, which schedule will include building number, building name, taxing authority, parcel number and the party responsible for payment (GKK, tenant or mortgage servicer).  GKK shall provide access to the Core Logic site to KBS's designated representative for the purposes of reviewing copies of all current and previous 3 years of tax bills where applicable.

  

 

  

Upon finalization of Agreement

 

 

 


 

 

15

 

Schedule of any construction projects in progress costing in excess of $20,000, listed by property portfolio.

 

 

 

Upon finalization of Agreement

 

 

 

 

 

 

 

16

 

Intentionally Omitted

 

 

 

 

 

 

 

 

 

 

 

17

 

GKK will provide transfer tax analysis prepared in early 2008 in connection with Merger of Gramercy and AFRT

 

 

 

Completed

 

 

 

 

 

 

 

18

 

Current organizational chart reflecting all subsidiaries of GKK Stars Acquisition LLC and the real properties owned by such subsidiaries.

 

 

 

Completed

 

 

 

 

 

 

 

19

 

Access to specified data drive with copies of environmental reports, engineering reports, structural reports, lease files, plans and specifications and architectural drawings, and certificates of occupancy relating to the properties, to the extent in GKK’s possession.

 

 

 

After execution

 

 

 

 

 

 

 

20

 

Access to leasing reports such as rent rolls and active lease inventory reports as well as accounting trial balances and operating reports on a property by property and roll-up basis, to the extent in GKK’s possession.   Back up information as necessary available at GKK's office for inspection.  

 

 

 

After execution

 

 

 

 

 

 

 

21

 

Access to GKK’s SOX/Internal Audit risk assessment.  GKK to allow DLA internal audit team to coordinate review of results documentation with KBS' designated representative. 

 

 

 

After execution

 

 

 

 

 

 

 

22

  

Access to all necessary books and records required to allow KBS to undertake a 3.14 audit. GKK E&Y audit team to coordinate information with KBS’s E&Y audit team.

  

 

  

On going

 

 

 


 

 

Schedule D

 

Intentionally Omitted

 

 

 


 

 

Schedule E

 

(See Attached)

 

 

 


 

 

Schedule E

Management Services Agreement Terms

 

Unless expressly defined herein, all capitalized terms used herein shall have the meaning ascribed to it in the Settlement Agreement to which this Schedule E is attached.  This Schedule E shall govern the parties obligations with respect to asset management services to be performed by GKK Stars (“Manager”) for the properties the equity interests in which are to be acquired by Acquisition Co. or its Subsidiaries pursuant to the Settlement Agreement (the “ Properties ”).

 

1.             Management Term .  Through December 31, 2013, subject to the right of either party to terminate this Schedule E (with no requirement of Cause [as defined below] or an Acquisition Co. Default [as defined below]) at any time on 90 days prior written notice (the “ 90 Day Notice ’) delivered by the party terminating this Schedule E to the other party; provided that, except  in the event of an Acquisition Co. Default, Manager may not deliver a 90 Day Notice prior to October 1 st , 2011.  In addition, this Schedule E shall automatically terminate on June 30, 2012, in the event of a “ Failure to Agree Termination ” (as defined in Paragraph 10 below).  Notwithstanding the foregoing, the management term and this Schedule E may be terminated at any time by: (i) Acquisition Co. on five (5) business days’ prior written notice for Cause; or (ii) by Manager on five (5) business days’ prior written notice in the event of an Acquisition Co. Default. Furthermore, notwithstanding the foregoing, if Manager delivers a 90 Day Notice to Acquisition Co. which would result in the termination of this Schedule E effective as of any date prior to March 31, 2012, Acquisition Co. shall have the right to provide written notice to Manager, delivered no later than five (5) business days following delivery by Manager of the 90 Day Notice, extending until March 31, 2012 the termination date provided for by Manager in the 90 Day Notice (the period between the effective date of termination set forth by Manager in the 90 Day Notice and March 31, 2012 is referred to herein as the “Extension Period”). Notwithstanding anything contained herein or the Settlement Agreement to the contrary, in the event of a Material Breach (as defined below) by Manager under this Schedule E which occurs during the Extension Period, if applicable, the sole remedy of Acquisition Co. (and KBS) as a result of such Material Breach is: (i)  a termination of this Schedule E and the forfeiture by Manager of the Threshold Value Profits Participation (as defined below), such forfeiture being liquidated damages and not as a penalty (it being acknowledged by the parties that actual damages are incapable of being ascertained) and, (ii) the right of Acquisition Co. to seek actual damages against Manager (but no other person or entity) in the event of fraud, misappropriation of funds or embezzlement against Acquisition Co. committed by Manager in its corporate capacity (as distinguished from the acts of any employees of Manager which are taken without complicity of any of the executive officers of Manager) which is not cured within thirty (30) days after notice thereof from Acquisition Co. if and to the extent such actual damages exceed $3,500,000 and any such damages claim must be net of the Threshold Value Profits Participation (valued at $3,500,000) forfeited as described above.

 

 

 


 

 

2.             Management Fee .  Subject to Paragraphs 8 and 9 below, Acquisition Co. hereby agrees to pay to Manager a management fee equal to $10,000,000 per year, plus reimbursement of all property related expenses (together, the “ Management Fee ”), payable monthly in arrears plus the amount, if any, of the Excess Profits Participation and Threshold Value Profits Participation, each as described below; provided, however, that during the calendar year 2011, the Management Fee shall be prorated for this partial year by taking the remaining days in the calendar year 2011 from and after September 1, 2011, dividing by 365 and multiplying such amount by $10,000,000.  Manager represents to Acquisition Co. that it has not made the permitted distribution for September 2011 as permitted by the Loan Agreement and will not do so.  For the avoidance of doubt, it is the agreement of Acquisition Co. and Manager that Manager is to receive the Management Fee for the entire month of September under this Schedule E in lieu of receiving a comparable payment pursuant to the permitted distribution provisions of the Loan Agreement.

 

3.             Management Information .  During the term of this Schedule E ,  Manager shall be obligated to provide Acquisition Co. and/or KBS and its affiliated Subsidiaries (“ KBS ”) with such information, reports and other information relating to the operation and management of the Properties as may be reasonably requested by Acquisition Co. and/or KBS from time to time, as more particularly set forth on Schedule 1 hereto.  For purposes of Schedule 1 attached hereto, the term KBS (as used in Schedule 1) shall include Acquisition Co.  Additionally, Manager acknowledges and agrees that it will comply with all financial reporting requirements set forth in all mortgage loans which affect the Properties, including, without limitation, any financial reporting requirements set forth in the loan agreement referenced in that certain First Amendment to Substitute Loan A dated September 1, 2011, executed by, among other parties, Gramercy Investment Trust and the borrowers referred to therein (and specifically including those financial reporting requirements set forth under Section 3.13(c) of the loan agreement referred to in the First Amendment.

 

4.             Excess Profits Participation .  Acquisition Co. hereby agrees to pay to Manager a contractual (with no equity interest in Acquisition Co. whatsoever) profits participation (“ Excess Profits Participation ”) in an amount equal to 12.5% of the amount, if any, by which Acquisition Co. Portfolio Equity Value exceeds the sum of: (a) Four Hundred Sixty-Eight Million Five Hundred Thousand Dollars ($468,500,000), plus (b) all new capital invested into Acquisition Co. by KBS, its affiliates and/or joint venture partner(s) (i.e., excluding cash in the Acquisition Co. system as of the Effective Date) (such sum of (a) and (b) being referred to herein as the “ Target Equity Value ”).

 

Acquisition Co. Default ” means a failure by Company to pay the monthly Management Fee to Manager under this Schedule E , which continues for five (5) business days following written notice of such default.

 

Acquisition Co. Portfolio Equity Value ” means the net sales value of all Properties sold from and after the Effective Date through and including the Measurement Date plus the fair value of Acquisition Co. remaining assets as of the Measurement Date less the aggregate mortgage debt encumbering such assets on the Effective Date (less any amount of principal amortized on or prior to the Measurement Date).

 

Cause ” means any of the following: (i) Material Breach; or (ii) a Material Control Failure.

 

 

2


 

 

Initial Measurement Date Extension Conditions ” means: (i) delivery of notice of election to extend provided no later than December 30, 2013; and (ii) payment to Manager of a Five Hundred Thousand Dollar ($500,000) extension fee paid no later than December 30, 2013.

 

Material Breach ” means fraud, misappropriation of funds, or embezzlement against Acquisition Co. or other willful and material violation of this Agreement by Manager in its corporate capacity (as distinguished from the acts of any employees of Manager which are taken without the complicity of any of the executive officers of Manager) which is not cured within thirty (30) days after notice thereof from Acquisition Co.

 

Material Control Failure ” means any “material control weakness” identified by the Manager's independent external auditors or by the Acquisition Co.'s internal auditors; provided, however, a Material Control Failure shall not occur if Manager has cured such breach within a period of fifteen (15) days after notice of such fact or in the case of a breach that cannot be cured, has diligently modified its internal controls in order to prevent re-occurrence.

 

Measurement Date ” means the earlier to occur of: (a) December 31, 2013 (or December 31, 2014 upon satisfaction of the Initial Measurement Date Extension Conditions, or December 31, 2015 upon satisfaction of the Second Measurement Date Extension Conditions), and (b) the date on which Acquisition Co., directly or indirectly, sells, conveys or otherwise transfers (together with all prior transfers) at least ninety percent (90%) of the Properties (by value), including a sale of Acquisition Co. or any parent or subsidiary by sale of equity securities, merger, reorganization or otherwise.

 

Second Measurement Date Extension Conditions ” means (i) delivery of notice of election to extend provided no later than December 30, 2014; and (ii) payment to Manager of a One Million Dollar ($1,000,000) extension fee paid no later than December 30, 2014; and (iii) the prior proper extension of the Measurement Date to December 31, 2014.

 

A.             Reporting .  Manager will require, and Acquisition Co. shall provide: (i) an annual balance sheet of Acquisition Co. certified by an officer thereof and an audited balance sheet of Acquisition Co. for the year in which the Measurement Date occurs; and (ii) if the Management Services Agreement (or this Schedule E) has been terminated prior to such date, any other reports and information reasonably requested by Manager and reasonably available to Acquisition Co. to verify or determine the amounts included in the calculation of the Excess Profits Participation and the Threshold Value Profits Participation; (iii) notice of all new contributions of equity into Acquisition Co.; and (iv) notice of all affiliate transactions along with detail confirming those transaction are on third party terms.

 

B.             Determination of Excess Profits Participation .  The amount, if any, of the Excess Profits Participation payable to Manager shall be determined and deemed earned on the Measurement Date (whether or not this Schedule E has been terminated prior to such date) unless prior to such date this Schedule E was terminated: (a) by Acquisition Co. for Cause, (b) by Manager (for any reason other than as a result of a Acquisition Co. Default) on or prior to December 31, 2012, or (c) in the event of a Failure to Agree Termination.  Except as described in the immediately preceding sentence, the obligation to pay the Excess Profits Participation shall survive any termination of this Schedule E .

 

 

3


 

 

C.             Payment .  Payment of the Excess Profits Participation shall be due and payable in cash (except as otherwise set forth in the following sentence), within ten (10) business days following the calculation of Acquisition Co. Portfolio Equity Value which must be completed no later than sixty (60) days following the Measurement Date.

 

If Acquisition Co. sells Properties, or is itself sold, for non-cash consideration, Manager shall be paid a pro-rata portion of the Excess Profits Participation in the form of such non-cash consideration.

 

Notwithstanding the foregoing, if, prior to the Measurement Date, Acquisition Co. makes capital distributions in excess of Target Equity Value, Manager shall receive, out of any such excess distributions (i.e. distributions in excess of Target Equity Value), advance payments on the Excess Profits Participation, but only to the extent this Schedule E has not theretofore been terminated: (a) by Acquisition Co. for Cause, (b) by Manager (for any reason other than as a result of a Acquisition Co. Default) on or prior to December 31, 2012, or (c) in the event of a Failure to Agree Termination.  Except as described in the immediately preceding sentence, the obligation to pay the Excess Profits Participation shall survive any termination of this Schedule E .

 

D.             Survival .   The obligation to pay the Excess Profits Participation shall survive any sale or transfer by Acquisition Co., its parent or any subsidiary, of all or any portion of the direct or indirect equity interests in Acquisition Co. or any of the direct or indirect equity interests in the entities which own the Properties.

 

5.             Threshold Value Profits Participation .  Acquisition Co. shall also pay to Manager a contractual (with no equity interest in Acquisition Co. whatsoever) profits participation (“ Threshold Value Profits Participation ”) in an amount equal to the greater of: (a) $3,500,000; and (b) ten percent (10%) of the amount, if any, by which Acquisition Co. Portfolio Equity Value exceeds the sum of (i) Three Hundred Seventy-Five Million Dollars ($375,000,000), plus (ii) all new capital invested into Acquisition Co. by KBS, its affiliates and/or joint venture partner(s) (i.e., excluding cash in the Acquisition Co. system as of the Effective Date) (such sum of (a) and (b) being referred to herein as the “ Target Threshold Value ”).  Upon the earlier to occur of: (a) October 1, 2013 (deferred to October 1, 2014 upon satisfaction of the Initial Measurement Date Extension Conditions, or to October 1, 2015 upon satisfaction of the Second Measurement Date Extension Conditions); and (b) the date on which Acquisition Co., directly or indirectly, sells, conveys or otherwise transfers (together with all prior transfers) sixty percent (60%) of the Properties (by value), including a sale of Acquisition Co. or any parent or subsidiary by sale of equity securities, merger, reorganization or otherwise, Acquisition Co. must (from and after such date) retain unrestricted cash on hand in an amount at least equal to $3,500,000.

 

Acquisition Co. Portfolio Equity Value ” (is defined in Paragraph 4 above).

 

Initial Measurement Date Extension Conditions ” (is defined in Paragraph 4 above).

 

 

4


 

 

Measurement Date ” (is defined in Paragraph 4 above).

 

Second Measurement Date Extension Conditions ” (is defined in Paragraph 4 above).

 

A.             Reporting .  Same as described in Paragraph 4 above..

 

B.             Determination of Threshold Value Profits Participation .   The amount, if any, of the Threshold Value Profits Participation payable to Manager shall be determined and deemed earned on the Measurement Date, (whether or not this Schedule E has been terminated prior to such date) unless prior to such date this Schedule E was terminated; (a) by Acquisition Co. for Cause, or (b) by Manager (for any reason other than as a result of a Acquisition Co. Default) on or prior to December 31, 2011.  Except as described in the immediately preceding sentence and except as set forth in the last sentence of Section 1 of this Schedule E to the extent otherwise applicable, the obligation to pay the Threshold Value Profits Participation shall survive any termination of this Schedule E .

 

C.             Payment .   Payment of the Threshold Value Profits Participation shall be due and payable in cash (except as otherwise set forth in the following sentence), within ten (10) business days following the calculation of Acquisition Co. Portfolio Equity Value which must be completed no later than sixty (60) days following the Measurement Date.

 

If Acquisition Co. sells Properties, or is itself sold, for non-cash consideration, Manager shall be paid a pro-rata portion of the Threshold Value Profits Participation in the form of such non-cash consideration.

 

Notwithstanding the foregoing, if, prior to the Measurement Date, Acquisition Co. makes capital distributions in excess of Target Threshold Value, Manager shall receive, out of any such excess distributions (i.e. distributions in excess of Target Threshold Value), advance payments on the Threshold Value Profits Participation, but only to the extent this Schedule E has not theretofore been terminated: (a) by Acquisition Co. for Cause, or (b) by Manager (for any reason other than as a result of an Acquisition Co. Default) on or prior to December 31, 2011.  Except as described in the immediately preceding sentence and except as set forth in the last sentence of Section 1 of this Schedule E to the extent otherwise applicable, the obligation to pay the Threshold Value Profits Participation shall survive any termination of this Schedule E .

 

D.             Survival .  The obligation to pay the Threshold Value Profits Participation shall survive any sale or transfer by Acquisition Co., its parent or any subsidiary, of all or any portion of the direct or indirect equity interests in Acquisition Co. or any of the direct or indirect equity interests in the entities which own the Properties.

 

 

5


 

 

6.             Management Duties to be provided by Manager .  Manager will perform (or cause to be performed) standard asset management services for Acquisition Co. similar to those provided by comparable institutional landlord asset managers in those markets in which the Properties are located.  However, until the Management Services Agreement is executed by Manager and Acquisition Co. the following expenditures require the approval of Acquisition Co.: (i) all expenditures which would require notice from Manager to Acquisition Co. pursuant to Section 4(i)(C) of Schedule 1 attached hereto; (ii) any expenditures, excluding Emergency Expenditures (as defined below), not reflected in the 2011 Budget in an amount equal to or greater than Twenty-Five Thousand Dollars ($25,000); and (iii) any capital expenditure in an amount equal to or greater than One Hundred Thousand Dollars ($100,000).  “Emergency Expenditures” means expenses which are necessary to avoid imminent damage to persons or property or are otherwise necessary to make critical required repairs.  In the event of a termination of this Schedule E , Manager shall: (i) provide a list of employees who perform services relating to the Properties after Manager has determined which of such employees shall be terminated; and (ii) pay over to Acquisition Co. all money collected and held for the account of Acquisition Co.; and (iii) furnish such information and take all such actions as Acquisition Co. shall reasonably require, in order to effectuate an orderly and systematic ending of the duties and activities of Manager under this Schedule E .

 

7.             No Interest in KBS or Properties .   Each of KBS and Manager agree that (i) the Excess Profits Participation and the Threshold Value Profits Participation are contractual rights being granted by Acquisition Co. to Manager, and (ii) Manager shall have no equity interest whatsoever in the Properties, KBS, Acquisition Co. or any subsidiaries of KBS or Acquisition Co.

 

8.             Breach Event .  Upon the occurrence of any Breach Event, KBS shall have all rights and remedies provided to KBS under the Settlement Agreement.  Manager acknowledges and agrees that it has reviewed the provisions of Section 9.2 of the Settlement Agreement and Manager understands that Acquisition Co. would not enter into this transaction with Manager without Manager expressly agreeing to the provisions of this Paragraph 8 and being bound by the provisions of Section 9.2 of the Settlement Agreement.

 

9.             Termination .  Without limiting the obligation of Acquisition Co. to pay to Manager the amounts set forth in Paragraphs 4 and 5 above (to the extent provided for in Paragraphs 4 and 5 above), from and after the effective date of a termination of this Schedule E , Manager shall not be entitled to the Management Fee for further services under this Schedule E (including, without limitation, the payment of the Management Fee) but shall be paid all compensation accruing to the date of termination and shall be reimbursed for properly incurred expenses.

 

10.           Management Services Agreement .  KBS and Manager hereby agree to promptly commence and diligently seek to complete negotiations by no later than March 31, 2012, in good faith, of a full and complete management services agreement.  Notwithstanding the foregoing, both KBS, Acquisition Co. and Manager acknowledge and agree that there are outstanding business issues relating to this Schedule E and the asset management services agreement that need to be mutually resolved between KBS, Acquisition Co. and Manager.  If the parties do not come to a mutually acceptable agreement regarding these matters and execute an asset management services agreement prior to March 31, 2012, then this Schedule E shall automatically terminate on June 30, 2012, without liability or a penalty of any kind (the “Failure to Agree Termination”) and, for avoidance of doubt, with no loss or forfeiture of the Threshold Value Participation (except to the extent set forth in the last sentence of Section 1 of this Schedule E to the extent otherwise applicable).

 

 

6


 

 

Schedule 1

 

Financial and Accounting Services to be Provided

 

1.            Accounting Related Services :

 

(i)           administration and maintenance of general ledger in JDEdwards or other approved accounting system using a chart of accounts approved by the KBS.  KBS’s books are to be separate from Manager’s, and/or any other subsidiary’s books and new JDEdwards entries with balances beginning at zero are to be set up for KBS’s books on the date equity interests in Properties are transferred pursuant to the Settlement Agreement.   All leasing data relating to the Properties shall be transferred or copied over to new entities, but receivable balances shall reflect accounts receivable owed to KBS as of the date the equity interests in the Properties are transferred pursuant to the Settlement Agreement.  Straightlining of rent shall begin as of the date equity interests in such Properties are transferred pursuant to the Settlement Agreement as opposed to the start date of the lease (unless the lease start date is after the date equity interests in such Properties are added to the Management Services Agreement).  Manager will be responsible for the recordation of FAS141 based on numbers provided by KBS in both the general ledger and FAS depreciation system;

 

(ii)          Administration and maintenance of general ledger on both a cash and US GAAP basis; provided, however, the cash ledger requirement may be difficult to achieve by Manager, and KBS and Manager agree to work in good faith to reach a mutually acceptable solution to this issue.  US GAAP shall include, among other things, straightlining of rent, FAS 141 setup and maintenance, and proper treatment of lease incentives;

 

(iii)         Monthly cash cutoff, other then at the end of the year, shall be on the 20th of each month.  Accruals are to be through the end of each month.  KBS and Manager acknowledge and agree that Manager does not currently perform an early cash cutoff, but Manager shall nevertheless adopt such a requirement as soon as reasonably possible;

 

(iv)         administration and maintenance of a general ledger trial balance, balance sheet, income statement and certain other reports Manager customarily prepares in the normal course of business and periodic distribution of such reports to KBS.   Schedule 2 contains a detailed listing of reporting requirements required of Manager under the Management Services Agreement;

 

(v)          preparation of period-end reconciliations and associated period-end journal entries for all significant balance sheet accounts;

 

(vi)         accounting oversight including review of monthly trial balances and supporting documentation;

 

(vii)        ensure that all expense invoices are submitted for “proper approval” before processing them for payment;

 

(viii)       administration of accounts payable (including check generation and wire transfers);

 

 

7


 

 

(ix)         administration of timely payment and recordation of any required principal and interest payments under any underlying debt of the Properties;

 

(x)          administration of recurring cash transfers between bank accounts;

 

(xi)         determine monthly accruals for any costs incurred and unpaid, regardless of whether actual invoice has been received,  including fixed expenses, and non-recurring expenses such as repair and maintenance and capital expenditures.  Accruals will be reviewed with the budget and changes will be recommended as necessary and reflected in accruals.  Notwithstanding the foregoing, Manager does not currently perform monthly accruals for capital expenditures and subject to the approval of KBS, instead, Manager will implement a quarterly accrual process for construction in process, beginning with the fourth quarter of 2011.   All other accruals will be prepared monthly;

 

(xii)        administration of accounts receivable and collections including daily posting of cash receipts;

 

(xiii)       maintenance of lease database including preparation of lease abstracts for new and modified lease agreements and preparation of related schedules such as lease inventory reports and rent rolls;

 

(xiv)       recording and maintenance of depreciation and amortization on all the following basis- GAAP, tax, and E&P.  Depreciation is to be available as requested in a excel downloaded format;

 

(xv)        monitor the KBS’s compliance with internal policy guidelines as provided by KBS, including those applicable under Sarbanes-Oxley and including loan covenants with respect to applicable financing arrangements;

 

(xvi)       act as liaison between KBS’s and its independent accountants to provide backup and answer questions with respect to information presented on the general ledger, trial balance, balance sheet, income statement and certain other reports Manager’s customarily prepares in the normal course of business; and

 

(xvii)      maintenance of all accounting records supporting the financial statements (consistent with KBS’s record retention program) in reasonable fashion and separate and discrete from Manager’s accounting records.

 

2.            Audit :

 

Manager shall:

 

(i)           provide KBS with reasonable access to internal documents, reports, risk assessments, process narratives and other information pertaining to and/or used by Manager in connection with ensuring compliance with Section 404 of the Sarbanes-Oxley Act;

 

 

8


 

 

(ii)          allow KBS’s internal audit to perform property audits, walkthroughs, process documentation, control testing and any other procedure needed to comply with Section 404 of the Sarbanes-Oxley Act on an annual basis; and

 

(iii)         make available to KBS, its internal audit team and its accountants all necessary books, records and other information needed in order to permit KBS to complete ongoing audits.

 

3.            Reporting Requirements :

 

(i)           Manager shall prepare, or cause to be prepared, with respect to the Properties, reports and information on the Properties’ operations and performance as reasonably requested by KBS.  Monthly and quarterly books shall be finalized and available for review by KBS as soon as reasonably practicable and in any event shall be available for review by KBS within seven (7) business days following the 20th of each month other then December and within seven (7) business days following December 31 st .  Although Manager does not currently perform an early reporting cutoff, Manager agrees to adopt an early reporting cutoff as soon as reasonably possible, but in no event later than January 20th, 2012;

 

(ii)          On a monthly basis, Manager shall datafeed or upload the general ledger information from JDEdwards into a format acceptable and uploadable by the MRI accounting system once the books are finalized in accordance with the timelines to be set forth in the Management Services Agreement.   In addition, Manager shall make any additional datafeeds or uploads, as needed, to incorporate any changes made to the books following KBS’s review and approval of such information; and

 

(iii)         Manager shall prepare, or cause to be prepared, all materials and data necessary to complete an annual audit of KBS’s books of account by a nationally recognized independent accounting firm of good reputation, initially Ernst & Young.

 

4.            Budgets and Business Plans :

 

(i)           Manager shall prepare and submit to KBS a proposed operating and capital budget (the “ Budget ”) for the operation, repair and maintenance of each of the Properties for the remainder of the calendar year in which the effective date of the Management Services Agreement occurs, no later than [thirty (30) days] after such effective date. The Budget for 2011 (the “ 2011 Budget ”) has been submitted to, and has been approved by, KBS.  Thereafter, on or before the date specified each year by KBS (but not later than October 31), Manager shall prepare and submit to KBS an updated draft Budget for the remainder of the current calendar year and a preliminary Budget for the next calendar year followed by a final Budget for the next calendar year, incorporating any changes requested KBS.  Such Budgets shall:

 

(A)           Be prepared on a cash and/or accrual basis, as directed by KBS;

 

(B)           Show a month by month projection of income, expenses, capital expenditures and reserves.  Manager agrees to use its diligent efforts to ensure that the actual cost of operating each of the Properties shall not exceed the approved Budget.  After written approval of each such Budget by KBS (each such approved Budget being an “ Approved Budget ”), Manager shall implement the Approved Budget and use its best efforts to ensure that the actual cost of operating each of the Properties shall not exceed the Approved Budget; and

 

 

9


 

 

(C)           Manager shall promptly notify KBS of any changes of more than five percent (5%) to material line items in the Approved Budget.

 

(ii)           Manager shall provide KBS each year with a draft of a business plan for each of the Properties, on or before the date specified by KBS (but no later than October 31), containing such information KBS may reasonably request.

 

 

10


 

 

Schedule F

 

(See Attached)

 

 

 


 

 

SCHEDULE F

Contracts to be Assumed or Terminated by Acquisition Co.

 

Borrower has provided access through a shared drive with Acquisition Co. to all FSMC Contracts under the folder identified as “GKK Contracts Unaffiliated”

 

 

 


 

 

Schedule G

 

(See Attached)

 

 

 


 

 

Schedule G

 

 

 

Debt Fair Value [1]

 

 

# of

Properties

 

 

KBS Senior Mezz

Loan Allocation

 

 

 

 

 

 

 

 

 

 

 

Group #1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goldman Mortgage

 

 

240,523,025

 

 

 

194

 

 

 

59,605,661

 

Millburn

 

 

850,486

 

 

 

1

 

 

 

1,213,165

 

Berkeley Heights

 

 

509,718

 

 

 

1

 

 

 

717,560

 

Kenilworth

 

 

417,747

 

 

 

1

 

 

 

582,102

 

FSI

 

 

64,171,815

 

 

 

70

 

 

 

13,196,514

 

Unencumbered

 

 

N/A

 

 

 

50

 

 

 

11,676,794

 

Subtotal

 

 

306,472,791

 

 

 

317

 

 

 

86,991,796

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Group #2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BBD1

 

 

256,398,549

 

 

 

116

 

 

 

173,080,985

 

PB Capital

 

 

204,070,879

 

 

 

41

 

 

 

36,817,660

 

Subtotal

 

 

460,469,428

 

 

 

157

 

 

 

209,898,644

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Group #3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Citizens JV

 

 

62,172,000

 

 

 

52

 

 

 

-

 

Harborside Financial Center

 

 

-

 

 

 

1

 

 

 

(12,933,602

)

Ridgewood Ave.

 

 

-

 

 

 

1

 

 

 

1,513,258

 

Feasterville

 

 

823,496

 

 

 

1

 

 

 

1,516,930

 

BBD2

 

 

195,809,731

 

 

 

138

 

 

 

25,473,605

 

101 Independence

 

 

66,372,015

 

 

 

1

 

 

 

7,609,942

 

Pitney Bowes - Bank of America

 

 

43,167,431

 

 

 

70

 

 

 

16,385,063

 

One Citizens Plaza

 

 

43,469,346

 

 

 

1

 

 

 

(629,668

)

801 Market Street

 

 

39,544,945

 

 

 

1

 

 

 

18,040,277

 

Beaver Valley

 

 

38,267,268

 

 

 

1

 

 

 

35,453,301

 

FSI 6000D

 

 

30,344,196

 

 

 

16

 

 

 

6,482,330

 

FSI 6000B

 

 

28,736,944

 

 

 

16

 

 

 

5,414,096

 

FSI 6000A

 

 

28,241,003

 

 

 

15

 

 

 

6,255,179

 

FSI 6000C

 

 

24,722,204

 

 

 

15

 

 

 

6,183,634

 

Pitney Bowes - Wachovia A

 

 

19,652,019

 

 

 

23

 

 

 

10,275,500

 

Sterling Bank

 

 

19,339,501

 

 

 

14

 

 

 

4,426,080

 

Jenkins Court

 

 

8,383,508

 

 

 

1

 

 

 

(121,438

)

Wachovia 9

 

 

12,716,654

 

 

 

8

 

 

 

6,789,427

 

RBC Centura

 

 

8,440,261

 

 

 

7

 

 

 

10,142,933

 

BOA Windsor

 

 

6,354,768

 

 

 

5

 

 

 

7,485,091

 

Wachovia 8

 

 

3,266,295

 

 

 

6

 

 

 

5,738,224

 

Subtotal

 

 

679,823,584

 

 

 

393

 

 

 

161,500,160

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total - Keep Portfolios

 

 

1,446,765,803

 

 

 

867

 

 

 

458,390,600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total - Give Back Portfolios

 

 

-

 

 

 

73

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total - All Portfolios

 

 

1,446,765,803

 

 

 

940

 

 

 

458,390,600

 

 

 

 

1,384,593,803

 

 

 

 

 

 

 

 

 

 

Footnote:

[1] Debt balances are net of defeasance securities totaling $85.0 million.

 

 

 


 

 

Schedule H

 

Intentionally Omitted

 

 

 


 

 

Schedule I

 

(See Attached)

 

 

 


 

 

Schedule I

Entity Interests

 

NOTE:  Transferred Interests marked with an asterisk (*) indicates Transfers occurring on the Effective Date.

Transferor

 

Transferee

 

Transferred Interest

 

TI State

 

TI

Type

 

Loan Pool

 

Notes

First States Investors 104 Holdings, L.P.

 

KBS Acquisition Sub-Owner 10, LLC

 

First States Investors 104 GP, LLC

 

Delaware

 

LLC

 

101 IND

 

 

 

 

 

 

First States Investors 104, L.P.

 

Delaware

 

LP

 

101 IND

 

 

N/A

 

 

 

First States Investors 104 Holdings GP LLC

 

Delaware

 

LLC

 

101 IND

 

Retained - GP of LP T'or

First States Investors 6000, LLC

 

KBS Acquisition Sub-Owner 15, LLC

 

First States Investors 6000A GP, LLC

 

Delaware

 

LLC

 

6000A

 

 

 

 

 

 

First States Investors 6000A, L.P.

 

Delaware

 

LP

 

6000A

 

 

First States Investors 6000, LLC

 

KBS Acquisition Sub-Owner 16, LLC

 

First States Investors 6000B GP, LLC

 

Delaware

 

LLC

 

6000B

 

 

 

 

 

 

First States Investors 6000B, L.P.

 

Delaware

 

LP

 

6000B

 

 

First States Investors 6000, LLC

 

KBS Acquisition Sub-Owner 17, LLC

 

First States Investors 6000C GP, LLC

 

Delaware

 

LLC

 

6000C

 

 

 

 

 

 

First States Investors 6000C, L.P.

 

Delaware

 

LP

 

6000C

 

 

First States Investors 6000, LLC

 

KBS Acquisition Sub-Owner 18, LLC

 

First States Investors 6000D , L.P.

 

Delaware

 

LP

 

6000D

 

 

 

 

 

 

First States Investors 6000D GP, LLC

 

Delaware

 

LLC

 

6000D

 

 

First States Investors 801, L.P.

 

KBS Acquisition Sub-Owner 13, LLC

 

801 Market Street Holdings, L.P.

 

Pennsylvania

 

LP

 

801 MARKET

 

 

 

 

 

 

First States Investors 801 GP II, LLC

 

Delaware

 

LLC

 

801 MARKET

 

 

N/A

 

 

 

First States Investors 801 GP, LLC

 

Pennsylvania

 

LLC

 

801 MARKET

 

Retained - GP of LP T'or

American Financial TRS, Inc.

 

KBS Acquisition Sub-Owner 13, LLC

 

First States Investors 801 GP III, LLC

 

Delaware

 

LLC

 

801 MARKET

 

 

 

 

 

 

801 Market Street Associates, L.P.

 

Pennsylvania

 

LP

 

801 MARKET

 

 

 

 

 

 

First States Investors 801 Associates LP, LLC

 

Delaware

 

LLC

 

801 MARKET

 

 

First States Group, L.P.

 

KBS Acquisition Sub-Owner 2, LLC

 

AFR Defeasance Pool 1, LLC

 

Delaware

 

LLC

 

BBD1

 

BBD1 Defeasance

N/A

 

 

 

AFR Defeasance Pool IA, LLC

 

Delaware

 

LLC

 

BBD1

 

Sub of Transferee

First States Investors 5000, LLC

 

KBS Acquisition Sub-Owner 2, LLC

 

First States Investors 5000A, LLC

 

Delaware

 

LLC

 

BBD1

 

 

Gramercy Realty Holdings LLC

 

KBS Acquisition Sub-Owner 2, LLC

 

GKK Independence Square Lot, LLC

 

Delaware

 

LLC

 

BBD1

 

Assoc. with #5108

 

 

 


 

 

First States Group, L.P.

 

KBS Acquisition Sub-Owner 9, LLC

 

First States Investors 5200 Holdings, LLC

 

Delaware

 

LLC

 

BBD2

 

 

N/A

 

 

 

First States Investors 5200, LLC

 

Delaware

 

LLC

 

BBD2

 

Sub of Transferee

First States Wilmington JV, L.P.

 

KBS Acquisition Sub-Owner 14, LLC

 

First States Wilmington, L.P.

 

Delaware

 

LP

 

BEAVER

 

 

 

 

 

 

First States Wilmington, LLC

 

Delaware

 

LLC

 

BEAVER

 

 

N/A

 

 

 

First States Wilmington JV, LLC

 

Delaware

 

LLC

 

BEAVER

 

Retained - GP of LP T'or

First States Properties, L.P.

 

KBS Acquisition Sub-Owner 8, LLC

 

First States Properties No. 14, LLC *

 

Pennsylvania

 

LLC

 

BERKHEIGHTS

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 27, LLC

 

First States Investors CRE Holdings LLC

 

Delaware

 

LLC

 

CITIZENS JV

 

 

N/A

 

 

 

CRE Master JV Holdings LLC

 

Delaware

 

LLC

 

CITIZENS JV

 

Sub of Transferee

N/A

 

 

 

CRE JV Five Branch Holdings Mezz, LLC

 

Delaware

 

LLC

 

CITIZENS JV

 

Sub of Transferee

N/A

 

 

 

CRE JV Five Branch Holdings, LLC

 

Delaware

 

LLC

 

CITIZENS JV

 

Sub of Transferee

First States Properties, L.P.

 

KBS Acquisition Sub-Owner 26, LLC

 

First States Properties No. 27, LLC *

 

Pennsylvania

 

LLC

 

FEASTERVILLE

 

 

First States Group, L.P.

 

KBS Acquisition Sub-Owner 4, LLC

 

First States Investors DB I, L.P. *

 

Delaware

 

LP

 

FSI

 

Effective Date Xfer

 

 

 

 

First States Investors DB I GP, LLC.*

 

Delaware

 

LLC

 

FSI

 

Effective Date Xfer

American Financial TRS, Inc.

 

KBS Acquisition Sub-Owner 4, LLC

 

First States Investors DB I B GP, LLC*

 

Delaware

 

LLC

 

FSI

 

Effective Date Xfer

 

 

 

 

First States Investors DB I B, L.P.*

 

Delaware

 

LP

 

FSI

 

Effective Date Xfer

N/A

 

 

 

First States Investors 4200 Holdings, LLC*

 

Delaware

 

LLC

 

FSI

 

Effective Date Xfer; Sub of Transferee

N/A

 

 

 

First States Investors 4200, LLC*

 

Delaware

 

LLC

 

FSI

 

Effective Date Xfer; Sub of Transferee

N/A

 

 

 

First States Investors DB I SP, L.P.*

 

Delaware

 

LP

 

FSI

 

Effective Date Xfer; Sub of Transferee

N/A

 

 

 

First States Investors DB I SP GP, LLC*

 

Delaware

 

LLC

 

FSI

 

Effective Date Xfer; Sub of Transferee

N/A

 

 

 

First States Investors DB I TRS, L.P.*

 

Delaware

 

LP

 

FSI

 

Effective Date Xfer; Sub of Transferee

N/A

 

 

 

First States Investors DB I TRS GP, LLC*

 

Delaware

 

LLC

 

FSI

 

Effective Date Xfer; Sub of Transferee

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 105, LLC*

 

Pennsylvania

 

LLC

 

GSM

 

Effective Date Xfer

American Financial TRS, Inc.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 107, LLC*

 

Arkansas

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 


 

 

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 117, LLC*

 

Florida

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 118, LLC*

 

Florida

 

LLC

 

GSM

 

Effective Date Xfer

American Financial TRS, Inc.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 147, LLC*

 

Iowa

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 154, LLC*

 

New Jersey

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 157, LLC*

 

New Jersey

 

LLC

 

GSM

 

Effective Date Xfer

American Financial TRS, Inc.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 2017, LLC*

 

Florida

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 2100 GP, LLC*

 

North Carolina

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 2100, L.P.*

 

North Carolina

 

LP

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 2102 GP, LLC*

 

North Carolina

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 2102 L.P.*

 

North Carolina

 

LP

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 2103 GP, LLC*

 

North Carolina

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 2103, L.P.*

 

North Carolina

 

LP

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 2104 GP, LLC*

 

North Carolina

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 2104, L.P.*

 

North Carolina

 

LP

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 2105 GP, LLC*

 

North Carolina

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 2105, L.P.*

 

North Carolina

 

LP

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 2106 GP, LLC*

 

North Carolina

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 2106, L.P.*

 

North Carolina

 

LP

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 2107 GP, LLC*

 

North Carolina

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 2107, L.P.*

 

North Carolina

 

LP

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 2108 GP, LLC*

 

North Carolina

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 2108, L.P.*

 

North Carolina

 

LP

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 2110, LLC*

 

Virginia

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 


 

 

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 2208, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 230 GP, LLC*

 

North Carolina

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 230, L.P.*

 

North Carolina

 

LP

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 2550A, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3004, Limited Partnership*

 

Florida

 

LP

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 3004, LLC*

 

Florida

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3014, LLC*

 

Georgia

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3022 GP, LLC*

 

North Carolina

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 3022, L.P.*

 

North Carolina

 

LP

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3024 GP, LLC*

 

North Carolina

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 3024, L.P.*

 

North Carolina

 

LP

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3028 GP, LLC*

 

North Carolina

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 3028, L.P.*

 

North Carolina

 

LP

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3033 GP, LLC*

 

North Carolina

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 3033, L.P.*

 

North Carolina

 

LP

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3034, LLC*

 

South Carolina

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3035, LLC*

 

South Carolina

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3043, LLC*

 

South Carolina

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3061, LLC*

 

New Jersey

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3067, LLC*

 

Virginia

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3076, LLC*

 

Georgia

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3077, LLC*

 

Georgia

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3081 GP, LLC*

 

North Carolina

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 3081, L.P.*

 

North Carolina

 

LP

 

GSM

 

Effective Date Xfer

 

 

 


 

 

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3086, LLC*

 

Pennsylvania

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3087, LLC*

 

Virginia

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3089, LLC*

 

Virginia

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3090, LLC*

 

Florida

 

LLC

 

GSM

 

Effective Date Xfer

American Financial TRS, Inc.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3091, LLC*

 

Georgia

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3093, LLC*

 

Virginia

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3098, LLC*

 

Virginia

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3099, LLC*

 

Virginia

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3103, LLC*

 

Georgia

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3108, LLC*

 

New Jersey

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3114, LLC*

 

Tennessee

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3151, LLC*

 

Florida

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3179 GP, LLC

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 3179, Limited Partnership*

 

Delaware

 

LP

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3187 GP, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 3187, Limited Partnership*

 

Delaware

 

LP

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3195 GP, LLC*

 

Texas

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 3195, L.P.*

 

Texas

 

LP

 

GSM

 

Effective Date Xfer

First States Investors 3300 Holdings, LLC

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3300, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

American Financial TRS, Inc.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3601, LLC*

 

Florida

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3632, LLC*

 

Florida

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3642, LLC*

 

New Jersey

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 


 

 

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 3647 GP, LLC*

 

Pennsylvania

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 3647, L.P.*

 

Pennsylvania

 

LP

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 40, LLC*

 

Missouri

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 4000C, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

American Financial TRS, Inc.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 4043, LLC*

 

Georgia

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 4044, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 4048, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 4055, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 4062, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 4067, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 4085, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

First States Investors 4100, LLC

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 4100B GP, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 4100B, L.P.*

 

Delaware

 

LP

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 4150, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 4413, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 4499, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 4500, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

First States Investors 5000, LLC

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 5000B, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 77, Limited Partnership*

 

Florida

 

LP

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 77, LLC*

 

Florida

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 922, LLC*

 

Illinois

 

LLC

 

GSM

 

Effective Date Xfer

First States Investors 923 Holdings, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 923 GP, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 923, L.P.*

 

Delaware

 

LP

 

GSM

 

Effective Date Xfer

N/A

 

 

 

First States Investors 923 Holdings GP, LLC

 

Delaware

 

LLC

 

GSM

 

Retained - GP of LP T'or

 

 

 


 

 

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 926 GP, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors 926, L.P.*

 

Delaware

 

LP

 

GSM

 

Effective Date Xfer

First States Investors 927 Holdings, LLC

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors 927, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

First States Group, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors Branch One GP, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors Branch One, L.P.*

 

Delaware

 

LP

 

GSM

 

Effective Date Xfer

First States Investors GS Pool A Holdings, LLC

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors GS Pool A GP, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors GS Pool A, L.P.*

 

Delaware

 

LP

 

GSM

 

Effective Date Xfer

First States Investors GS Pool B Holdings, LLC

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors GS Pool B GP, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors GS Pool B, L.P.*

 

Delaware

 

LP

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors GS Pool C GP, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Investors GS Pool C, L.P.*

 

Delaware

 

LP

 

GSM

 

Effective Date Xfer

First States Investors, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Investors Realty, LLC*

 

Delaware

 

LLC

 

GSM

 

Effective Date Xfer

N/A

 

 

 

First States Investors, LLC

 

Delaware

 

LLC

 

GSM

 

Retained - GP of LP T'or

First States Partners, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Partners No. 201, L.P.*

 

Pennsylvania

 

LP

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Partners No. 201, LLC*

 

Pennsylvania

 

LLC

 

GSM

 

Effective Date Xfer

First States Partners, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Partners No. 203, LLC*

 

New Jersey

 

LLC

 

GSM

 

Effective Date Xfer

First States Partners, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Partners No. 213, LLC*

 

New Jersey

 

LLC

 

GSM

 

Effective Date Xfer

First States Partners, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Partners No. 216, L.P.*

 

Pennsylvania

 

LP

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Partners No. 216, LLC*

 

Pennsylvania

 

LLC

 

GSM

 

Effective Date Xfer

First States Partners, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Partners No. 236, L.P.*

 

Pennsylvania

 

LP

 

GSM

 

Effective Date Xfer

 

 

 

 

First States Partners No. 236, LLC*

 

Pennsylvania

 

LLC

 

GSM

 

Effective Date Xfer

First States Properties, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Properties No. 12, LLC*

 

Pennsylvania

 

LLC

 

GSM

 

Effective Date Xfer; Originally WACH 8

 

 

 


 

 

First States Properties, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Properties No. 15, LLC*

 

Pennsylvania

 

LLC

 

GSM

 

Effective Date Xfer

First States Properties, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Properties No. 19, LLC*

 

Pennsylvania

 

LLC

 

GSM

 

Effective Date Xfer

First States Properties, L.P.

 

KBS Acquisition Sub-Owner 1, LLC

 

First States Properties No. 34, LLC*

 

Pennsylvania

 

LLC