Exhibit 10.57

 

PROMISSORY NOTE

   LOGO [g69730img001.jpg]

 

$8,400,000.00

   Loan No. 104026    Los Angeles, California    January 29, 2007

1. PROMISE TO PAY. For value received, the undersigned, KBS REIT ACQUISITION IX,
LLC, a Delaware limited liability company (“Borrower”), promises to pay to the
order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Lender”), 2030 Main Street,
Suite 800, Irvine, California 92614, or at such other place as may be designated
in writing by Lender, the principal sum of EIGHT MILLION FOUR HUNDRED THOUSAND
AND NO/100 DOLLARS ($8,400,000.00) (“Loan”), with interest thereon as specified
herein. All sums owing hereunder are payable in lawful money of the United
States of America, in immediately available funds, without offset, deduction or
counterclaim of any kind.

2. SECURED BY PLEDGES. This Note is secured by, among other things, that
(i) that certain Pledge and Security Agreement (Membership Interests in Owner),
of even date herewith, executed by Borrower for the benefit of Lender, and
(ii) that certain Pledge and Security Agreement (Membership Interests in
Borrower), of even date herewith, executed by KBS Limited Partnership, a
Delaware limited partnership (“Guarantor”), for the benefit of Lender (together,
as the same may from time to time be amended, restated or otherwise modified,
the “Pledge Agreements”).

3. DEFINITIONS. For the purposes of this Note, the following terms shall have
the following meanings:

“Actual/360 Basis” means on the basis of a 360-day year and charged on the basis
of actual days elapsed for any whole or partial month in which interest is being
calculated.

“Applicable LIBO Rate” means the rate of interest equal to the sum of: (a) the
Spread plus (b) the LIBO Rate, which rate is divided by one (1.00) minus the
Reserve Percentage:

 

Applicable LIBO Rate = Spread

  +   

        LIBO Rate

             (1 - Reserve Percentage)    

“Business Day” means any day other than a Saturday, Sunday, legal holiday or
other day on which commercial banks in California are authorized or required by
law to close. All references in this Note to a “day” or a “date” shall be to a
calendar day unless specifically referenced as a Business Day.

“Cash Management Agreement” shall have the meaning stated in the Loan Agreement.

“Code” means the Internal Revenue Code of 1986, as amended to date and as
further amended from time to time, or any successor statutes thereto, together
with applicable regulations issued pursuant thereto in temporary or final form.

“Collateral” shall have the meaning stated in the Loan Agreement.

“Default” shall have the meaning stated in the Loan Agreement.

“Default Rate” means a floating per annum rate of interest equal to four percent
(4%) in excess of the Variable Rate.

“Disbursement Date” means the date upon which the Loan proceeds are funded by
Lender into escrow in connection with the closing of the Loan.

“Due Date” means the first day of each calendar month during the period
commencing on the First Due Date and the first day of each calendar month
thereafter.

“Effective Date” means the date Lender authorizes the Loan proceeds to be
released to, or for the benefit of, Borrower.

“First Due Date” means February 1, 2007.

 

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“Intercreditor Agreement” means that certain Intercreditor Agreement dated of
even date herewith between Lender and Senior Lender.

“Interest Only Payment Amount” means a monthly payment of accrued interest based
on the Note Rate and the outstanding principal balance due on each Due Date
commencing on the First Interest Only Due Date and continuing through and
including the Maturity Date.

“LIBO Rate” means the rate of interest quoted by Lender as the London Inter-Bank
Offered Rate for deposits in U.S. Dollars at approximately 9:00 a.m. California
time, on the Disbursement Date, or a Monthly Rate Adjustment Date, as
applicable, for purposes of calculating effective rates of interest for loans or
obligations making reference thereto for an amount approximately equal to the
outstanding principal balance of the Loan and for a period of time equal to one
(1) month.

“Loan Agreement” means that certain Mezzanine Loan Agreement, of even date
herewith, between Borrower and Lender.

“Loan Documents” means the documents identified as such in Exhibit C to the Loan
Agreement.

“Maturity Date” means January 31, 2008.

“Monthly Rate Adjustment Date” means the date one (1) month following the
initial Disbursement Date and the same day of the month each month thereafter
following, provided, however, that if such day does not fall on a Business Day,
then the Monthly Rate Adjustment Date shall be the next following Business Day.

“Note Rate” shall have the meaning set forth in Section 4.5 hereof.

“Prime Rate” means a base rate of interest which Lender establishes from time to
time and which serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto. Any change in the Note
Rate, as hereinafter defined, due to a change in the Prime Rate shall become
effective on the day each such change is announced within Lender.

“Property” shall have the meaning set forth in the Loan Agreement.

“REMIC” means a “real estate mortgage investment conduit” within the meaning of
Section 860D of the Code.

“Reserve Percentage” means at any time the percentage announced within Lender as
the reserve percentage under Regulation D for loans and obligations making
reference to a LIBO Rate. The Reserve Percentage shall be based on Regulation D
or other regulations from time to time in effect concerning reserves for
Eurocurrency Liabilities as defined in Regulation D from related institutions as
though Lender were in a net borrowing position, as promulgated by the Board of
Governors of the Federal Reserve System, or its successor.

“Senior Borrower” means KBS Crescent Green, LLC, a Delaware limited liability
company.

“Senior Lender” means Wells Fargo Bank, National Association.

“Senior Loan” means that certain mortgage loan in the original amount of
$32,400,000.00 from Senior Lender to Senior Borrower of even date herewith
secured by the Property.

“Spread” means (a) during the period from the Disbursement Date until the date
immediately preceding the date nine (9) months from the Disbursement Date,
1.50%, and (b) during the period from the date nine (9) months from the
Disbursement Date through the Maturity Date, 2.50%.

“Variable Rate” means a floating per annum rate of interest equal to the Prime
Rate.

4. INTEREST; PAYMENTS.

 

4.1 Interest Accrual. Interest on the outstanding principal balance of this Note
shall accrue from the Disbursement Date at the Note Rate calculated on an
Actual/360 Basis.

 

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4.2 Payments. Monthly payments, each in the Interest Only Payment Amount, shall
commence on the First Due Date and continue on each Due Date thereafter.
Borrower acknowledges that the Interest Only Payment Amount is determined on an
Actual /360 Basis. During a Default, and on each Due Date thereafter so long as
a Default is continuing, all deposits and payments shall be made and applied in
accordance with Section 4 of the Cash Management Agreement. All interest shall
be paid in arrears. Borrower’s obligation to pay accrued interest and interest
accrued thereon shall constitute additional indebtedness evidenced by this Note.
Any accrued interest and interest accrued thereon which remains unpaid on the
Maturity Date shall be due and payable in full on the Maturity Date. On the
Maturity Date, all unpaid principal and accrued but unpaid interest shall be due
and owing in full. Except as otherwise specifically provided in this Note or the
other Loan Documents, all payments and deposits due under this Note or the other
Loan Documents shall be made to Lender not later than 12:00 noon, Pacific time,
on the day on which such payment or deposit is due. Any funds received by Lender
after such time shall, for all purposes, be deemed to have been received on the
next succeeding Business Day.

 

4.3 [Internationally Omitted]

 

4.4 Application of Payments. In the absence of a specific determination by
Lender to the contrary and subject to Borrower’s rights to receive Permitted
REIT Distributions, all payments paid by Borrower to Lender in connection with
the obligations of Borrower under this Note and under the other Loan Documents
shall be applied in the following order of priority: (a) to amounts, other than
principal and interest, due to Lender pursuant to this Note or the other Loan
Documents; (b) to accrued but unpaid interest on this Note; and (c) to the
unpaid principal balance of this Note. Subject to the foregoing, Borrower
irrevocably waives the right to direct the application of any payments at any
time received by Lender from or on behalf of Borrower, and Borrower agrees that
Lender shall have the continuing exclusive right to apply any such payments to
the then due and owing obligations of Borrower in such order of priority as
Lender may deem advisable.

 

4.5 Note Rate. The “Note Rate” upon which interest shall be calculated for this
Note shall be one or more of the following:

 

  a. Provided no uncured Default or breach exists under the Loan Agreement or
any of the Loan Documents described therein (this Note is one of the Loan
Documents), the Applicable LIBO Rate based upon the one (1) month LIBO Rate
quoted by Lender on the Disbursement Date until a Monthly Rate Adjustment Date
and thereafter on the most recent Monthly Rate Adjustment Date; provided,
however, if any of the transactions necessary for the calculation of interest at
such Applicable LIBO Rate should be or become prohibited or unavailable to
Lender, or, if in Lender’s good faith judgment, it is not possible or practical
for Lender to establish the aforementioned Applicable LIBO Rate, the Note Rate
shall be the Variable Rate.

 

  b. During such time as an uncured Default or breach exists under the Loan
Agreement or any of the Loan Documents; or from and after the date on which all
sums owing under this Note become due and payable by acceleration or otherwise;
or from and after the Maturity Date, then the interest rate applicable to the
then entire outstanding principal balance of this Note shall be the Default
Rate.

5. LATE CHARGE. If all or any portion of any payment (including, without
limitation, any payment of any interest, Interest Only Payment Amount, impound
or other deposit) required pursuant to the Cash Management Agreement or
hereunder (other than the payment due on the Maturity Date) is not paid or
deposited on or before the fifth day following the day on which the payment is
due, Borrower shall pay a late or collection charge, as liquidated damages,
equal to 5% of the amount of such unpaid payment. If all or any portion of the
payment due on the Maturity Date is paid after the Maturity Date and on a date
which is not the first day of a calendar month, Borrower shall pay a late or
collection charge, as liquidated damages, equal to the interest which would have
accrued on such amount during the period commencing on the date payment of such
amount is actually made and ending on the last day of the calendar month in
which payment of such amount is actually made. Borrower acknowledges that Lender
will incur additional expenses as a result of any late payments or deposits
hereunder, which expenses would be impracticable to quantify, and that
Borrower’s payments under this Section 5 are a reasonable estimate of such
expenses.

6. MAXIMUM RATE PERMITTED BY LAW. Neither this Note nor any of the other Loan
Documents shall require the payment or permit the collection of any interest or
any late payment charge in excess of the maximum rate permitted by law. If any
such excess interest or late payment charge is provided for under this Note or
any of the other Loan Documents or if this Note or any of the other Loan
Documents shall be adjudicated to provide for such excess, neither Borrower nor
Borrower’s

 

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successors or assigns shall be obligated to pay such excess, and the right to
demand the payment of any such excess shall be and hereby is waived, and this
provision shall control any other provision of this Note or any of the other
Loan Documents. If Lender shall collect amounts which are deemed to constitute
interest and which would increase the effective interest rate to a rate in
excess of the maximum rate permitted by law, all such amounts deemed to
constitute interest in excess of the maximum legal rate shall, upon such
determination, at the option of Lender, be returned to Borrower or credited
against the outstanding principal balance of this Note.

7. ACCELERATION. If (a) Borrower shall fail to pay when due any sums payable
under this Note following the expiration of notice, grace or cure periods, if
any; (b) any other Default shall occur; or (c) any other event or condition
shall occur which, under the terms of the Loan Agreement or any other Loan
Document, gives rise to a right of acceleration of sums owing under this Note
following the expiration of notice, grace or cure periods, if any, then Lender,
at its sole option, shall have the right to declare all sums owing under this
Note immediately due and payable; provided, however, that if the Loan Agreement
or any other Loan Document provides for the automatic acceleration of payment of
sums owing under this Note, all sums owing under this Note shall be
automatically due and payable in accordance with the terms of the Loan Agreement
or such other Loan Document.

8. BORROWER’S LIABILITY. The Loan shall be full recourse to Borrower (but not to
any of Borrower’s constituent members or partners, except to the extent set
forth in separate guarantees and indemnities).

9. INTENTIONALLY OMITTED.

10. MISCELLANEOUS.

 

10.1 Joint and Several Liability. If this Note is executed by more than one
person or entity as Borrower, the obligations of each such person or entity
shall be joint and several. No person or entity shall be a mere accommodation
maker, but each shall be primarily and directly liable hereunder.

 

10.2 Waiver of Presentment. Except as otherwise provided in any other Loan
Document, Borrower hereby waives presentment, demand, notice of dishonor, notice
of default or delinquency, notice of intent to accelerate, notice of
acceleration, notice of nonpayment, notice of costs, expenses or losses and
interest thereon, and notice of interest on interest and late charges.

 

10.3 Delay In Enforcement. No previous waiver or failure or delay by Lender in
acting with respect to the terms of this Note or the Loan Agreement shall
constitute a waiver of any breach, default or failure of condition under this
Note, the Loan Agreement or the obligations secured thereby. A waiver of any
term of this Note, the Loan Agreement or of any of the obligations secured
thereby must be made in writing signed by Lender, shall be limited to the
express terms of such waiver, and shall not constitute a waiver of any
subsequent obligation of Borrower. The acceptance at any time by Lender of any
past-due amount shall not be deemed to be a waiver of the right to require
prompt payment when due of any other amounts then or thereafter due and payable.

 

10.4 Time of the Essence. Time is of the essence with respect to every provision
hereof.

 

10.5 Governing Law. In all respects, including, without limiting the generality
of the foregoing, matters of construction, validity, enforceability and
performance, this Note, the Loan Agreement and the other Loan Documents and the
obligations arising hereunder and thereunder shall be governed by, and construed
in accordance with, the laws of the State of New York applicable to contracts
made and performed in such state and any applicable law of the United States of
America. Except as provided in the immediately preceding sentence, Borrower
hereby unconditionally and irrevocably waives, to the fullest extent permitted
by law, any claim to assert that the law of any jurisdiction other than New York
governs the Loan Agreement, this Note and the other Loan Documents.

 

10.6 Consent to Jurisdiction. Borrower irrevocably submits to the jurisdiction
of: (a) any state or federal court sitting in the State of New York or
California over any suit, action, or proceeding, brought by Borrower against
Lender, arising out of or relating to this Note or the Loan evidenced hereby;
and (b) any state or federal court sitting in the state in which Borrower’s
principal place of business is located over any suit, action or proceeding,
brought by Lender against Borrower, arising out of or relating to this Note or
the Loan evidenced hereby. Borrower irrevocably waives, to the fullest extent
permitted by law, any objection that Borrower may now or hereafter have to the
laying of venue of any such suit, action, or proceeding brought in any such
court and any claim that any such suit, action, or proceeding brought in any
such court has been brought in an inconvenient forum.

 

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10.7 Counterparts. This Note may be executed in any number of counterparts, each
of which when executed and delivered shall be deemed an original and all of
which taken together shall be deemed to be one and the same Note.

 

10.8 Heirs, Successors and Assigns. All of the terms, covenants, conditions and
indemnities contained in this Note and the other Loan Documents shall be binding
upon the heirs, successors and assigns of Borrower and shall inure to the
benefit of the successors and assigns of Lender. The foregoing sentence shall
not be construed to permit Borrower to assign the Loan except as otherwise
permitted in this Note or the other Loan Documents.

 

10.9 Severability. If any term of this Note, or the application thereof to any
person or circumstances, shall, to any extent, be invalid or unenforceable, the
remainder of this Note, or the application of such term to persons or
circumstances other than those as to which it is invalid or unenforceable, shall
not be affected thereby, and each term of this Note shall be valid and
enforceable to the fullest extent permitted by law.

 

10.10 Intentionally Omitted.

 

10.11 Notices. All notices and other communications that are required or
permitted to be given to a party under this Note shall be in writing and shall
be sent to such party, either by personal delivery, by overnight delivery
service, by certified first class mail, return receipt requested, or by
facsimile transmission to the address or facsimile number below (provided that
facsimile transmission is confirmed by delivery by one other permitted method
within one day thereafter). All such notices and communications shall be
effective upon receipt of such delivery or facsimile transmission. The addresses
and facsimile numbers of the parties shall be: (with copies as set forth in
Section 15 below)

 

Borrower:    Lender:

KBS REIT Acquisition IX, LLC

c/o KBS Capital Advisors

620 Newport Center Drive, Suite 1300

Newport Beach, CA 92660

Attention: Stacie Yamane

FAX No.: (949) 417-6520

  

Wells Fargo Bank, N.A.

2030 Main Street, Suite 800

Irvine, CA 92614

Loan No. 104026

Attention: Spenser Robinson

FAX No.: (949) 251-4498

   With a copy to:   

Wells Fargo Bank, N.A.

2030 Main Street, Suite 800

Irvine, CA 92614

Loan No. 104026 Attention: Sherrie Courtney-Sanders

FAX No.: (949) 833-1182

11. PREPAYMENT. The Loan may be voluntarily prepaid, in whole or in part, at any
time.

12. CONSTITUENT MEMBERS AND PARTNERS. This Promissory Note shall be subject to
the limitations on liability set forth in Section 8.23 of the Loan Agreement.

13. WAIVER OF JURY TRIAL. TO THE EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE
LAW, LENDER AND BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS NOTE OR ANY OTHER
LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN), OR ACTIONS OF LENDER OR BORROWER. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR LENDER TO MAKE THE LOAN TO BORROWER.

14. ADDITIONAL NOTICES. Copies of any notice to the Borrower shall also be sent
to the following persons in the same manner as set forth in Section 10.11 above:

Peter Potrykus

KBS Capital Advisors LLC

1133 21st Street NW, Suite 400

Washington, DC 20036

FAX No.: (202) 822-1340

 

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L. Bruce Fischer

Morgan, Lewis & Bochius LLP

5 Park Plaza, Suite 1750

Irvine, CA 92614

FAX No.: (949) 399-7001.

Copies of any notice to Lender shall also be sent to the following persons in
the same manner as set forth in Section 10.11 above:

Sidley Austin LLP

555 W. Fifth Street, 40th Floor

Los Angles, California 90013

Attn: Bruce W. Fraser, Esq.

FAX No.: (213) 896-6600

[signature on following page]

 

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BORROWER:  

KBS REIT ACQUISITION IX, LLC,

a Delaware limited liability company

  By:  

KBS Limited Partnership,

a Delaware limited partnership,

its sole member

    By:  

KBS Real Estate Investment Trust, Inc.,

a Maryland corporation,

its general partner

      By:  

/s/ Charles J. Schreiber, Jr.

        Charles J. Schreiber, Jr.         Chief Executive Officer